Biden Administration Unveils Strategy to Convert Commercial Buildings Into Homes

A Federal Push to Turn Offices Into Homes

On October 27, 2023, the Biden-Harris administration announced a coordinated federal strategy to accelerate the conversion of commercial buildings, especially underused office space, into residential housing. The plan leaned heavily on two agencies most first-time homebuyers do not usually think about together: the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Transportation (DOT).

The goal was blunt. With office vacancies elevated in many downtowns after the pandemic and housing supply still tight, the administration wanted to make it easier and cheaper to repurpose existing buildings rather than wait years for new construction.

What the Strategy Actually Did

The October 27, 2023 announcement pulled together several pieces:

• A federal resources guidebook. The White House released a Commercial to Residential Federal Resources Guidebook identifying more than 20 federal programs across six agencies that can help finance conversions, including low-interest loans, loan guarantees, grants, and tax incentives.
• HUD flexibility on CDBG funds. HUD issued an updated notice clarifying that Community Development Block Grant (CDBG) dollars can be used for acquisition, rehabilitation, and commercial-to-residential conversions, not just traditional new-build housing work.
• DOT transit-oriented conversions. The Department of Transportation released new guidance letting transit agencies transfer property at no cost to local governments, nonprofits, and for-profit affordable housing developers for projects near transit, including commercial-to-residential conversions.
• GSA and other agency support. The General Services Administration and other federal partners signaled they would identify surplus federal properties that could be repurposed for housing.

Why This Matters for First-Time Homebuyers

First-time buyers are not directly handed a check under this strategy, but the knock-on effects can show up in the markets they shop in:

• More housing units downtown. Conversions add to the overall supply of homes in central neighborhoods, which can ease price pressure over time in tight urban markets.
• New for-sale condos, not just rentals. While many conversions will target rental housing, some projects produce for-sale condos. First-time buyers priced out of single-family homes sometimes find a converted condo in a walkable neighborhood is a realistic entry point.
• Transit-adjacent inventory. The DOT transit-oriented piece specifically targets properties near transit lines, which tend to hold value well and reduce transportation costs for households.
• Federal financing stacks. Developers using the guidebook's programs often combine them with state and local first-time homebuyer assistance (like down payment aid) to keep end prices reachable.

What Buyers Should Watch For

If you are a first-time buyer in a city with a significant office vacancy problem (think older downtowns in the Northeast, Midwest, and parts of the West Coast), keep an eye on:

• Local planning and zoning announcements about conversion projects.
• New condo developments marketed as adaptive reuse or office-to-residential conversions.
• Whether your state or city housing finance agency layers its first-time homebuyer programs on top of units inside converted buildings.
• Property tax abatements some cities offer for conversions, which can lower monthly carrying costs.

The Bigger Picture

The October 2023 strategy did not magically produce housing overnight. Conversions are expensive and often technically difficult (floor plates, plumbing, and natural light all matter). But by aligning HUD financing flexibility, DOT land transfer rules, and a single federal guidebook, the administration tried to lower the friction for developers deciding whether to demolish, sit on, or repurpose an empty office building.

For first-time homebuyers, the practical takeaway is simple: over the next several years, more of the homes coming to market in major cities may start their lives as offices. Knowing that helps when you are evaluating neighborhoods, condo buildings, and the mix of homeownership programs that might apply.