Denver Mayor Mike Johnston pledged to convert 4M SF of the city’s vacant office stock into affordable housing for middle-income residents during Monday night’s 2025 State of the City address.
Johnston largely used the speech to highlight his administration’s progress on public safety, housing and equity while also outlining several goals aimed at jump-starting downtown’s sluggish commercial real estate market.
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Johnston described the conversion effort as a key step in restoring vibrancy to the city’s core — but also a necessary one for public safety, as concerns and affordability gaps continue to affect both residents and business owners.
“We still have business owners on Broadway who don’t feel safe having staff members close up the shop and walk to their cars after work, and that’s not good enough,” Johnston said.
Bisnow reported in February that the city is expected to deliver 1,398 apartments via office conversions in 2025 — a 55% increase from last year. About 7M SF of office space in the city is vacant.
The mayor emphasized that all city decisions would be guided by four core principles: minimizing harm to residents and city workers, maintaining essential services, focusing resources on top priorities and protecting the most vulnerable Denverites.
That includes expanding access to stable housing — a theme that ran through much of the address.
Nearly half of Denver residents can’t afford to live in the city, Johnston said, noting the need to add approximately 5,000 units per year to keep pace with demand. He pointed to the city’s new middle-class housing program launched in partnership with the Denver Housing Authority as one path forward.
The initiative offers tax exemptions to developers who build rental units for households earning between $60K and $100K — a segment often left out of traditional affordable housing models.
“If we don’t make progress now, this challenge will be an existential threat to families, to business and to economic growth,” he said.
The office-to-residential push builds on the $570M downtown investment package approved by voters this past November. Johnston said that package, which required no new taxes, has already helped boost foot traffic, restaurant revenues and retail leasing interest — particularly along the long-renovated, newly rebranded 16th Street, which received more than 100,000 visitors at its grand reopening in May.
To support continued development, Johnston pointed to the city’s recently launched Denver Permitting Office, which pledges to process permits within 180 days or refund applicants up to $10K in fees — a move meant to cut red tape and accelerate housing production.
How Denver will pay for all of these initiatives was not clearly addressed, except for a planned 2025 municipal bond that Johnston said would fund core infrastructure projects.
The Mile High City faces a $200M fiscal deficit in 2026 and has changed the city’s layoff rules, reducing protections for long-tenured city employees and making it easier to fire them.
While the mayor acknowledged that downtown’s comeback is still in progress, he signaled the city’s commitment to converting empty space, attracting new tenants and investing in cultural infrastructure.
“We will launch ambitious efforts with the Downtown Development Authority to make public spaces and parks, childcare facilities and art activations to make them vibrant,” Johnston said.
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