Old Tampa Bay commercial buildings are being converted into apartments

Converting empty Tampa Bay buildings into apartments could provide more housing near urban cores, but reimagining the spaces isn't easy.

Why it matters: Tampa Bay is recovering better than most, but we're also experiencing one of the largest housing shortages in the country as our population continues to boom.

Driving the news: Downtown Tampa foot traffic is at 83.8% of pre-pandemic 2019 levels, Axios' Alex Fitzpatrick and Kavya Beheraj report.

What's happening: We're not getting any more land. Developers are eyeing underutilized commercial spaces to replace with much-needed housing.

Zoom in: St. Pete-based HP Capital Group secured the state's first project of this kind after the Live Local Act, co-founder Nick Hansen tells Axios. The act says cities must allow for multifamily housing in commercial, industrial or mixed zoning areas, so long as 40% of units are affordable.

• HP Capital Group bought the former Tibbetts Lumber yard in 2021 and plans to turn it into 264 affordable housing apartments that'll be available in summer 2025.
• "This one's a unicorn," Hansen says of the site, which is next to Gibbs High School, along a bus line and the Pinellas Trail, and less than a mile from a Walmart Supercenter.

The intrigue: Unlike many other post-pandemic downtowns, St. Pete has managed to maintain its vibrant core.

• Developers here are eyeing underused spaces on the outskirts of downtown for conversions, Hansen says.

It's all about the land. He expects to see more commercial spaces torn down to make room for housing.

• "It's going to happen; it has to. We need more space for people to live," he says.

Yes, but: These projects are near-impossible without tax incentives and local grants.

• When HP Capital Group proposed the project in 2021, their budget was $58 million. The estimated cost of construction materials since then has surged $19 million, pushing the budget to $82 million.
• "It barely makes sense for us to do this as it is," Hansen tells Axios. But local laws make 87% of the units tax-free, and they'll be able to get some money back on materials through tax reimbursement programs.

What we're watching: The trend is poised to grow as more cities roll out programs to incentivize conversion projects, according to Steven Paynter at Gensler, a global design and architecture firm.