Bi-Partisan Revitalizing Downtowns and Main Streets Act introduced in U.S. House
The United States is facing a critical housing shortage, with demand for affordable housing far outstripping supply in many regions.
At the same time, the commercial real estate sector is grappling with lingering effects from the COVID-19 pandemic. Vacant office spaces and underutilized commercial buildings are common sights in many urban, suburban, and even rural areas. These empty properties, once bustling centers of commerce, are now contributing to economic decline, higher crime rates, and urban blight.
However, there is a solution that can address both the housing crisis and the challenges facing commercial real estate: incentivizing the conversion of commercial spaces into residential and mixed-use properties.
This strategy not only adds desperately needed housing units but also revitalizes communities, supports small businesses, and stimulates economic growth.
Addressing the Housing Shortage
The conversion of commercial spaces into residential units offers a powerful tool to increase the housing supply.
Many cities and towns across the country are struggling to meet the demand for affordable housing. By transforming office buildings, shopping centers, and other commercial properties into residential units, we can add thousands of housing units to the market. This would provide immediate relief to renters and buyers who are finding it increasingly difficult to secure affordable housing.
Revitalizing Communities
The pandemic hit the commercial real estate sector hard, leaving many buildings partially or completely vacant. This downturn has had a ripple effect on surrounding communities.
Small businesses, which often rely on the foot traffic generated by nearby offices and commercial centers, have suffered. Property tax revenues have declined, leading to budget shortfalls for local governments. In some areas, the increase in vacant buildings has been accompanied by higher crime rates and urban decay.
Converting these underutilized spaces into residential units would breathe new life into these areas. New residents bring new demand for local goods and services, which in turn supports small businesses and stimulates the local economy. Moreover, the influx of residents would generate additional property tax revenues, helping to fund essential public services and infrastructure improvements. By revitalizing these communities, we can stanch the flow of lifeblood from our urban, suburban, and rural business districts.
Economic Benefits and Job Creation
Incentivizing the conversion of commercial spaces into residential properties would also create jobs and stimulate economic growth.
The construction and renovation work required for these conversions would generate employment opportunities for a wide range of workers, from architects and engineers to construction laborers and tradespeople.
Additionally, as these converted properties are occupied, they will create ongoing demand for goods and services, further boosting the local economy.
Stabilizing the Commercial Real Estate Market
The commercial real estate sector is facing significant challenges, particularly as many partially vacant buildings will soon need to be refinanced at higher interest rates.
This could lead to a further decline in property values, exacerbating the financial difficulties facing property owners and investors. By converting some of these buildings into residential units, we can help stabilize property values across the commercial real estate sector.
As these converted properties become productive assets once again, they will help restore confidence in the market and contribute to the overall economic health of the area.
Legislative Support: The Revitalizing Downtowns and Main Streets Act
Recognizing the potential benefits of converting commercial spaces into residential units, a bipartisan group of lawmakers has introduced the Revitalizing Downtowns and Main Streets Act in Congress.
This legislation, sponsored by Representatives Mike Carey (R-OH), Jimmy Gomez (D-CA), and ten other bipartisan co-sponsors, proposes a temporary investment tax credit to incentivize the conversion of commercial buildings into residential units.
This tax credit would make it financially viable for property owners to undertake these conversions, which can be costly and complex.
By providing this incentive, the legislation aims to unlock the potential of underutilized commercial spaces, turning them into vibrant residential communities that contribute to the economic and social well-being of the nation.
Conclusion
The conversion of commercial spaces into residential and mixed-use properties offers a unique opportunity to address some of the most pressing challenges facing our cities and towns today.
By incentivizing these conversions, we can increase the housing supply, revitalize communities, create jobs, and stabilize the commercial real estate market.
The bipartisan Revitalizing Downtowns and Main Streets Act is a critical step in making this vision a reality. It is a solution that benefits everyone—from homebuyers and renters to small businesses and local governments. Now is the time to seize this opportunity and turn vacant commercial spaces into thriving residential communities.
