Oct. 27 (UPI) — The Biden administration announced new federal funding incentives aimed at converting vacant commercial properties across the country into affordable housing.
The government initiative comes in response to a surge in derelict office space throughout the United States, which reached its highest level in three decades while consumers faced rising living costs amid a deepening shortage of residential space, the White House said in a statement.
The program will seek to revitalize downtown districts and stimulate economic activity on rural main streets across America as commercial realtors and local economies have struggled to repurpose business spaces that mostly went empty during the global pandemic.
The move comes as housing costs have surged by 7% or more since August 2022, which was outpacing the current inflation rate of 3.7%.
Meanwhile, the housing market faced growing inaccessibility as the interest rate on a 30-year fixed-rate mortgage reached a 20-year high of 7.5%, blocking many prospective homebuyers and forcing millions to contend with the rigmarole of a costly rental market.
The administration released guidance on how to get financing to support the residential conversions in the form of grants, loans and private investments, while the White House urged state, local, tribal, and territorial entities to identify all possible public opportunities to support the effort.
The actions would serve to lower housing costs, boost housing supply, promote fair housing, and reduce energy costs, while providing tax incentives to builders through the Inflation Reduction Act.
The administration was also seeking to address the nation’s climate needs through the program by launching clean-energy projects near the modified living districts.
As part of the program, the Department of Transportation will provide $35 billion in low-interest loans to finance public transit within walking distance of the housing developments, which would serve to cut nearly 30% of greenhouse gas emissions from homes, the White House said.
The DOT is also streamlining the process for transit agencies to repurpose properties for affordable housing near public transit by allowing them to transfer properties to developers at no cost.
The Department of Housing and Urban Development is preparing to hand out a block of grants worth $10 billion to boost acquisition, rehabilitation, and conversion of commercial properties to residential uses and mixed-use developments.
The U.S. General Services Administration is also expanding its Good Neighbor Program to encourage the sale of surplus federal properties that can be redeveloped for residential purposes.