Reg­u­la­to­ry and finan­cial bar­ri­ers have pre­vent­ed devel­op­ers seek­ing to take advan­tage of the fed­er­al gov­ern­men­t’s office-to-res­i­den­tial con­ver­sion incen­tive pro­gram from clos­ing on any loans, reports Kris­ton Capps in Bloomberg City­Lab. The funds are being direct­ed to office-to-hous­ing projects near tran­sit and fund­ed via the U.S. Depart­ment of Trans­porta­tion.

Accord­ing to Capps, “Lengthy approvals, strict envi­ron­men­tal reviews and tight cred­it cri­te­ria — stan­dards designed with inter­state rail projects in mind — have put this financ­ing out of reach for many devel­op­ers.” Although no loans have closed, three projects are cur­rent­ly in an under­writ­ing phase.

The pro­gram requires a $1 mil­lion non-refund­able deposit and a cost­ly Nation­al Envi­ron­men­tal Pol­i­cy Act (NEPA) review, which devel­op­ers argue is unnec­es­sary for a build­ing con­ver­sion. In some cas­es, projects that are locat­ed near cer­tain types of tran­sit don’t qual­i­fy under fed­er­al guide­lines.