Legislators aim to make office-to-housing conversions easier

Lawmakers around the country are looking for ways to spur conversions of office space to residential use.

Such projects come with challenges such as inadequate plumbing, not enough exterior-facing windows, and footprints that don’t easily lend themselves to residential use. These conditions raise the cost for developers.

Some states are trying to make office-to-housing conversions more attractive options for those willing to invest in them. Remedies include waiving development impact fees, introducing tax incentives, and streamlining zoning changes to spur conversions.

With the national office vacancy rate at 17.1%, close to a 30-year high, and much higher in some locations, officials see an opportunity to revitalize downtowns by adding badly needed housing through conversions. That goal is resulting in targeted legislation.

One example: a Democratic legislator in Oregon is proposing a bill that would require local governments to waive most impact fees to reduce the cost of conversions. Impact fees typically go toward water, sewer, and transportation infrastructure. This shows that some lawmakers support office-to-residential conversions strongly enough to sacrifice impact fee income.