In a bold move to address a critical shortage of homes, New York City is spearheading a massive initiative to transform empty office towers into residential apartments. The plan aims to create approximately 12,000 new homes by converting commercial buildings once occupied by financial giants like Goldman Sachs and JPMorgan.
The Driving Force Behind the Conversions
Dan Garodnick, Director of the City Planning Department, stated on Friday 5 December 2025 that the city is encouraged by the rapid progress. He highlighted the stark contrast between the city's high commercial vacancy rates and its dangerously low rental housing vacancy rate. "Creating an opportunity for offices to convert into housing makes a lot of sense," Garodnick told Bloomberg.
This wave of conversions is a central pillar of the 'City of Yes' housing policy. Enacted in 2024 under the administration of outgoing Mayor Eric Adams, the policy introduced significant zoning changes and committed $5 billion in funding. Its overarching goal is to facilitate the creation of 80,000 new homes over the coming 15 years.
Political Priorities and Future Plans
Housing remains a top concern for New Yorkers and was a cornerstone of incoming Mayor Zohran Mamdani's successful campaign. Mamdani, who met with Adams to discuss the transition of power, has pledged to triple the production of publicly subsidised homes, targeting 200,000 new units within a decade.
While expressing appreciation for Adams's work on 'City of Yes', Mamdani's own proposals are more ambitious. He has committed to a $100 billion investment over 10 years to house families earning under $70,000 annually and has also promised a rent freeze.
Challenges and Market Realities
The scale of the need is immense. By mid-2025, New York's metro-wide rental vacancy rate stood at about 2.8%, far below the national average of 7-8%. Developers are already acting, turning former Goldman Sachs and JPMorgan offices into luxury apartments. In Midtown Manhattan, Pfizer's old headquarters is slated to become over 1,500 rental units.
However, experts caution that office conversions are not a simple solution. A significant hurdle is cost. Converting buildings with open floor plans and limited plumbing often results in rents between $3,500 and $7,000 per month, as reported by The New York Times. Nathan Berman of Metro Loft emphasised that producing affordable housing from such projects is economically challenging without city incentives.
Furthermore, demand for commercial property is rebounding. Data from Cushman & Wakefield shows new leasing activity reached 23 million square feet year-to-date, a 37.6% increase from 2024, suggesting the window for conversion may be influenced by a recovering office market.
