Although COVID-19 has decreased and returned to many employees to their cubicles, continuous remote work and housing scarcity have stimulated more office buildings to become apartment buildings. Almost 71,000 residences throughout the country are in process, more than triple the number three years ago, according to a Rentcafe report.
The report defined the projects in the pipe as those that have been approved, remain under construction or are in the planning phases. The researchers analyzed data from Rentcafe’s sister company, Yardi, which examines commercial properties throughout the country, to reach their conclusions.
New York, the largest office market in the country and one of the most competitive residential rental markets, says most conversions, 8.310. High profile projects include the transformation of the former Pfizer headquarters in Midtown, which will deliver 1,600 apartments.
Washington DC, arrived in second place with 6,533 conversions, a number that could increase with the search for the government efficiency department to cut office leases.
Despite the boom, creating residences outside offices is a challenge, and not all buildings are adequate. The properties of the early twentieth century are the best, thanks to narrow plant plans, which makes it easier to design rooms with windows.
But to encourage conversions, municipalities provide financial incentives and simplified processes. San Francisco has updated the construction codes and is simplifying the approval process. Washington and New York provide fiscal reductions or exemptions, which in New York can be up to 90 percent for buildings with at least 25 percent of affordable apartments, according to the report.
Developers must also overcome high interest rates and the effect that tariffs could have on material prices, and the campaign to deport illegal immigrants, which could reduce the workforce in which the construction industry has trusted for a long time.
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