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Adaptive Reuse of Commercial Buildings
Legalize Converting Commercial Buildings to Residential
This bill allows offices and other commercial buildings to be converted into housing through a simple, over-the-counter permitting process with no re-zoning required.
Adaptive Reuse of Commercial Buildings
About the bill
“This legislation will spur the conversion of vacant spaces that can stimulate local economies and begin to address the housing crisis in communities across the U.S.”
— Marc Selvitelli, President and CEO, NAIOP (now CREDA), on the federal Revitalizing Downtowns and Main Streets Act, March 2025
What this bill does
This bill gives property owners a clear path to turn underused commercial buildings into homes. Under the bill’s provisions, qualified buildings may convert from commercial to residential “by right.” This allows project proponents to proceed with the conversion application process with no rezoning, no conditional-use permits, and no political approval process.
Projects are reviewed using clear, objective standards; local governments cannot require new parking or apply rules written for new construction that do not fit the existing building.
Why it's needed
The pandemic accelerated remote work and left office buildings across the country sitting empty, while the housing shortage got worse. In most cities, converting vacant offices and retail into homes is needlessly difficult: outdated zoning rules, discretionary review, and rigid parking mandates make projects slow, expensive, or outright illegal.
Adaptive reuse allows building owners to convert existing commercial and office buildings into homes. The process is typically faster and cheaper than building new housing from scratch. It also produces less waste from demolition and allows new housing where people already want to live, close to jobs, schools, transit, and daily necessities.
Frequently asked questions
What does this bill actually do?
This bill lets local governments approve conversions of commercial buildings into housing quickly and cheaply, without the lengthy processes that make most projects impractical today. Here is what it requires:
- Any commercial building is eligible for conversion: offices, retail, formerly industrial, and institutional structures all qualify, regardless of age, condition, or prior use.
- No rezoning required. A qualifying project does not need a zoning change, conditional-use permit, variance, public hearing, or other discretionary land-use approval.
Uses clear approval standards. Local staff review the project against objective rules. A project that meets those rules must be approved. - Eliminates parking mandates. Allows builders and property owners to decide how much off-street parking they need.
- Fees are capped. In states that allow impact fees, application and impact fees cannot exceed what would be charged for a comparable new residential project.
- Works with the building that already exists. A conversion can’t be blocked because the existing building does not meet residential setback, height, density, landscaping, or open-space rules written for new construction.
- Local design standards are limited. Jurisdictions cannot use conversions to reduce unit count or kill a project’s finances.
- Preserves health and safety protections. Conversions must still comply with the building, fire, accessibility, structural, plumbing, electrical, and other codes that apply to alterations and changes in how a building is used.
Who stands to benefit?
Adaptive reuse puts housing in neighborhoods where we have already invested in roads, transit, schools, and services, making use of infrastructure that already exists rather than building new from scratch. That benefits anyone looking for a home in a well-located neighborhood, but especially working families, seniors, and people with disabilities who depend on accessible, transit-connected communities. Local governments benefit too: a converted building generates far more tax revenue than a vacant one, helping cities get a return on the infrastructure they have already paid for.
Why can't cities just fix this themselves?
Many want to, but lack the staffing and fiscal capacity to act quickly, especially when vacant properties are already draining tax revenue. Rather than taking power away from cities, this bill gets the ball rolling by setting a statewide baseline that cities can adapt to meet local needs. It also sets a standard for affordable housing requirements on adaptive reuse projects, so builders can better predict costs and cities don’t have to start from scratch.
Are there successful examples of office-to-housing conversions?
Office-to-housing conversions are happening across the country. In Los Angeles, Jamison Services converted an office building in Koreatown into495 apartment homes in 2025, and has since announced plans to convert the 400,000-square-foot World Trade Center office building into 512 affordable apartments. In Dallas, the 49-story Energy Plaza Tower became 293 apartments in 2024. In Cincinnati, over 1,300 units have been created from office conversions since 2000. And in Pittsburgh, a former department store that served as GNC’s global headquarters is now 253 apartments.
