The New York state government has revealed that the Empire State Development (ESD) Board of Directors has voted to approve a significant office-to-housing conversion project at 5 Times Square in New York City.
This development will transform underused office space into a mixed-use complex, providing up to 1,250 new homes, including 313 permanently affordable units.
The project’s approval follows last year’s government action to amend 60-year-old state laws, removing the 12 Floor Area Ratio (FAR) cap that had hindered residential development in the city since 1961.
The 313 affordable homes are a direct result of the local governor’s Affordable Housing from Commercial Conversions Tax Incentive programme ($467m).
Since the legislative changes last April, approximately 10,000 new apartments have been completed or started construction through similar conversions in New York City.
The governor’s financial year 2026 budget further supports housing development, allocating $1bn to facilitate up to 120 million square feet of conversion space and the creation of up to 18,000 new homes.
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By GlobalDataThe amendment to the 42nd Street Development Project General Project Plan, approved by the ESD Board, will allow nearly one million square feet of office space at 5 Times Square to be repurposed, while preserving over 37,000ft² of retail space.
The new homes will consist of 1,050 studios and 200 one-bedroom units, with all residents having equal access to building amenities.
The project aims to address the building’s 77% office vacancy rate by creating valuable housing and is anticipated to begin in the third quarter of 2025.
The first phase is expected to be completed by 2027.
The building’s design supports a mixed-use approach, accommodating both residential and commercial uses.
The conversion is projected to generate approximately 1,400 construction jobs and 830 permanent jobs, adhering to State MWBE and SDVOB policies with a 30% MWBE participation goal.
Located between 41st and 42nd Streets on Seventh Avenue, the project is stated to benefit from transit connections, fostering sustainable urban living.
This initiative represents a significant step in addressing New York’s housing shortage. The original construction of 5 Times Square was at 33.35 FAR, nearly three times the previous residential cap.
The lifting of the FAR cap, combined with the tax incentives, makes it possible to convert high-density office properties into residential spaces, increasing affordable housing in central locations, the government stated.
New York governor Kathy Hochul said: “We took bold action to unlock major office-to-housing conversions in New York City, and transforming 5 Times Square from underused offices into 1,250 new homes – including over 300 permanently affordable apartments – is a prime example of how we’re getting it done.”
New York City deputy mayor for Housing, Economic Development, and Workforce Adolfo Carrión Jr said: “5 Times Square is a game-changer for Times Square and Midtown, paving the way for the future of urban growth. By converting underutilised office space into over a thousand new homes, including hundreds of affordable units, we’re reimagining central business districts as vibrant, mixed-use communities that foster both residential life and economic opportunity.”
