Menu
Close
About Us Issues News Resources MembersSearch and Filter
Menu
Close
About Us Issues News Resources Members
Certain commercial real estate assets like office buildings are under significant stress due to pandemic-related issues, including employers’ greater reliance on remote work arrangements. These economic pressures have led asset owners to explore the conversion of offices to other uses, including affordable housing. The Roundtable is encouraging lawmakers to help revitalize cities, boost local tax bases, and address market challenges by enacting incentives that encourage adaptive uses of older, under-utilized buildings.
The Roundtable on Dec. 12, 2022 urged the Biden administration to support “legislation to facilitate the increased conversion of underutilized office and other commercial real estate to much-needed housing.” (RER letter to President Biden, Dec. 12 and GlobeSt, Aug. 8)
The Roundtable is also engaged with congressional policymakers on legislation that encourages the adaptive use of older buildings.
A property conversions working group created by The Roundtable’s Tax Policy Advisory Committee (TPAC) will continue to respond to legislative developments affecting potential CRE property conversions.
Rep. Jimmy Gomez (D-CA) and nine other House Democrats recently urged federal banking regulators to incentivize conversions of commercial real estate to other uses. The letter noted, “It is essential that all arms of the federal government take prudent steps to limit the impact of a CRE market contraction and innovate to encourage reuse of vacant commercial space as a potential source of housing.”
On Oct. 12, 2022, a Roundtable-led coalition of 16 national real estate organizations urged Rep. Gomez and Sen. Debbie Stabenow (D-MI) to consider certain enhancements and expansions to their Revitalizing Downtowns Act’s 20% tax credit for qualified property conversion expenditures. (Real Estate Coalition letter)
The Roundtable-supported bill included a property conversion measure modeled on the historic rehabilitation tax credit and could be used for office buildings that are at least 25 years old at the time of conversion. The industry’s recommendations included expanding the category of properties eligible for the credit to various types of commercial buildings such as shopping centers and hotels. (GlobeSt and Roundtable Weekly, Oct. 2022)
In July, the Biden administration announced a new initiative that will establish a multi-agency working group to “develop and advance federal funding opportunities” for commercial-to-residential conversions that would help increase the supply of energy-efficient affordable housing. (Reuters and HousingWire, July 27 | Roundtable Weekly, July 28)
Separately, an analysis from researchers at New York University and Columbia University explores the potential for renewable energy investment tax credits in the Inflation Reduction Act to help subsidize CRE adaptive use and green conversions. (National Bureau of Economic Research)
