It appears funding is coming from private sources and upkeep labor is being organized by the 32BJ Union, a massive local union that specializes in affordable housing that’s populated with people who work and specialize in “cleaners, property maintenance workers, doormen, security officers, airport workers, window cleaners, building engineers, school and food service workers, factory workers, etc”.
The conversion costs and labor appear to be funded and plan to be performed by GFP Real Estate and city partners, no doubt in exchange for good favor for future permit approvals and project integration by the Mayor’s administration.
Having trouble finding any real info on this, but it appears that the city isn’t actually performing the work, just changing rules and providing incentives to do the conversion.
So the “no cost” is really just that the city isn’t paying for it.
Seems like the setup is that the developer gets paid back via the market rate housing revenue, while the city gets a guarantee a minimum number of the new residences are rent controlled. So the developer self funds (or take loans) to start the project, it seems. And the city is still the landowner as far as I can tell, so the developer pays the city a share, which is how the city funds getting new office buildings for agencies to replace these.
They rent a building to a property-developer/manager (eg Hines, Douglas Elliman, etc) that converts to residential and rents apt units to individuals, with a guaranteed portion of them affordable and rent stabilized.
It’s like if the city had a fleet of commercial vans they let a local taxi cab company lease at a submarket rate and convert to taxis. In exchange for the deal on the fleet, the taxi company sets aside a certain number of cabs dedicated to shuttling New Yorkers whose disabilities make public transit hard to use.
This property development business model is common, as is the affordable housing stock deal developers make with the city for things like tax breaks. What’s unique here is that the mayor’s office addressed the problem of perpetually lagging housing stock creation and skipped past years of slow property development and construction by offering a large building in the city that’s already built and ready to convert to residential. The city will then use the lease revenue to construct a new office. In the meantime, New Yorkers have more places to live.
Where I live they are trying to do the same. Sadly the shape of the building do not work well for housing. There’s more inside dark areas than window accessible areas. The proposal was to make a “community area” towards the centre of the building which is a terrible idea. The alternative is converting the inner area to apartments without any sunlight, which isn’t going to work even if it’s legal. The building sits empty because nobody can provide a good idea how to use it.
It’s wise to look for the potential ‘catch’, and the story provides it if you look, though the headline itself makes it pretty obvious by stating there will be 3,000 unaffordable residences.
In this case, the ‘catch’ still seems pretty solid. Sure a real estate company gets to gouge 3,000 units, but 1,000 units may well be worth that. But it does mean continued vigilance, to make sure the real estate company doesn’t somehow screw up stewardship of those 1,000 affordable units.
The point is that the original commenter accurately noted that there are costs, but this particular little screenshot does nothing to explain the nuance.
So you have to acknowledge the costs and how they were actually handled, instead of just 'I need sources for the very obvious reality that renovating a building isn’t “free”.
“No cost to the city” is accurate, but it’s completely reasonable to fixate on how ‘no cost’ doesn’t make sense and not think hard enough on the ‘to the city’ part of it and ask for some explanation/discussion of that nuance.
Converting office space into apartments has a cost, it will be easily recouped but there is a cost.
Seems like a good idea though.
It appears funding is coming from private sources and upkeep labor is being organized by the 32BJ Union, a massive local union that specializes in affordable housing that’s populated with people who work and specialize in “cleaners, property maintenance workers, doormen, security officers, airport workers, window cleaners, building engineers, school and food service workers, factory workers, etc”.
The conversion costs and labor appear to be funded and plan to be performed by GFP Real Estate and city partners, no doubt in exchange for good favor for future permit approvals and project integration by the Mayor’s administration.
Pretty smart if you ask me.
Source: https://www.nyc.gov/mayors-office/news/2026/09/mamdani-administration-advances-plan-to-build-nearly-4-000-new-h
Having trouble finding any real info on this, but it appears that the city isn’t actually performing the work, just changing rules and providing incentives to do the conversion.
