Can converting offices to housing save downtowns?

Underused office buildings could revitalize dying downtowns as housing.

An estimated 24% of US office buildings will be vacant by 2026 as employees continue to work from home, cutting commercial property values by up to $250B.

The interior of a luxury apartment.

Pearl House, designed by Gensler. Courtesy: Williams New York

But shrinking downtowns predate covid. In 2019, architecture firm Gensler had already developed an algorithm to determine which underused office buildings could become residences, largely eyeing cities where a major industry had left — e.g., the auto industry in Detroit, or Calgary’s oil industry.

How it works

Steven Paynter, Gensler’s global building transformation & adaptive reuse leader, told The Hustle that the algorithm quickly breaks down a building’s data, then compares it to a “Goldilocks” building — “a perfect residential building in that same neighborhood” — to determine if it’ll work.

What makes a building a good fit?

Paynter said they’re most often approached with “Class B” buildings — they’re neither high quality nor cheap, and thus will never bounce back.

But the biggest issue is the distance between the elevators and the windows. Ideally, it’s ~35 feet, allowing for 30-foot-deep units.

But not every building needs to work:

  • The US office vacancy rate is currently 20%.
  • While 30%-35% of office buildings can be converted, just 10% would alter demand to make remaining offices more viable, per Gensler.
  • In Calgary, five office-residential conversion projects are creating 1.2k+ new housing units and office vacancy rates are trending down.

Why it’s beneficial

Office buildings and their open floor plans offer developers flexibility, and can accommodate ground-floor businesses. Grouped together, that creates a desirable neighborhood.

Also, buildings aren’t torn down, meaning:

  • Communities usually don’t push back, unlike with new construction.
  • Conversions retain ~90% of existing concrete. Concrete accounts for 8% of global carbon emissions, 4x that of the airline industry, so retaining it is a massive boon to sustainability.

Can this fix the housing crisis?

Well, maybe — if developers receive incentives from local or federal governments to create affordable housing; a lack of such funding is largely why only 5% of the possible conversions Gensler has identified are underway.

The White House does have a 54-page guidebook to such funding, if you’re interested in some light bedtime reading.

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