Back in 1995, the city implemented a generous subsidy for office conversions that helped spur the creation of more than 12,000 market-rate units over the following 10 years. Since 9/11, the financial district has more than doubled its population of residents, attracted a steadier stream of tourists, and reinvented itself as a multi-use neighborhood with a mix of offices, amenities, and homes.Ī major force behind Lower Manhattan's transformation was significant tax breaks for developers to convert office buildings into homes, and incentives for companies to relocate to the area. Garodnick sees Lower Manhattan as an example of how to transform a '9-to-5,' office-dominated neighborhood into a more vibrant community. NYC has already turned 9-to-5 neighborhoods into 24/7 locales, and now it's Midtown's turn Storefront businesses in Midtown are shifting from big box retail to food and drink establishments. 'This is no longer an office market where people gravitate to the jobs, it's the jobs that gravitate to where the people are and what the people want,' Lynne Sagalyn, a professor emerita of real estate finance at Columbia University, told Insider. And converting some office space into other uses can boost demand for commercial real estate by making an area more desirable. 'We saw an opportunity now because there is a will to take bold action to create housing and to think about ways to make our job centers perform even better.'Ĭommercial business districts that are more mixed-use - meaning people can live, work, play, and patronize a range of businesses - are much healthier. 'We have seen Midtown South as a place that is a bit out of whack with other commercial districts in the borough because it is not mixed-use in character,' Garodnick said. The city's recent moves to make it easier to convert commercial space into apartments is projected to spur the creation of 20,000 new homes across New York City.ĭan Garodnick, the director of New York City's Department of City Planning, told Insider the city wants Midtown South to become 'a 24/7 live-work neighborhood.' The area - between 23rd and 40th streets and Fifth and Eighth Avenues - is home to 7,000 businesses and 135,000 jobs. He recently unveiled a plan to rezone Midtown South to encourage new housing construction and the conversion of office and manufacturing spaces into apartments. Mayor Eric Adams wants to replicate that success in Midtown. And New York City has had success transforming single-use office districts, most notably Lower Manhattan's financial district, into more vibrant mixed-use places. Mixed-use office districts - with apartments, a range of retail, restaurants, other businesses, public spaces and amenities like parks, schools, and libraries, and good mass transit - are much better for cities. The healthiest business districts do much more than their name suggests. The combination of office vacancies and a severe housing shortage and homelessness crisis have put pressure on the city to do something about it. Old manufacturing neighborhoods like the Garment District are no longer the industrial powerhouses they once were, but they still prohibit people from living there. For decades, the city's zoning laws have made it illegal to build housing in large parts of central Manhattan. One way to revive it is to make it a place more people call home. Like most American business districts, Midtown is heavily dependent on office workers and tourists. Office workers aren't particularly keen to return to Times Square - the most Instagrammed place in America is seeing about 15% less foot traffic than it did in 2019. Many of the office towers that dominate its skyline are sitting empty as workers settle into remote or hybrid lives and companies drop their leases. Account icon An icon in the shape of a person's head and shoulders.

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