Office-to-Housing Conversion in Downtown San José

Of 99 commercial buildings at least 60 feet tall in Downtown San José, 19 pencil for residential conversion with no subsidy, and 18 more — 2,452 homes — pencil only with a grant from the RESIDE Act.

CA-16 · Downtown San José, California · Screened from City of San José open GIS data · Last updated 2026-09-12 · Cite or download the data

Buildings screened

≥ 60 ft, commercial zoning

Pencil unsubsidized

no grant required

Unlocked by RESIDE

pencil only with the grant

Homes unlocked

2,452

in those buildings

Never pencil

at default assumptions

Grant requested

$126.3M

under the modeled formula

Loading building data…

Every assumption in the model is a slider. Change conversion cost, unit size, circulation efficiency or completed value in the Assumptions tab and all 99 buildings re-score and re-rank live. The full analysis continues below.

San José says 1,500 homes. This model says 2,452 — and the grant runs out first.

In February 2026 San José city staff reviewed downtown’s underused office stock and estimated roughly 1,500 homes’ worth of potentially viable conversion projects, of which they projected 611 would actually be built. This model screens the same submarket building by building and finds 18 buildings — 2,452 homes — that fail on financing alone and would pencil with a RESIDE Act grant.

The interesting number is not the homes. It is the money. Under the award formula modeled here — 30% of eligible conversion cost, capped at $60K per home and $10.0M per award — those 18 buildings would request $126.3M. The RESIDE Act’s national ceiling is $100 million per year, and only in years when HOME appropriations exceed $1.35 billion.

Downtown San José alone would exhaust the entire national program — one neighborhood of one city, at 126% of a ceiling meant to cover every eligible state and locality in the country.

But that is an artifact of the formula, not of the buildings. The actual financing gap across those same 18 buildings is only $59.5M. A formula award gives them 2.1× what they need to close — $51K per home where $24K would do. Sized to the gap instead, the same 2,452 homes fit comfortably inside the national program with room for other cities.

That is the most consequential finding on this page, and it is a design question HUD still has open: the statute caps awards at $10.0M but does not prescribe how to size them. A gap-based NOFA would unlock roughly twice the housing per federal dollar as a percentage-of-cost NOFA. HUD has not yet published the award formula, so both remain possible.

Why most office buildings can never become apartments

The binding constraint on office-to-residential conversion is floor-plate geometry, not financing. Apartments need light and air; office floors were built deep on purpose.

300 S 1st St — 75% of each floor sits within daylight reach of a facade. The hatched area is windowless core: 5,215 sq ft per floor that must be renovated but can never be rented as an apartment. Deepest interior point: 70 ft from the nearest window.

Building codes limit how far a habitable room can sit from a window — roughly 25 to 35 feet. This model erodes each real building footprint inward by 35 feet, the generous end of that range. What survives the erosion is windowless dead core. What remains is the daylit band where apartments can legally go.

Across the 99 buildings screened here, the median has 74% of its floor area within daylight reach and a deepest interior point 66 feet from the nearest window. 32 of them are past the 80-foot threshold where conversion requires carving a light well through the building — at which point it effectively never pencils.

Conversion cost is charged on gross floor area while revenue is earned only on the daylit band. That is not an accounting trick — it is the real economics. You must gut, seismically brace and sprinkler the windowless core, but you can never rent an apartment in it. Deep floor plates are penalized twice, which is precisely why they fail in practice.

This is why a subsidy program alone does not produce conversions, and why a list of vacant buildings is not a pipeline. Information was never the bottleneck — cities have published vacancy reports for years. The bottleneck is that establishing which specific buildings are physically convertible is expensive expert work, and most of them are not.

The 18 buildings the RESIDE Act would unlock

Each of these fails on financing rather than geometry: the floor plate works, the pro-forma does not, and a grant closes the difference. Buildings are ranked by conversion suitability score.