The Legislation
Full model legislation text
Clean version
Annotated
Section 1. Title.
This Act shall be known and may be cited as the “Adaptive Reuse Act.”
The purpose of this legislation is to increase the availability of safe, modern, and cost-effective elevators in multifamily residential buildings up to six (6) stories and twenty-four (24) dwellings.
Section 2. Purpose and Intent.
The purpose of this Act is to enable the conversion of underutilized nonresidential buildings into residential housing through adaptive reuse. This Act establishes a statewide, self-executing framework that reduces regulatory barriers and allows qualifying conversions without rezoning or discretionary land-use approval. It affirms the role of adaptive reuse in promoting infill housing development while maintaining health and safety standards.
Empty offices, vacant stores, old hotels, and other underused buildings can become homes. This section establishes a statewide path for converting existing nonresidential buildings into housing without requiring rezoning or discretionary land-use approval, while still requiring projects to meet health and safety standards. Hawaii Act 37 (2024), Arizona HB 2297 (2024), Texas SB 2477 (2025), and California AB 507 (2025) all use adaptive reuse to remove barriers to converting existing buildings into housing.
Section 3. Definitions.
For purposes of this Act:
(a) “Applicant” means a property owner or a person or entity authorized by the property owner to submit or process an application for an Adaptive Reuse Project.
(b) “Adaptive Reuse Project” means the conversion of all or a portion of an Eligible Building from a nonresidential use to a Residential Use or Mixed Use. The term includes alterations, partial demolition, additions, light wells, courtyards, stairs, elevators, utility improvements, rooftop structures, and other work reasonably necessary to complete the conversion.
(c) “Applicable Codes” means the state-adopted existing-building, building, residential, fire, electrical, plumbing, mechanical, energy, accessibility, and other construction codes and standards applicable to an Adaptive Reuse Project, including local amendments lawfully adopted under state law.
(d) “Complete Application” means an application containing the documents, plans, fees, and information expressly required by state law, this Act, and applicable adopted Objective Standards. An application containing those materials shall be deemed complete by operation of law. No Local Authority shall require additional materials unless expressly authorized by those laws or standards in advance.
(e) “Eligible Building” means an existing structure, or portion thereof, used or formerly used primarily for a commercial, retail, office, institutional, hotel, motel, industrial, parking, or other nonresidential use. A building shall not be disqualified because of its age, vacancy, condition, construction type, prior use, or status as a lawful nonconforming use or structure, provided that the Adaptive Reuse Project can comply with the Applicable Codes after completion. A building is not eligible where residential occupancy is prohibited by state or federal law.
(f) “Financial Preclusion” means the imposition of a requirement, alone or in combination with other requirements, that makes an Adaptive Reuse Project economically impracticable, as demonstrated by objective evidence that the project could not reasonably obtain financing or proceed under ordinary market conditions.
(g) “Floor Area Ratio” means the ratio of the Net Floor Area of all buildings included in the calculation to the total land area used for that calculation.
(h) “Generally Applicable” means a requirement that is not tailored to, triggered by, or imposed uniquely on an Adaptive Reuse Project and that is applied uniformly to comparable residential or mixed-use development.
(i) “Local Authority” means a city, county, city and county, municipality, township, village, parish, borough, or other political subdivision with authority over land use, building permits, or residential development. The term includes a chartered or home-rule jurisdiction.
(j) “Mixed Use” means a Residential Use combined with one or more nonresidential uses.
(k) “Net Floor Area” means the finished and heated floor area fully enclosed by the inside surface of walls, windows, doors, and partitions, and having a headroom of at least six and one-half feet, including working, living, eating, cooking, sleeping, hall, service, and storage areas, but excluding stairs, enclosed bicycle parking, garages, carports, parking spaces, cellars, half-stories, and unfinished attics and basements.
