Residential development, conversions and the future of housing - by Joseph Aquino

I attended a Residential Development Forum in Manhattan last week and left with a renewed appreciation for the resilience and creativity of the residential real estate industry. While the headlines often focus on interest rates, construction costs, and affordability challenges, the people actively developing housing continue to find ways to adapt and move projects forward.

The keynote was delivered by Miki Naftali, one of New York’s most successful residential developers. His comments reinforced something I have witnessed throughout my forty years in real estate: quality always finds a market. Regardless of economic cycles, consumers continue to seek well-located properties, superior design, and projects that offer long-term value.

One of the most important topics discussed throughout the morning was the continued evolution of office-to-residential conversions. With portions of the office market still adjusting to new workplace realities, developers increasingly view underutilized office buildings as potential residential opportunities. While not every office building can be successfully converted, many owners are exploring creative ways to reposition older assets and bring new housing inventory into the marketplace.

The housing shortage remains one of the industry’s greatest challenges. New York, like many major cities, continues to face significant demand for both market-rate and affordable housing. Developers, municipalities, and public agencies are all searching for solutions that will encourage new construction while maintaining economic feasibility.

Another recurring theme was the importance of transit-oriented development. Housing located near major transportation hubs continues to command strong demand because residents increasingly value convenience and accessibility. As cities grow and commuting patterns evolve, proximity to transportation infrastructure remains one of the most powerful drivers of residential value.

The conversation frequently shifted to the competitive differences between New York and other growth markets throughout the country. Florida, in particular, continues to attract both capital and population. Developers cited shorter approval periods, lower regulatory burdens, and favorable tax structures as factors contributing to the state’s ongoing growth. While New York remains one of the most desirable real estate markets in the world, many industry professionals believe the city must continue finding ways to accelerate housing production if it hopes to remain competitive.

Mixed-use development also received considerable attention. The modern consumer increasingly wants the ability to live, work, shop, dine, and socialize within the same neighborhood. Successful projects are no longer viewed as standalone buildings but rather as components of larger communities that enhance the surrounding environment.

One statistic that stood out during the discussions was the lengthy timeline often required to bring residential projects from conception to completion. Between zoning approvals, environmental reviews, financing, permitting, and construction, major developments can take years before residents move in. In today’s market, time has become one of the most valuable commodities in real estate.

Despite these challenges, the overall mood of the conference was optimistic. The residential sector continues to demonstrate remarkable strength, driven by fundamental demand for housing. Developers are embracing adaptive reuse, exploring innovative financing structures, and creating projects that respond to changing consumer preferences.

After spending decades in commercial real estate, I found many parallels between today’s residential market and previous cycles I have experienced throughout my career. Markets evolve, consumer preferences change, and economic conditions fluctuate. Yet opportunities consistently emerge for those willing to adapt, innovate, and think long-term.

My biggest takeaway from the forum was simple: housing remains one of the most essential products in our economy. Whether through luxury development, affordable housing initiatives, mixed-use projects, or office conversions, the industry continues searching for solutions to meet growing demand. While obstacles remain, the determination and creativity displayed by today’s developers suggest that the future of residential real estate remains bright.

As our cities continue to evolve, residential development will play a critical role in shaping how future generations live, work, and interact. For investors, developers, lenders, brokers, and public officials alike, the message was clear: the need for housing is not going away, and the opportunities ahead remain substantial. 

I don’t believe a tax break for property owners alone will be sufficient to address the economic hardship, since tenants rarely see those savings passed through in the form of lower rents.

Maybe the only solution to affordable housing is rent subsidies paid directly to tenants by the government. Since we live in a capitalist country, there are no contractors or builders willing to discount their services, nor are property owners willing to reduce the value of their land.

Joseph Aquino is president of JAACRES, Manhattan, N.Y.