Buildings in Downtown San José that pencil for residential conversion only with a RESIDE Act grant, modeled 2026-09-12.
Address	Score	Stories	Homes	Daylit	Depth	Gap	Grant
225 E Santa Clara St (south)	90	13	257	87%	53 ft	$2.5M	$10.0M
505 E Santa Clara St	89	8	192	89%	56 ft	$929K	$10.0M
121 S Market St	88	12	115	89%	52 ft	$715K	$6.9M
104 S Market St	87	8	164	86%	55 ft	$3.3M	$9.8M
152 N 3rd St	86	13	319	85%	55 ft	$6.6M	$10.0M
97 E St James St	86	5	49	90%	46 ft	$169K	$2.9M
111 N Market St	85	12	185	81%	51 ft	$8.1M	$10.0M
50 E Julian St	83	6	60	87%	49 ft	$793K	$3.6M
596 S 2nd St	82	5	54	87%	50 ft	$787K	$3.2M
233 W Santa Clara St	81	10	126	84%	58 ft	$3.4M	$7.6M
96 N 3rd St	81	9	92	86%	55 ft	$1.8M	$5.5M
150 Almaden Blvd	81	19	228	83%	60 ft	$8.3M	$10.0M
111 Almaden Blvd	80	11	159	82%	59 ft	$6.3M	$9.5M
427 Auzerais Ave	79	5	103	86%	61 ft	$2.0M	$6.2M
210 N 4th St	77	6	60	85%	55 ft	$1.8M	$3.6M
156 E St John St	76	7	147	83%	68 ft	$4.7M	$8.8M
26 N 5th St	74	7	85	80%	57 ft	$4.4M	$5.1M
200 S Market St	69	5	57	79%	59 ft	$3.0M	$3.4M

Also profiled in detail — the highest-scoring buildings in the survey: 1 Almaden Blvd, 99 Almaden Blvd, 225 E Santa Clara St (north), 55 Almaden Blvd, 477 S Market St, 111 W St John St and 16 N 3rd St.

“Gap” is conversion cost minus completed value before any subsidy. “Grant” is the modeled RESIDE award. Where the grant exceeds the gap, the formula is over-funding the project — see the finding above. All 99 screened buildings, including those that do not pencil, are in the survey above.

What San José is already doing

The city has moved ahead of the federal program, and its own incentive has a deadline that arrives first.

In February 2026 the San José City Council voted unanimously to extend its downtown residential high-rise incentive program to office-to-residential conversion projects creating at least 20 homes. The first 500 homes receive a full waiver of construction taxes, elimination of inclusionary housing fees, and a 50% reduction in parkland in-lieu fees. A second phase covering another 1,000 homes halves construction taxes and cuts park fees by 30%. City staff estimated the package would waive roughly $16 million in fees and taxes.

To qualify, a project must sit in the Downtown Planned Growth Area, occupy a building constructed before 2021 that is not Class A office space, and pull a building permit by the end of 2026. That last condition is doing a lot of work: the federal program this page models does not begin until fiscal year 2027. A project waiting on a RESIDE grant may miss the city incentive that would have made it viable.

The context for all of it is an office market that has not recovered. Downtown San José’s office vacancy rate was 30.8% in the first quarter of 2026, the lowest of the three major Bay Area downtowns but still trending upward. The pipeline is not correcting on its own: Google demolished roughly 80 acres of downtown for its Downtown West campus and then paused the project, leaving the site largely vacant and its planned 7 million square feet of offices and about 4,000 homes unbuilt. Meanwhile San José’s state housing obligation for the 2023–2031 cycle is 62,200 homes.

CA-16 is represented by Sam Liccardo, who was Mayor of San José from 2015 to 2023 — the district's member of Congress is the former chief executive of the city this analysis covers.

What the RESIDE Act actually funds

The RESIDE Act is law, but its funding is contingent and its money goes to cities rather than developers. Both facts are widely misreported.

The Revitalizing Empty Structures Into Desirable Environments Act was introduced as H.R. 5591 in the 119th Congress and enacted as Section 210 of the 21st Century ROAD to Housing Act, signed into law on July 11, 2026. It directs HUD to run a Blighted Building to Housing Conversion Program awarding competitive grants to convert vacant commercial and industrial buildings into affordable housing, with priority for Opportunity Zones and economically distressed areas.

The program has no dedicated appropriation. HUD may use up to $100 million of the amount by which annual HOME Investment Partnerships appropriations exceed $1.35 billion, in each of fiscal years 2027 through 2031. In a year Congress funds HOME at or below $1.35 billion, the program receives nothing at all. The $100 million figure widely quoted for this program is a contingent ceiling, not an expected annual sum.

Individual awards are capped at $10.0M, and eligible applicants are states and localities that are eligible HOME grantees — not private developers or building owners. That changes what this tool is for. It is not a developer’s capital stack; it is a worksheet for the grant application a city would file, and for the question of which buildings would justify the ask.

