2024 Spring Issue of Urban Land - 37

conventional construction loans, such as
C-PACE [Commercial Property Assessed
Clean Energy] financing, which can typically
fund a significant amount of the hard and
soft costs associated with a conversion.
How could the public sector best
incentivize and ease the process of
converting offices to housing?
ROBBINS: The public sector could consider
providing tax incentives for purchasing
vacant convertible office buildings, subsidies,
and density bonuses, as well as low-cost
or no-cost financing during the conversion,
lease up, and stabilization process. Streamlining
zoning and permitting through an
expedited, " fast-track " approval process specifically
for conversions would also incentivize
projects.
SILWAL: Office buildings that are not well
suited for conversion could actively promote
their ground floor spaces to contribute to
the community life of the neighborhood
and create a draw for potential residents.
Public agencies can take on master leases
for downtown ground-floor spaces in identified
pockets to promote events and activities
that bring a diverse user group to the
neighborhood. They can help curate tenants
[including] artists, nonprofits, and local,
small businesses that bring foot traffic but
aren't necessarily revenue-drivers, taking that
burden off commercial developers. That's the
most impactful move the public sector can
make. More foot traffic will make the floors
above more attractive to tenants. Programs
like San Francisco's Vacant to Vibrant facilitate
partnerships between the city and building
owners to allow pop-ups as interim uses.
LUDGIN: For tax-exempt institutional investors,
tax incentives may not help much, so
incentives [such as] reduced property taxes
could attract a broader range of investors.
Speeding up entitlements is always valuable.
Cities can also enhance an area's appeal for
conversions. For example, ULI's LaSalle Street
Technical Assistance Panel recommended
ideas like introducing new public spaces via
weekend street closures in the financial district
to add open space and activity.
LILJEGREN: The best way for the public
sector to incentivize office-to-housing conversions
would be to provide direct financial
assistance to developers, such as a certain
dollar amount per square foot. However, few
cities have the resources to do [so]. Other
helpful incentives include tax incentives or
removing city fees to lower project costs.
Policy reform is also key to streamlining the
process. The city of Los Angeles is poised
to implement two significant adaptive use
policies. The first would make adaptive reuse
projects by-right, avoiding a lengthy entitlement
process. This [policy] saves developers
significant time and money. The second
would allow for the addition of square footage
to the existing building while keeping
the project by-right, as long as it meets the
building code.
What do you wish more people knew
about office-to-residential conversions?
LILJEGREN: New financial incentives specifically
for existing building conversions are
emerging and can help fill the financing
gap. For example, there are green financing
options tailored to upgrading existing buildings.
Affordable housing developers have
been piecing together creative lending structures
for a long time, drawing on a mix of
secondary financing sources, tax incentives,
and other programs. Developers converting
office buildings can similarly tap into [numerous]
funding sources to create the capital
stack.
SILWAL: When we were looking at downtown
San Francisco for the ULI Advisory Services
Panel, it became clear [that] there is an
opportunity to better showcase the diversity
of the city's neighborhoods in the urban core.
While the city's neighborhoods are thriving,
downtown has seen an exodus of businesses.
To represent all that San Francisco has to
offer, downtown needs to be more inclusive.
I'm excited about creative ways to program
downtown so communities can showcase
what they are about, and people can experience
the culture and community of the city's
diverse neighborhoods in an engaging way. UL
RON NYREN is a San Francisco-based architecture and urban
design writer.
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2024 Spring Issue of Urban Land

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