The U.S. Department of Housing and Urban Development (HUD) and the Biden-Harris Administration announced new steps intended to bolster the nation’s housing supply and improve housing affordability. The White House released a guidebook, developed in partnership with HUD and other federal agencies, that will help communities and housing providers identify federal resources to finance the adaptive reuse of commercial properties as residential and mixed-use developments. The White House also released an associated fact sheet, available here.
As part of this announcement, HUD released an updated notice on how its Community Development Block Grant (CDBG) funding can be used to boost housing supply – including acquisition, rehabilitation, and commercial-to-residential conversions. This notice is the latest update on how to use CDBG resources to support the development of affordable housing. States and localities can also access up to five times their annual CDBG allocation in low-cost loan guarantees to fund projects such as the conversion of properties to housing or mixed-use development.
In addition, HUD recently released an issue of Evidence Matters focused on office-to-residential conversions, which provides a research overview of the issues motivating the surge in interest in adaptive reuse of office buildings and highlights local examples of conversion projects.
Bob Broeksmit, CMB, President and CEO of the Mortgage Bankers Association (MBA), released the following statement on the Biden administration’s guidance on adaptive reuse of commercial property as housing:
“MBA shares the Biden administration’s commitment to increasing housing supply and appreciates its willingness to engage with us and the industry on ways to incentivize lenders and borrowers to rehab, repurpose, and convert more obsolete commercial properties into affordable rental housing and other usable spaces.
“Housing providers are grappling with higher interest rates and rising labor and construction costs at a time when our nation’s housing supply remains inadequate. The initiatives announced today should help facilitate more commercial-to-residential projects. We encourage state and local governments to ensure zoning laws, tax credits, and subsidies are aligned to take full advantage of these programs.
“We will work with the Administration, members of the House and Senate that have crafted related legislation, and other engaged stakeholders to fashion cost-effective ways for multifamily borrowers, developers, and lenders to increase the nation’s rental housing