The financial crisis of the early 1990s was the mother of invention. Now, thirty years later, NYC is a national leader in office to residential conversions and is only just getting started.
Raises lots of questions for me -- most probably showing my lack of knowledge about conversions:
Why have any eligibility date cut off at all? For example, last year‘s 467-m changes set the new date at 1990 (per the slide), but what would the downside be of making it way more recent?
What are the main reasons that conversion applications don’t get approved? Does the city decide that the engineering is unsound, or that they don’t have adequate funding to do what they say they’re gonna do, or they don’t convincingly commit to the affordability requirement?
On average what percentage lower is the net present value of project when it has to include 25% affordable housing? In other words, what percentage does the $7 million you cite represent of the overall value?
Does the affordability requirement continue in perpetuity?
I wonder what long-term effect the affordability allocations have. It would be interesting to see how occupancy, returns and valuation have varied between the properties converted under 421-g versus the 17,000 converted during the same period that didn’t take advantage of the incentives. (I’m assuming most of those 17k didn’t take advantage of the incentive because they didn’t want to meet the affordability requirement, but maybe that’s not correct.)
Does CCM or someone else have what you consider a legit estimate of the total potential number of residential units that could be created via conversion in the city under the current incentive program? I guess you’d probably have to make all sorts of assumptions about things like vacancy rates, interest rates, costs of labor and materials, etc., but I wonder how big a dent conversions could put in the housing shortage.
Are there other things that you think the city could do outside of financial incentives to spur conversions in traditionally more office-dense parts of the city? I’m picturing things like creating more park or recreation space in an area with a bunch of potentially convertible buildings, changing zoning or somehow improving city services like transportation, safety or sanitation in ways that would somehow make them more suitable to a neighborhood with more housing.
Sorry for the mongo post. Thanks for any/all responses!
Raises lots of questions for me -- most probably showing my lack of knowledge about conversions:
Why have any eligibility date cut off at all? For example, last year‘s 467-m changes set the new date at 1990 (per the slide), but what would the downside be of making it way more recent?
What are the main reasons that conversion applications don’t get approved? Does the city decide that the engineering is unsound, or that they don’t have adequate funding to do what they say they’re gonna do, or they don’t convincingly commit to the affordability requirement?
On average what percentage lower is the net present value of project when it has to include 25% affordable housing? In other words, what percentage does the $7 million you cite represent of the overall value?
Does the affordability requirement continue in perpetuity?
I wonder what long-term effect the affordability allocations have. It would be interesting to see how occupancy, returns and valuation have varied between the properties converted under 421-g versus the 17,000 converted during the same period that didn’t take advantage of the incentives. (I’m assuming most of those 17k didn’t take advantage of the incentive because they didn’t want to meet the affordability requirement, but maybe that’s not correct.)
Does CCM or someone else have what you consider a legit estimate of the total potential number of residential units that could be created via conversion in the city under the current incentive program? I guess you’d probably have to make all sorts of assumptions about things like vacancy rates, interest rates, costs of labor and materials, etc., but I wonder how big a dent conversions could put in the housing shortage.
Are there other things that you think the city could do outside of financial incentives to spur conversions in traditionally more office-dense parts of the city? I’m picturing things like creating more park or recreation space in an area with a bunch of potentially convertible buildings, changing zoning or somehow improving city services like transportation, safety or sanitation in ways that would somehow make them more suitable to a neighborhood with more housing.
Sorry for the mongo post. Thanks for any/all responses!