Commercial real estate glut/crash. Could it be repurposed for housing?

[jmbar2]

This guy from Nightingale Associates posts news everyday of major commercial real estate being foreclosed, auctioned or sold for pennies on the dollar all over the US.

This might be a great opportunity for states/federal agencies/nonprofits to acquire them and convert them into low-income housing. I know that there are challenges with such conversions, particularly with centralized plumbing and utilities. But I could envision a form of single-room occupancy, or dorm style housing with shared common areas for bathing, laundry, etc.

I lived in a building like this earlier in my life. We all had our own spaces, but the showers were down the hall.

Given the severity of the housing crisis, I love to see some of these properties acquired.
Here's a white paper on modern designs for SROs.
https://fastercapital.com/content/The-Future-of-SROs--Innovations-in-Design-and-Technology.html

Link to tweet

[bucolic_frolic]

1. Takes money to renovate for lowest income population

ROI expected to be very low or non-existent. So government state, local or federal has to get involved, or community housing organizations.

[jmbar2]

2. That's the idea...

We need massive public investment in housing again. We current have market failure in affordable housing. As you say, the incentives just aren't there to build it for profit.

Before the Reagan revolution, the US invested a lot into affordable housing, especially in the post-war era.

In the 1990s, there was a burst of construction using low-income housing tax credits to incentivize private investors to build affordable housing. They received tax breaks for keeping rents pegged to incomes. https://www.chicagofed.org/publications/chicago-fed-letter/2025/514

Unfortunately, that housing is now "graduating" from the tax incentive period, and is reverting to "market rents", or being purchased by hedge funds. It would be cheaper for the government to repurchase these properties to keep low-income housing than to build new. Or possibly to convert some of the commercial properties that are on the market for cheap.