(l) “Objective Standard” means a zoning, design, subdivision, site-planning, historic-preservation, infrastructure, or similar standard that:
is uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable to the Applicant and Local Authority before submission of the application; and
does not depend on personal or subjective judgment by a public official.
(m) “Residential Use” includes dwelling units, dormitories, boarding houses, group housing, and other congregate residential uses. The term does not include a prison, jail, or detention facility.
(n) “State Code Body” means the state agency, board, department, commission, or other authority responsible for administering the state building or existing-building code.
(o) “State Housing Agency” means the state department, agency, or other authority designated to administer state housing and land-use laws.
Defines the buildings, projects, uses, standards, and government agencies covered by the Act. A broad range of commercial, retail, office, institutional, hotel, former-industrial, and parking structures can qualify, including vacant and lawfully nonconforming buildings. The definition also covers the alterations commonly needed to make conversions work, such as light wells, courtyards, stairs, elevators, rooftop structures, and utility improvements.
California AB 507 uses similarly broad definitions of adaptive reuse, residential uses, and mixed-use projects, while Hawaii Act 37 defines adaptive reuse as repurposing all or part of an existing building to create residential units. Los Angeles Ordinance No. 188,793 also recognizes that successful conversions may require light wells, courtyards, new floor levels, and other changes within an existing structure.
The definition of Net Floor Area is included here to distinguish between habitable space and non-habitable space, and is taken from California SB 1116.
Section 4. Statewide Application and Local Implementation
(a) This Act applies statewide to every Local Authority, including a chartered or home-rule jurisdiction, to the maximum extent permitted by the state constitution. The conversion of existing buildings to housing is a matter of statewide concern.
(b) Residential Use or Mixed Use shall be allowed by right in an Eligible Building through an Adaptive Reuse Project.
(c) Local Authorities shall not require any discretionary land use approval for any Adaptive Reuse Project, including but not limited to:
(1) rezoning;
(2) issuance of a conditional-use permit, planned-development approval, comprehensive-plan amendment or other variance;
(3) a public hearing; or
(4) design review.
(d) The rights established by this Act are self-executing. Failure by a Local Authority to adopt an ordinance, form, or procedure shall not delay or prevent an Applicant from exercising those rights.
(e) This Act pre-empts all ordinances, policies, standards, and practices of Local Authorities that conflict with this Act.
(f) Nothing in this Act shall prevent a Local Authority from adopting standards that provide greater flexibility or development capacity than this Act.
Residential and mixed uses are allowed by right in eligible buildings throughout the state. A city cannot require rezoning, a conditional-use permit, a variance, a planned-development process, a comprehensive-plan amendment, a public hearing, design review process, or another discretionary approval before allowing the conversion.
The right is self-executing, so a city cannot prevent projects from moving forward simply by failing to adopt an ordinance or application form. California makes qualifying adaptive reuse a use by right in all zones and applies to charter cities; Texas prohibits zoning changes, variances, special-use permits, comprehensive-plan amendments, and other discretionary approvals; and Arizona requires objective adaptive-reuse standards without rezoning or an approval requiring a public hearing.
Section 5. Ministerial Approval and Objective Standards.
(a) A Local Authority shall ministerially approve an Adaptive Reuse Project if the Complete Application complies with this Act and the Objective Standards that may lawfully be applied under this Section. No public hearing or discretionary review shall be required.
(b) A Local Authority may apply only Objective Standards adopted and in effect at the time the Complete Application is submitted. A Local Authority shall not require studies, information, or other materials that do not pertain directly to determining compliance with those Objective Standards.
(c) No Local Authority shall impose a requirement, fee, condition, or restriction on an Adaptive Reuse Project solely or partially because the project receives approval under this Act.
(d) Compliance with the Applicable Codes shall be determined through the building permit and other approvals ordinarily required after land-use approval of the Adaptive Reuse Project.
