Proposed tax credits to turn empty offices into apartments could come back next year

Hart Van Denburg/CPR News
The Petroleum Building in downtown Denver, art the corner of Broadway and the 16th Street Mall.

Colorado lawmakers will try again next year to put some state funding toward turning empty commercial space into housing.

A proposal to give developers millions of dollars in tax credits to encourage them to convert properties like empty office towers into residential units stalled out in the legislative session that ends today.

“It’s a good policy and we will try again,” said Rep. Matt Soper, a Republican from Delta and one of the bill’s sponsors.

Soper’s bill was one of numerous tax credits lawmakers proposed this year that would have come out of future taxpayer refunds, although only a few made it all the way through the process.

The bill was intended to address two problems plaguing communities across the state — a lack of affordable housing and a glut of empty commercial buildings. In Denver, about 30 percent of the office space downtown is sitting empty as remote work looks to become a permanent fixture of post-pandemic life. That’s a lot of wasted space. And it’s bad for shops and restaurants in the area that used to rely on foot traffic from office workers.

Multiple proposals are circulating to turn outdated office buildings into apartments, but many of the efforts are stalled. Those types of projects are expensive, and it’s challenging to adapt the layout of a cubicle farm into a place where people can live.

But the longer buildings sit empty, the harder it will be to fix the problem. The lack of energy downtown makes it a less appealing destination, which can keep people away when it comes time to go shopping or meet up with friends, making it feel even more forlorn.

Denver Mayor Mike Johnston has said the city is trying to put together public-private partnerships that could get these types of projects off the ground, with hopes to ensure the housing units are affordable.