One fruitful debate that is already taking place in Albany is how to convert offices and hotels into housing. Reimagining Midtown the way the downtown corridor around the World Trade Center was revamped after 9/11 is the best way forward. The pandemic hasn’t hobbled the Manhattan economy below Canal Street as badly because there is so much housing now in the Financial District and Tribeca. Mixed-use neighborhoods safeguard against such devastation.
Conversion, of course, is easier said than done. Adams and Hochul both must announce a far more aggressive plan—and dedicate a lot more city and state funding—to convert empty or underutilized hotels to affordable housing.
It is a challenge that extends beyond Midtown. Mobilizing around it as a public priority is essential, especially since so much inertia tends to settle around large projects in New York.
Hochul and the Legislature should dedicate far more state funding for conversions of hotels and office buildings. Developers cry poverty too often, but this a moment that demands New Deal–style energy, with the government taking a lead role in revitalizing the housing sector, which is facing a severe shortage.
Undoubtedly, zoning and other logistics will make things difficult. But New York state, with the budget of a small nation, can pave the way if Hochul decides she will make the transition her legacy.
Another question is how to address the 2017 Midtown East rezoning, which significantly limited residential development between East 39th and 57th streets. Developers would want to proceed with conversions without going through the ULURP process—the land use review procedure that requires the City Council’s sign-off—but that is highly unlikely. City lawmakers won’t forfeit that kind of power.
Rather, the Adams administration should begin working with the council on a proposal to revisit Midtown East and accelerate the schedule of office conversions while permitting more residential development in a corridor that could use it.
The Real Estate Board of New York wants public incentives to spur office conversions. Progressives might scoff at the idea—the real estate industry is inordinately rich and powerful—but they should view such a demand as a chance for the city and state to assert themselves in the next phase of development.
The great building of the 20th century happened when the city, state and federal governments poured enormous amounts of money into housing and infrastructure. Public and subsidized housing came about because the public sector got serious about making it happen. Adams and Hochul can’t dither as developers complain; instead, they should set the terms of engagement while marshaling public resources to usher in a new era of housing.
We will never need as much office space again. Computing power is strong enough to allow some segment of the white-collar workforce to stay home. The commercial real estate industry will soon face a reckoning.
The transition doesn’t have to be painful if the city and state decide a housing revolution is in our future and dedicate adequate resources to get us there.