(e) An Adaptive Reuse Project shall be considered consistent with an Objective Standard if substantial evidence would allow a reasonable person to conclude that the project is consistent with the standard.
(f) A Local Authority shall not impose a development standard that requires alteration of the existing building envelope.
(g) No Local Authority shall deny or condition an Adaptive Reuse Project because the existing building does not comply with a residential density, Floor Area Ratio, height, setback, lot-coverage, open-space, landscaping, dwelling-unit-size, bedroom-mix, or other development standard. The existing height, setbacks, Floor Area Ratio, lot coverage, and location of an Eligible Building shall remain permitted. Conversion to Residential Use or Mixed Use shall not cause the building to lose its lawful or lawful-nonconforming status.
(h) A Local Authority may apply Objective Standards governing exterior alterations only if those standards are Generally Applicable and do not:
(1) require discretionary review;
(2) require alteration of a portion of the existing building not affected by the project;
(3) reduce the number of dwelling units proposed by the Applicant; or
(4) physically preclude or result in Financial Preclusion of the Adaptive Reuse Project.
(i) A Local Authority shall not impose or apply an Objective Standard if the standard, individually or cumulatively, would physically preclude the Adaptive Reuse Project as proposed by the Applicant or result in Financial Preclusion.
(j) A Local Authority shall not deny or condition an Adaptive Reuse Project on the ground that the Applicant could propose fewer dwelling units, smaller dwelling units, a different unit mix, reduced floor area, or a different building configuration. Compliance shall be determined based on the project as proposed, provided that it remains within the entitlements established by this Act.
(k) If a Local Authority denies an application or conditionally approves an application, it shall provide a written determination that:
(1) identifies each Objective Standard that the application does not satisfy;
(2) states the specific facts supporting each determination; and
(3) identifies each change necessary to bring the application into compliance.
(l) The written determination shall constitute an exhaustive list of deficiencies that could reasonably have been identified from the application.
The Local Authority bears the burden of demonstrating, by a preponderance of the evidence in the record, that each denial or conditional approval is authorized by this Act.
(m) Where this Act and another state or local law regulate the same development standard, the standard allowing greater residential development shall apply.
(n) A Local Authority shall process an Adaptive Reuse Project within the timelines otherwise applicable under state law to comparable ministerial residential development and shall not impose a longer review period solely because the project is approved under this Act.
(o) If a Local Authority does not, within 30 days, (1) approve a Complete Application, (2) issue a conditional approval, or (3) issue a denial, the application shall be deemed approved under this Act.
Once an adaptive reuse project complies with the Act and applicable objective standards, it must be approved ministerially. Local standards must be clear and knowable before the application is submitted and cannot depend on personal or subjective judgment.
California uses the same substantial-evidence and reasonable-person standard, prohibits local rules that require alteration of the existing building envelope, and limits review to objective planning standards. Texas similarly restricts local design, density, floor-area-ratio, site-coverage, zoning, and discretionary-approval requirements. Arizona also requires municipalities to use objective standards for qualifying conversions.
Section 6. Building-Code and Life-Safety Standards.
(a) An Adaptive Reuse Project shall be reviewed under the state-adopted existing-building code and other Applicable Codes governing alterations and changes of occupancy.
(b) An Eligible Building shall not be required to comply with a standard applicable exclusively to new construction unless the Applicable Codes expressly require that standard for the proposed alteration or change of occupancy.
(c) A Local Authority shall allow an alternative material, design, construction method, or performance-based compliance method where authorized by the Applicable Codes and demonstrated to provide an equivalent level of health, accessibility, structural, fire, and life-safety protection.
(d) Nothing in this Act waives an applicable structural, fire, accessibility, energy, plumbing, mechanical, electrical, or other health and safety requirement.
Existing buildings should be reviewed as existing buildings, not forced to satisfy every rule written for entirely new construction. This section requires adaptive reuse projects to use the state’s existing-building code and the other codes that apply to alterations and changes of occupancy.
