New RESIDE Act Pilot Program Converts Blighted Malls and Factories into Affordable Housing Starting 2027

The new Revitalizing Empty Structures Into Desirable Environments Act, or the RESIDE Act, sets up a temporary grant program designed to tackle two major problems at once: urban blight and the affordable housing shortage. Starting in fiscal year 2027 and running through 2031, this Pilot Program will fund the conversion of massive, empty commercial and industrial spaces—think abandoned factories, dead malls, or old warehouses—into "Attainable Housing" for lower-income residents. Specifically, the housing created must be affordable for people making up to 80% of the local median income, tying the new units directly to existing affordability standards.

The Cash Conversion: How the Money Works

If you’re wondering where the money comes from, it’s a bit complicated. This new conversion program doesn't get its own dedicated budget. Instead, it acts like a bonus program tied to the existing HOME Investment Partnerships Program. The RESIDE Act only gets funded if the annual HOME program budget exceeds $1.35 billion. If that threshold is crossed, HUD can take up to $100 million of that excess money and use it for these conversion grants. This means the program’s funding is entirely dependent on the overall health and size of the HOME budget, making it unpredictable from year to year. When the funds are available, grants will range from a minimum of $1 million to a maximum of $10 million, which is serious money for a major renovation project.

Targeting the Worst Offenders

This isn't a program for just any vacant building. The bill defines a target property as a former commercial or industrial structure (like a warehouse or hotel) that an inspector has deemed unsafe, and where the owner has failed to make necessary repairs for at least 90 days after being notified. This specificity is meant to target truly blighted properties that are dragging down neighborhoods. When HUD reviews applications from cities or local housing authorities, they have to prioritize those that are working in economically struggling communities or those designated as qualified opportunity zones. They also give preference to applicants who have already done the legwork by passing local rules that cut the red tape for these conversion projects, which is a smart incentive for local governments to get their zoning in order.

From Factory Floor to Front Door

What can the grant money actually be spent on? Pretty much everything needed to turn a decaying structure into a home. This includes buying the property, tearing down non-essential parts, cleaning up environmental hazards (a big deal in old factories), site preparation, and the actual construction or renovation. The funds can also be used to establish or expand community land trusts, which are a great way to ensure the affordability of the land and housing lasts forever. For the people who eventually live in these converted units, the rules governing rent, resale, and income limits will be the same ones currently used for the HOME program, providing a clear framework for long-term affordability.

The Fine Print and the Flexibility

While the bill anchors the new housing to established HOME program rules, there is one clause that might raise an eyebrow: the Secretary of HUD has the power to waive or change existing rules or regulations for a specific grant if they publicly state there is a "good reason to do so." While this kind of flexibility can help complex projects get past bureaucratic hurdles, it also gives HUD significant discretionary power. We'll need to watch how that waiver power is used, as it could potentially be applied to requirements designed to protect affordability or quality. Ultimately, the RESIDE Act is a focused attempt to repurpose wasted space into needed homes, but its success hinges on consistent funding and careful application of its powerful new grant authority.