I've read that one of the biggest problems is that while the demand for office space has dropped, the cost to convert to residential is so high that building owners can't break even on a reasonable timeline so they have little incentive to convert. I'm not an expert at all, but I think that in addition to building out the new floor plans you pretty much have to redo all the plumbing and electrical and I believe in many places the rules for emergency exits are different between the two building types. I think in some cases it would actually just be cheaper to tear the entire building down and build a new one from the ground up.

I think many owners have the mindset that if they're going to lose money either way they'll stick with the devil they know and hope for a miracle rebound. It sounds like this program is offering tax incentives to help offset those conversion costs to make it much easier for building owners to break even after a conversion.