So the “no cost” is really just that the city isn’t paying for it.
https://www.metro-manhattan.com/blog/which-manhattan-buildings-are-office-conversion-candidates-under-mamdanis-housing-first-agenda/
Seems like the setup is that the developer gets paid back via the market rate housing revenue, while the city gets a guarantee a minimum number of the new residences are rent controlled. So the developer self funds (or take loans) to start the project, it seems. And the city is still the landowner as far as I can tell, so the developer pays the city a share, which is how the city funds getting new office buildings for agencies to replace these.
https://www.nyc.gov/mayors-office/news/2026/09/mamdani-administration-advances-plan-to-build-nearly-4-000-new-h
I had to dig into what they mean by cross-subsidy to figure that out
So do they sell off sections of the building to developers, who do the work and then sell units back to owners at a price cap?
They rent a building to a property-developer/manager (eg Hines, Douglas Elliman, etc) that converts to residential and rents apt units to individuals, with a guaranteed portion of them affordable and rent stabilized.
It’s like if the city had a fleet of commercial vans they let a local taxi cab company lease at a submarket rate and convert to taxis. In exchange for the deal on the fleet, the taxi company sets aside a certain number of cabs dedicated to shuttling New Yorkers whose disabilities make public transit hard to use.
This property development business model is common, as is the affordable housing stock deal developers make with the city for things like tax breaks. What’s unique here is that the mayor’s office addressed the problem of perpetually lagging housing stock creation and skipped past years of slow property development and construction by offering a large building in the city that’s already built and ready to convert to residential. The city will then use the lease revenue to construct a new office. In the meantime, New Yorkers have more places to live.
3/4 of the apartments will be market rate, I bet it’s paid off in the first year when you look at market rate there.
Vacant buildings have a cost too. A vacant high rise building that gets repossessed becomes a massive cost to the city.
Where I live they are trying to do the same. Sadly the shape of the building do not work well for housing. There’s more inside dark areas than window accessible areas. The proposal was to make a “community area” towards the centre of the building which is a terrible idea. The alternative is converting the inner area to apartments without any sunlight, which isn’t going to work even if it’s legal. The building sits empty because nobody can provide a good idea how to use it.
Can you just get the win? It is healthy to be skeptic but in the context of how shit everything else is, what’s the point of stating the obvious?
It’s wise to look for the potential ‘catch’, and the story provides it if you look, though the headline itself makes it pretty obvious by stating there will be 3,000 unaffordable residences.
In this case, the ‘catch’ still seems pretty solid. Sure a real estate company gets to gouge 3,000 units, but 1,000 units may well be worth that. But it does mean continued vigilance, to make sure the real estate company doesn’t somehow screw up stewardship of those 1,000 affordable units.
This is the haternet. The only reason people come online is to nitpick and naysay others.
More good steps in the right direction 👍
A lot of commercial real estate has gone unoccupied since COVID and the explosion of remote work. I see for lease signs all over downtown in my city.
So it doesn’t necesarily have a cost and could in fact be revenue positive to convert to residences.
Opportunity cost
Source please if you have one, I’d love to read about what those costs are if they’re real
https://www.nyc.gov/mayors-office/news/2026/09/mamdani-administration-advances-plan-to-build-nearly-4-000-new-h
The costs are real of course, but seemingly handled by a private company that was willing to pay for the project.
Which means the cost to the city was - everyone all together now:
The point is that the original commenter accurately noted that there are costs, but this particular little screenshot does nothing to explain the nuance.
So you have to acknowledge the costs and how they were actually handled, instead of just 'I need sources for the very obvious reality that renovating a building isn’t “free”.
“No cost to the city” is accurate, but it’s completely reasonable to fixate on how ‘no cost’ doesn’t make sense and not think hard enough on the ‘to the city’ part of it and ask for some explanation/discussion of that nuance.
Sinks and showers and walls do not install themselves? What kind of a source are you looking for here?
Just because there is A cost, doesn’t mean it cost the city anything. The original comment sounds like an assumption, and I’d like to validate it