Upgrades outside the proposed work may be required only when the applicable code is expressly required. Alternative materials, designs, and performance-based methods remain available when they provide an equivalent level of structural, fire, accessibility, and life-safety protection. Nothing in the section waives basic health and safety requirements.
Hawaii requires county adaptive-reuse ordinances to use International Building Code minimums for matters such as micro-unit size and interior conditions. California similarly protects the existing building envelope except where an alteration is required by an applicable building code.
Section 7. Parking.
(a) A Local Authority shall not impose a minimum automobile parking requirement on an Adaptive Reuse Project.
(b) Existing parking spaces may be retained, reduced, removed, converted to another use, or reconfigured at the Applicant’s election, subject to applicable accessibility, fire, and life-safety requirements.
(c) An Applicant may provide additional parking voluntarily.
Adaptive reuse projects cannot be required to provide a minimum number of automobile parking spaces. Existing parking can be retained, reduced, removed, reconfigured, or converted into housing or another use, and an applicant remains free to provide parking voluntarily.
Texas prohibits cities from requiring additional parking beyond the spaces already present at an office-conversion site. California provides that parking is not required for an existing building that has no onsite parking, while Hawaii requires counties to provide parking relief for qualifying adaptive-reuse projects. This model goes further by making clear that existing parking is not a mandatory floor and may be repurposed.
Section 8. Fees, Infrastructure, and Incentives.
(a) Administrative and review fees shall be limited to the actual cost of processing the application, supported by documentation, and shall not exceed comparable fees for similarly sized residential projects.
(b) A Local Authority shall not require an off-site improvement, infrastructure expansion, or utility upgrade unless the requirement is:
(1) Based on an Objective Standard;
(2) proportionate to a specific impact created by the Adaptive Reuse Project;
(3) imposed uniformly on comparable residential development; and
(4) no more burdensome than necessary to address the project’s impact.
(c) A Local Authority may offer incentives to support Adaptive Reuse Projects, including but not limited to:
(1) property tax abatements;
(2) permit fee waivers;
(3) expedited permitting;
(4) infrastructure cost sharing.
Application and review fees must reflect the government’s actual processing costs and cannot exceed fees for comparable residential projects. Impact fees, utility charges, and infrastructure assessments must account for the building’s prior use and can be based only on the project’s net increase in demand.
Section 9. Historic Preservation.
(a) An Adaptive Reuse Project involving a building on the National Register of Historic Places, on the [state historic resources list], or on the Local Authority’s historic resources list as of the time of the Complete Application remains subject to applicable federal and state historic-preservation law.
(b) A Local Authority may apply local historic preservation standards only to protected character-defining features and only to the extent those standards do not prohibit residential use, require restoration unrelated to the proposed work, or reduce the number of dwelling units that can otherwise be accommodated.
(c) Interior alterations shall not require historic-preservation review unless the interior feature is independently protected by applicable law.
(d) A Local Authority shall allow alternative materials, methods, and configurations where necessary to reconcile historic preservation with accessibility, fire, structural, and life-safety requirements.
Historic buildings can still be converted into housing. Local historic-preservation rules may protect formally designated character-defining features, but they cannot be used to prohibit residential use, require restoration unrelated to the project, or reduce the number of homes that can otherwise be accommodated. This sections limits the applicability of historic preservation rules to buildings deemed historic by a local, state or federal historic registry at the time of the completed application.
Los Angeles Ordinance No. 188,793 expands adaptive reuse citywide while retaining procedures for protected historic properties. California AB 507 likewise combines ministerial adaptive-reuse approval with a defined process for identifying and reviewing historic resources rather than allowing ordinary discretionary review to control the entire project.
Section 10. State Administration and Local Implementation.
