Cities across the country are witnessing one of the pandemic’s long-term consequences: Reduced workforce in city centers. With many companies electing to downsize or not renew their office leases, thousands of small businesses that were sustained by the flow of the 9-to-5 workforce have had no choice but to close their doors for good – leaving workers out of a job and entrepreneurs out of luck. If not remedied quickly, these closures could imperil the cultural vibrancy of downtowns—along with their small businesses—from coast to coast.
Fortunately, Congress is working on a solution that would help stabilize city centers and downtown communities to help them rebound, revamp, and come back even stronger.
Introduced by Sens. Debbie Stabenow (D–Mich.) and Gary Peters (D–Mich.), along with Reps. Jimmy Gomez (D-Calif.), Dan Kildee (D-Mich.), and John Larson (D-Conn.), the Revitalizing Downtowns Act would provide a new federal tax credit for converting empty or obsolete office structures into mixed-use residential or business spaces. The bill proposes a 20 percent tax credit to help incentivize and offset the costs of conversion. If developers choose to construct housing, a portion of new units must be available as affordable housing.
This new legislation is important because, even though many of these older downtown buildings may be under-occupied or even vacant, market forces alone typically do not lead developers to invest in large-scale conversions. Converting obsolete office structures into modern living or retail spaces can be challenging and expensive – just imagine the costs of completely renovating an office space to residential units complete with showers, kitchens, and living areas that did not previously exist.
Now is the time to reshape the downtown space for a more prosperous future. Across the country employee visits to the office have fallen to roughly a quarter of pre-pandemic levels. Converting older and excess office buildings into affordable housing or restaurants represents a unique chance to maintain the economic stability of America’s downtowns, ultimately helping create more thriving communities and resilient cities. It is a sentiment shared by the members of the Revitalize Our Cities Coalition, a group of national and regional economic development organizations across 37 states, dedicated to strengthening urban centers and increasing the resiliency of downtowns post-pandemic.
While the pandemic has devastated our downtowns, it has also presented us with an opportunity to reshape them. Organizations, small business owners, and urban advocates across the country have brainstormed “new ways” to ensure that downtown remains as vibrant as ever, even with the influx of vacant office space. The Revitalizing Downtowns Act can serve as the foundation for this reimagining by offering incentives to developers to grow the city centers we know and love.
The International Downtown Association recognizes that fostering vibrant centers across the nation requires innovative, tireless work. As we continue to recover from the COVID-19 pandemic, urban place management organizations must prioritize economic competitiveness and fiscal resiliency. For years, downtown has been synonymous with the office. It has been a place to commute to during the week, but leave each night after a long day. COVID upended the status quo and with it the business of so many restaurants, shops, bars, and hotels that relied on office employees.
It is clear then that business, professional, and civic leaders must work collaboratively to create innovative and achievable solutions for cities across America as it aims to Build Back Better from COVID-19. Passing the Revitalizing Downtowns Act would be an encouraging first step and our organization is proud to support it.