New York City office buildings formerly used by financial powerhouses such as Goldman Sachs, JPMorgan, and Pfizer are being transformed into 12,000 apartments to curb the housing crisis.
City Planning Department Director Dan Garodnick told Bloomberg on Friday that there were positive signs that more housing would be available for purchase in New York City.
“We’re very encouraged by what we’re seeing in a short period of time,” he said.
“We have a high vacancy rate in our commercial office buildings and a very, very dangerously low vacancy rate in our rental housing, and creating an opportunity for offices to convert into housing makes a lot of sense.”
The initiative is part of City of Yes, a housing policy passed in 2024 by the controversial and outgoing New York City Mayor Eric Adams’ administration that made zoning changes while providing $5 billion in funding. The policy aims to create 80,000 new homes over the next 15 years.
Housing is one of the key issues for New Yorkers and a major policy platform that incoming New York Mayor Zohran Mamdani campaigned on, pledging to triple the city’s production of publicly subsidized homes and aiming to construct 200,000 new units over the next 10 years.
While Mamdani vocalised his support for Adams’ housing policy, his own went a step further in pledging $100 billion over 10 years to provide homes for families earning less than $70,000 a year. He has also pledged to freeze rents.
“I said time and again that I appreciated the mayor’s work on the City of Yes,” Mamdani said on Tuesday when he met with Adams to discuss a transition of power.
According to a report by consultancy firm MMCG Invest, the metro-wide vacancy rate in New York City is about 2.8 per cent by mid-2025, still substantially lower than the nationwide average of 7-8 per cent.
Real estate developers have already changed the former office buildings of Goldman Sachs and JPMorgan into luxury apartments. Meanwhile, in midtown Manhattan, developers are vying to transform Pfizer’s former headquarters into more than 1500 rentals.
While these transitions are seen as a positive step for New York’s housing crisis, they are not a silver bullet.
Firstly, according to the latest quarterly report from commercial real estate company Cushman and Wakefield, demand for commercial property has increased substantially, with year-to-date new leasing totaling 23 million square feet, a 37.6 per cent increase from the same period in 2024.
Another issue is the conversion rate for transforming an office building into affordable apartments.
The cost of transforming an office building, which typically has open plans, limited bathrooms, and window spaces, means rents can range from $ 3,500 to $ 7,000 a month, according to a New York Times report.
Head of Metro Loft, Nathan Berman, told The Times it’s challenging to cover the costs of conversion while producing affordable housing for middle to lower-income residents.
“Without public policy, without the city offering incentives, it just economically is not viable,” he said.