(a) Each Local Authority shall, within six (6) months after the effective date of this Act, amend its ordinances, forms, and procedures as necessary to conform to this Act. Failure to complete those amendments does not delay or prevent an Applicant from exercising the rights established by this Act. If a Local Authority adopts an ordinance to come into compliance with this section, the following provisions shall apply:
(i) The Local Authority shall submit a copy of any ordinance enacted pursuant to this section to the State Housing Agency within 15 days of enactment.
(ii) The State Housing Agency shall, within 30 days, review the enacted ordinance, make a finding as to whether the enacted ordinance is in substantial compliance with this section, and report that finding to the local government.
(iii) If needed, the State Housing Agency may request an additional 30 days to make a finding as to whether the enacted ordinance is in substantial compliance with this section, and report that finding to the local government.
(iv) If the State Housing Agency does not provide written findings to the local government within the review period provided for in this paragraph, the ordinance shall be deemed compliant.
(v) If at any time the State Housing Agency determines that the ordinance does not comply with this section, the department shall notify the local government in writing, and enforcement of such ordinance shall be stayed. The Local Authority may (1) amend its ordinance to comply with this Act; or (2) enact the ordinance without changes, and include in its resolution adopting the ordinance that explain the reasons the local government believes that the ordinance complies with this section despite the findings of the State Housing Agency.
(b) Within ninety (90) days after enactment, the State Housing Agency, in consultation with the State Code Body, shall publish a model ordinance, standardized application materials, and technical guidance. Failure to publish those materials does not delay implementation of this Act.
(c) If a Local Authority fails to adopt development regulations as required by this Act by the applicable deadline, the model local ordinance published under Section 10 shall apply by operation of law. If the model local ordinance has not yet been published, all Middle Housing types identified under this Act shall be allowed on all Eligible Property subject to this Act without any local limitation inconsistent with this Act.
Local governments must update their zoning codes, forms, and procedures to comply with the Act, but applicants do not have to wait for those updates before using the law. The State Housing Agency and State Code Body must also provide a model ordinance, standardized materials, and technical guidance to make implementation easier and more consistent. Local governments that want to adopt alternative compliance plans may pass their own, but only with approval of the State Housing Agency.
Section 11. Enforcement
(a) An Applicant or the owner of an Eligible Building aggrieved by a violation of this Act may bring an action in a court of competent jurisdiction to enforce this Act. If the Applicant or owner prevails, the court shall:
(1) order the Local Authority to comply with this Act;
(2) order approval of an Adaptive Reuse Project that complies with this Act and the Objective Standards; and
(3) award reasonable attorney’s fees and costs.
(b) The State Housing Agency or Attorney General may investigate and enforce a pattern or practice of noncompliance, and may bring an action in a court of competent jurisdiction to enforce this Act. If the State Housing Agency or Attorney General prevails, the court shall:
(1) order the Local Authority to comply with this Act;
(2) award reasonable attorney’s fees and costs; and
(3) the court shall impose fines on the Local Authority, which shall be deposited into the [STATE HOUSING TRUST FUND]. Any fine levied pursuant to this paragraph shall be in a minimum amount of ten thousand dollars ($10,000) per housing unit per month after the filing of the Complete Application. If the court finds that the Local Authority (1) acted in bad faith when it disapproved or conditionally approved the Complete Application in violation of this section and (2) failed to carry out the court’s order or judgment within 30 days, the court, in addition to any other remedies provided by this section, shall multiply the fine by a factor of five. For purposes of this section, “bad faith” includes, but is not limited to, an action that is frivolous or otherwise entirely without merit.
Applicants and property owners can go to court when a city violates the Act. A court may order the city to comply, require approval of a qualifying project, and award attorney’s fees and costs to a successful applicant. The State Housing Agency or Attorney General may also intervene where a locality shows a broader pattern of noncompliance. Lawsuits filed by the State Housing Agency or the Attorney General, in addition to bringing suit, can secure fines from the city when a city violates the Act.