Because HUD has not published a Notice of Funding Availability, the award formula used here — 30% of eligible conversion cost, capped at $60K per home and $10.0M per award — is modeled on how comparable HUD gap-financing programs are structured. The $10.0M per-award cap is statutory. The rest is an assumption, and 59 of the 99 buildings here hit that statutory ceiling.

How this was computed, and what it cannot tell you

Every figure on this page is reproducible from public data. Stating the limits is part of the method, not a disclaimer attached to it.

Building footprints, LiDAR-derived heights and zoning come from the City of San José’s open GIS service. Footprints are projected to a local tangent plane in feet, eroded inward by 35 feet to separate daylit band from dead core, and the largest circle that fits inside each footprint gives the distance from the deepest interior point to the nearest facade. Unit yield is the daylit band times a 80% circulation factor divided by a 750 sq ft average home, across every floor above the ground floor. Cost is a base of $260/sq ft plus itemized change-of-occupancy triggers — plumbing risers, seismic retrofit, operable windows, egress stairs, sprinklers — weighed against completed value, then against the modeled grant.

The geometry math is validated against shapes with known analytic answers, and computed floor areas agree with the city’s own recorded areas to within 0.01%, which confirms the coordinate projection. The browser model that powers the interactive survey above is checked against the Python engine on every build; both must agree on units, cost, grant, gap, tier and score for all 99 buildings.

What this tool does not know

It screens geometry from footprints. It cannot see interior cores, columns, ceiling heights, post-tension slabs or mechanical systems.
It does not know which buildings are vacant. It screens the commercial stock of a submarket with 30.8% office vacancy; it does not assert that any specific building is empty.
Story count is derived from LiDAR height ÷ floor-to-floor, not read from plans.
It does not model the statute’s prioritization of Opportunity Zones and economically distressed areas, nor San José’s own pre-2021 and non-Class-A eligibility conditions.
HUD has not published an award formula, so every per-project grant here is modeled rather than known.
A high score means worth a professional feasibility study — never “convertible.”

Questions

Can empty office buildings in downtown San José be converted into housing?

Some can. Of 99 commercial buildings at least 60 feet tall in Downtown San José, this model finds 19 whose conversion pencils with no subsidy at all, and 18 more — 2,452 homes — that pencil only with a RESIDE Act grant. The remaining 62 do not pencil at default assumptions, almost always because the floor plate is too deep for apartments rather than because the money is short.

Why do most office-to-residential conversions fail?

Floor-plate geometry, not financing. Apartments need light and air, and building codes limit how far a habitable room can sit from a window — roughly 25 to 35 feet. Office floors were built deep on purpose, so the middle of the plate is windowless core that can never legally become a bedroom. In this survey the median building has 74% of its floor area within daylight reach and a deepest interior point 66 feet from the nearest window. 32 of the 99 buildings are past the 80-foot threshold where conversion requires carving a light well, at which point it effectively never pencils. No subsidy fixes bad geometry.

What is the RESIDE Act and is it law?

The RESIDE Act — Revitalizing Empty Structures Into Desirable Environments — was introduced as H.R. 5591 in the 119th Congress and enacted as Section 210 of the 21st Century ROAD to Housing Act, signed into law on July 11, 2026. It directs HUD to run a Blighted Building to Housing Conversion Program making competitive grants to convert vacant commercial and industrial buildings into affordable housing, with priority for Opportunity Zones and economically distressed areas.

How much money does the RESIDE Act actually provide?

Less reliably than the headline suggests. The program has no dedicated appropriation. HUD may use up to $100 million of the amount by which annual HOME Investment Partnerships appropriations exceed $1.35 billion, in each of fiscal years 2027 through 2031. In any year Congress funds HOME at or below $1.35 billion, the program receives nothing. Individual competitive awards are capped at $10 million.

Who applies for a RESIDE Act grant — the developer or the city?

The city. Eligible applicants are states and localities that are eligible HOME grantees, not private developers or building owners. That makes this tool a municipal grant-application worksheet rather than a developer's pro-forma: it estimates what San José could credibly ask HUD for, and which buildings would justify the ask.

How many homes could office conversions add in downtown San José?

This model estimates 2,452 homes across the 18 buildings that pencil only with a RESIDE grant, and 7,350 homes across all 45 buildings it rates strong candidates. For comparison, San José city staff reviewing the same downtown stock in February 2026 identified roughly 1,500 homes of potentially viable conversion projects and projected 611 would actually be built. San José's state housing obligation for 2023–2031 is 62,200 homes.

What incentives does San José already offer for office-to-housing conversion?

