There’s been a lot of chatter lately about turning empty offices into living spaces — and I’m not talking about bringing your sleeping bag to work a la X (formerly known as Twitter.)
The buzz is about converting vacant — or nearly vacant — commercial buildings, like office highrises, into residential apartments. The idea is to kill two birds with one stone: Remote work has left a lot of property owners with a lot of empty office space (and a lot of bills to pay) and the housing market is suffering from an acute lack of available homes. Why not marry the two and see what comes out of it?
Last month, the mayor of New York City, Eric Adams, outlined a proposal that would make office-to-housing conversions easier by facilitating expedited construction approvals and zoning changes. The program would create more residential space, including single-family homes, supportive housing and dorms.
The Big Apple isn’t the only city eyeing this type of retrofit: San Francisco, Chicago and a few other major cities already have similar proposals for expediting the conversion of their own commercial buildings into residential units.
There are lots of potential benefits to these programs, Jeffrey Havsy, commercial real estate industry practice lead at Moody’s Analytics, tells me. First and foremost, it would add much-needed housing inventory to local markets. It could also help revitalize neighborhoods that, in the absence of office workers, are in danger of falling into disrepair. With more people living in an area, more retail businesses like supermarkets, restaurants and shops will likely follow.
“All of a sudden, [an] area that might have been on its way to being blighted because no one is going into that office anymore. . . starts to thrive,” he says.
Repurposing old office buildings makes sense from an environmental perspective, too, Havsy adds. Manufacturing new concrete is expensive, and creates a significant amount of gasses like carbon dioxide, which contributes to climate change.
Of course, there are some obstacles.
The first is cost. Any developer who undertakes a project like this will want to make sure it’s a profitable endeavor, so most of the homes built under these initiatives will likely be luxury apartments, not affordable housing. Another barrier is the fact that not every former office building has a suitable footprint for this kind of retrofit — think of the challenge, for instance, of turning an office floor with one giant communal bathroom into individual units, each outfitted with their own plumbing systems.
“The math makes it challenging,” Havsy tells me.
The upshot? The benefits of creating new homes from old buildings, especially ones in big, expensive cities like Manhattan with nothing but a bunch of empty cubicles inhabiting them, make this a worthwhile effort. But we shouldn’t expect it to solve the housing affordability crisis overnight.
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