Texas SB 2477 provides a civil action for people and housing organizations harmed by a violation and requires attorney’s fees and court costs for a prevailing claimant. California AB 507 authorizes state housing enforcement and possible notice to the Attorney General when a locality violates the adaptive-reuse approval process.
Section 12. Severability.
If any provision of this Act is found to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be severable and the remaining provisions shall remain in full force and effect.
Lessons from other states
States have taken different approaches to adaptive reuse, but the momentum is clear. Arizona, Hawaii, Maryland, and Texas all passed adaptive reuse legislation in 2024 and 2025. California commissioned a study in 2023 and adopted statewide regulations in 2025.
The arguments that work vary by state. In Texas, legislators focused on the economic benefits of bringing life back to downtowns with high office vacancy. In Hawaii, advocates led with the environmental case: reusing existing buildings means less sprawl and less new infrastructure.
A 2025 study on Downtown Los Angeles found that converting just 10 buildings using the city's adaptive reuse program could generate $46 million in additional tax revenue and 17,000 new jobs, in addition to thousands of new homes.
Reports and further reading
- Downtown Los Angeles Office-to-Residential Adaptive Reuse Study, BAE Economics (2025)
- Tackling the Paradox of Underutilized Land in Small and Midsized City Downtowns, Brookings Institution (2024)
- Converting Obsolete Offices to Small Co-Living Apartments Could Help Ease U.S. Housing Shortage, The Pew Charitable Trusts and Gensler (2026)
- Converting Vacant Offices to Housing: Challenges and Opportunities, Bipartisan Policy Center (2024)
- Converting Vacant Office Space Into Housing, Center for American Progress (2024)
- Adaptive Reuse: Converting Offices to Multi-Residential Family, International Association of Plumbing and Mechanical Officials (2024)
Texas — enacted 2025
Texas passed Senate Bill 2477 in 2025, prohibiting cities and counties with more than 150,000 residents from blocking residential conversions through zoning changes, parking requirements, extra traffic studies, or density limits below 36 units per acre. Eligible projects get automatic approval, must meet International Building Code standards, and cannot be hit with arbitrary fees. Buildings built within the last five years, on industrial sites, or near military bases are excluded.
The bill's author, state Senator Paul Bettencourt (R-Houston), made the economic case: "Thriving downtowns and housing near jobs are essential for attracting and retaining talent, supporting small businesses, and sustaining local economies."
Texans for Fiscal Responsibility supported the bill, arguing it “reduces government overreach by limiting local micromanagement of private development, while still ensuring compliance with basic health and safety standards.”
Hawaii — enacted 2024
Hawaii passed two companion bills, House Bill 2090 and Senate Bill 2948, requiring counties to update local rules to allow commercial-to-residential conversions. The bills ban additional parking or park dedication requirements for conversion projects and allow small "micro units" of up to 220 square feet.
The legislation made the environmental argument explicit: adapting existing commercial buildings for housing preserves Hawaii's natural beauty and agricultural land by keeping new homes in already-developed areas rather than pushing growth onto undeveloped land.
Ted Kefalas of the Grassroot Institute of Hawaii testified in support: "Economically speaking, it makes sense to build more housing in urban areas because water and wastewater infrastructure is usually already present. It also is sometimes cheaper to convert a commercial building to housing than it is to start a structure from scratch. Research indicates that mixed-use buildings save people money on transportation and promote walking, which can lead to many health benefits."
Arizona — enacted 2024
Arizona passed House Bill 2297 in 2024 requiring cities with populations over 150,000 to allow commercial, office, and mixed-use buildings to be converted into housing without a public hearing, rezoning, or conditional use permit. This bill is a weaker bill because it limits the municipalities that can take advantage of the benefits of adaptive reuse.
Projects must set aside at least 10 percent of units for moderate- or low-income households and cannot be subject to additional parking requirements beyond existing zoning. The law was strengthened in 2025 after some cities tried to interpret it narrowly. The legislature amended the requirement from allowing "up to 10%" of commercial land for conversion to "at least 10%.”
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