In February 2026 the City Council extended its downtown high-rise incentive program to conversion projects creating at least 20 homes. The first 500 homes receive a full waiver of construction taxes, elimination of inclusionary housing fees, and a 50% reduction in parkland in-lieu fees; a second phase covering another 1,000 homes halves construction taxes and cuts park fees 30%. Projects must sit in the Downtown Planned Growth Area, occupy a building constructed before 2021 that is not Class A office space, and pull a building permit by the end of 2026. Staff estimated the package would waive about $16 million in fees and taxes.

Does this tool know which buildings are actually vacant?

No, and that limit matters. It screens the commercial building stock of a submarket whose office vacancy rate was 30.8% in the first quarter of 2026; it does not assert that any specific building is empty. Ownership, lease status, and tenancy are outside what public footprint and zoning data can show.

How accurate is this analysis?

It is a screen, not a feasibility study. The geometry is computed from real city footprints and LiDAR-derived heights, and the floor-plate math is validated against shapes with known analytic answers; computed floor areas agree with the city's own recorded areas to within 0.01%. But the model cannot see interior columns, existing cores, ceiling heights, post-tension slabs, or mechanical systems, and story counts are inferred from height rather than read from plans. A high score means a building is worth a professional feasibility study — never that it is convertible.

Can this analysis be run for other cities?

Only where the city publishes the right data. The model depends on open GIS building footprints carrying a LiDAR-derived height attribute, which is what makes story counts and floor-plate geometry computable without commercial real estate data. San José publishes both. Many cities publish footprints without heights, and for those this method does not work as written.

Cite or reuse this analysis

Everything on this page is free to quote, republish and build on, with credit. The scored dataset behind it is one download.

Suggested citation

RESIDE Act Feasibility Engine, “Office-to-Housing Conversion in Downtown San José,” resideact.org/san-jose, updated 2026-09-12.

Download the scored dataset (GeoJSON)Read the method

The text and dataset are licensed under CC BY 4.0: copy, adapt and republish them, commercially or not, with credit and a link back. Footprints, heights and zoning come from the City of San José, whose own terms still apply to that source data. See the terms of use.

Sources

Downtown San José's office vacancy rate was 30.8% in the first quarter of 2026. Cushman & Wakefield, reported by The Press Democrat, “Sky-high office vacancy levels haunt Bay Area's three major downtowns” — verified 2026-09-12.
In February 2026 the San José City Council extended its downtown high-rise incentive program to office-to-residential conversions of at least 20 homes. San José Spotlight, “San Jose boosts incentives to convert offices to housing” — verified 2026-09-12.
The program waives construction taxes and inclusionary housing fees for the first 500 converted homes, and city staff estimated roughly 1,500 homes of potentially viable conversion stock while projecting 611 homes would actually be built, at a cost of about $16M in waived fees. Propmodo, “San Jose Is Betting $16 Million in Fee Waivers Can Turn Empty Offices Into Apartments” — verified 2026-09-12.
The RESIDE Act is Section 210 of the 21st Century ROAD to Housing Act, which was signed into law on July 11, 2026. Bipartisan Policy Center, “Inside the Deal: What's in the Final 21st Century ROAD to Housing Act” — verified 2026-09-12.
HUD may use up to $100M of the amount by which annual HOME appropriations exceed $1.35B, in FY2027 through FY2031, to award competitive grants of up to $10M each to states and localities. Congressional Research Service, “ROAD to Housing Act of 2025 (R48732)” — verified 2026-09-12.
The RESIDE Act was introduced as H.R. 5591 in the 119th Congress. Congress.gov, “H.R.5591 — RESIDE Act” — verified 2026-09-12.
Google demolished roughly 80 acres of downtown San José for its Downtown West campus, then paused the project; the site remains largely vacant and the planned 7M sq ft of offices and about 4,000 homes have not been built. Planetizen, “Google Razed 80 Acres in Downtown San Jose. Then… Nothing Happened.” — verified 2026-09-12.
San José's Regional Housing Needs Allocation for the 2023–2031 cycle is 62,200 homes. San José Spotlight, “Staedler: San Jose's 62,200 housing unit question” — verified 2026-09-12.
Building footprints, LiDAR-derived heights and zoning come from the City of San José's open GIS service. City of San José, “DPW Basemap MapServer (layers 21 and 33)” — verified 2026-09-12.

The scored dataset behind this page is available as GeoJSON. Findings generated 2026-09-12 from City of San Jose GIS Open Data (DPW_BasemapServiceWGS layers 21/33).