October 27, 2023

HUD: Communities and Developers Encouraged to Explore More Commercial to Residential Housing Conversions

New White House Guidebook and Updated HUD Notice would provide new tools to help expand housing supply affordability

Today, the U.S. Department of Housing and Urban Development (HUD) and the Biden-Harris Administration announced important updates that will help bolster our nation’s housing supply and improve housing affordability. The White House released a guidebook, developed in partnership with HUD and other federal agencies, that will help communities and housing providers identify federal resources to finance the conversion of commercial properties to residential uses and mixed-use development. See today’s White House fact sheet here.

As part of this announcement, HUD is releasing an updated notice on how its Community Development Block Grant (CDBG) funding, $10 billion of which has been allocated during this Administration, can be used to boost housing supply – including acquisition, rehabilitation, and commercial-to-residential conversions. This notice is the latest update on how to use CDBG resources to support the development of affordable housing. States and localities can also access up to five times their annual CDBG allocation in low-cost loan guarantees to fund projects such as the conversion of properties to housing or mixed-use development.

“Addressing the affordable housing crisis requires an all-of-the-above approach,” said Secretary Marcia L. Fudge. “The White House guidebook on commercial-to-residential conversions and the updated CDBG notice are just a few of the steps that HUD is taking to help our state and local partners to boost supply.”

In addition, HUD recently released an issue of Evidence Matters focused on office-to-residential conversions, which provides a research overview of the issues motivating the surge in interest in conversions and highlights local examples of conversion projects. HUD is providing additional research funding to develop case studies that can serve as road maps for localities interested in pursuing conversion projects. The Notice of Funding Opportunity recently closed, and awards will be made soon.

“HUD is hard at work listening to stakeholders and exploring solutions that will help expand and preserve housing supply in the country,” said Deputy Secretary Adrianne Todman.“With a shortage of millions of homes nationwide, we need to utilize every resource at our disposal to increase housing supply.”

These actions build off the significant progress the Administration and HUD have already made in implementing President Biden’s Housing Supply Action Plan that details the concrete steps the Administration is taking to ease the burden of housing costs for households by boosting supply. Agencies across the government have taken action to incentivize state and local zoning reforms, pilot new forms of financing, expand and improve existing forms of financing, support innovation in housing production, and much more.

The CDBG notice published today provides updated and expanded guidance on a wide range of housing-related activities that may be funded through the CDBG program – including acquisition, adaptive reuse, rehabilitation, reconstruction, housing counseling, and fair housing planning activities. The notice also clarifies that manufactured housing units that are part of the community’s permanent housing stock are eligible for acquisition or direct homeownership assistance through the CDBG program. Additionally, the notice highlights the importance of planning in protecting and preserving housing and community resilience and provides guidance on how CDBG can support energy and climate-related rehabilitation and tornado safe homes and public facilities.

This post was originally published here.