The story at a glance
- The United States is facing a long-standing shortage of affordable housing and record office vacancy rates.
- Elected officials are pushing to speed up the conversion of commercial buildings to housing to address both issues.
- Regulatory and architectural challenges can make such a transformation complex and costly.
Officials across the U.S., from city hall to the White House, are pushing to convert commercial property into housing to solve two national problems: a growing need for housing and an increase in vacant office space.
The idea gained new interest when the COVID-19 pandemic suddenly forced millions of Americans to work from home, leaving office buildings empty.
Occupancy rates in commercial buildings have yet to recover since then, with office vacancy rates hitting a record high of nearly 20% in April. Moody’s Analytics.
At the same time, the U.S. has been short of affordable housing for years, and new home construction has slowed. Slowed down again this year.
Developers are turning to unused office space as a source of much-needed housing, but converting office buildings into apartments is not easy, and it can be costly, fraught with regulatory and architectural challenges.
“Depending on the situation, [where] “Incentives, building conditions and neighborhood conditions are all tied together, and they’re almost nonexistent,” says Mahesh Das, dean of Boston Architectural College.
Elected officials have tried to speed up the conversion of office buildings by providing assistance, funding and more flexibility in the rules and regulations that govern them.
Biden Administration The plan was announced It will accelerate the conversion of highly vacant commercial buildings into residential space in the second half of 2023 “through new financing, technical assistance and the sale of federal property.”
At the state level, Member of Parliament is suggesting Tax benefits Office Home renovation More affordable.
City officials, including New York City Mayor Eric Adams (D), have also proposed changing zoning laws to allow housing construction anywhere, to encourage the conversion of offices to apartments.
According to Jesus Vassallo, an associate professor of architecture at Rice University, context plays a big role in whether an office building can be converted into housing.
That’s because most office buildings are located in less attractive areas to live in, with limited access to schools, parks, and other things people typically want close to home.
There are also tricky city zoning laws to consider.
In New York City, most commercial districts containing office buildings also allow residential buildings to be built, but some areas of the city are governed by Euclidean zoning, which means zoning laws that allow only one type of building to be built in an area – commercial, industrial, residential, or retail.
“This puts an obstacle in the way of a return to more modern mixed-use districts in urban planning,” said Casey Berkowitz, a spokesman for the New York City Department of City Planning.
In some cases, site-specific zoning changes can make buildings eligible for renovations that wouldn’t have been eligible otherwise, Berkovitz said.
But such cases are limited, he added.
And once the question of what is permitted under city zoning laws is answered, builders will also be faced with the challenge of making office buildings habitable while complying with residential building codes.
The city’s building code includes natural light and ventilation requirements for homes, so many apartments are H-shaped or have courtyards.
Ensuring that your proposed new apartment has enough natural light and ventilation can be a big challenge.
For example, New York City building codes require all bedrooms to have windows with natural light, Berkovitz says.
This is much easier to achieve when constructing new rooms because pre-war buildings have narrow frames and shallow floor depths, says Florian Idenberg, professor of practice at Cornell University’s School of Architecture, Art and Planning.
On the other hand, office buildings built between the 1970s and 2000s, due to the widespread use of air conditioners and fluorescent lighting, tend to be tall, rectangular or square, deep, and with windows spaced far apart.
New York City building codes also require apartments to have windows that open for ventilation, a feature that high-rise office buildings typically lack.
Some designers have tried to solve both the problems of natural light and ventilation by expanding the perimeter of the building and removing the center, replacing it with an atrium-like open space.
But Eidenberg said removing the building’s core also means a significant loss of structural stability.
“It’s a puzzle that gets easier the older the tower is,” Eidenberg told The Hill.
With little natural light and poor ventilation, this could spell disaster for an apartment that was once commercial space.
Some residents of an apartment building in Albany, New York Kenmore For example, the former hotel building has no interior windows that can be opened, tenants told The Hill.
The building’s owners have tried to improve air circulation by creating ventilation corridors, but some residents are still enduring a strong smell inside the building, said a tenant who asked not to be named.
The Hill reached out to building management for information about Kenmore’s natural light and ventilation but did not receive a response.
Limited kitchen facilities, bathrooms and sometimes low ceilings also pose challenges for architects trying to convert offices into residential space, according to the Washington, D.C. Department of City Planning. Tax benefits For conversion of commercial property to residential.
Eidenberg said the office building’s plumbing system would typically be removed and replaced to ensure each future apartment unit has proper toilets, sinks and showers.
Real estate agents in the Washington, D.C., area told The Hill that office building interiors are often completely redone during the renovation process to meet energy and sustainability codes or to remove toxic materials like asbestos.
All this work adds up and can slow down the conversion process, adding unnecessary fees, according to a worker who asked not to be named.
A 2022 analysis puts the cost of converting an office into an apartment at around $100 to $200 per square foot. Moody’s AnalyticsThe company noted that costs are likely even higher now.
Das told The Hill that the cost of renovating an office building and converting it into apartments could be as much as $5,000 per square foot.
The more expensive it is to renovate a building, the higher the asking price for an apartment may be, potentially putting affordable housing out of reach for those who need it most, Daas said.
“This product is very expensive,” Berkowitz says. “In some cases, the cost approaches the cost of new construction.”
