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Cities push to convert deserted office buildings into housing

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Cities and states across the country are looking to convert empty office buildings into housing. It’s the solution to both empty downtowns and housing shortages.

Important reasons: Commercial districts with little to no residential presence became nearby ghost towns during the pandemic, devastating streetscapes and damaging local businesses such as shops and restaurants.

  • However, it has fared better in areas where it is easier to live and work.
  • In addition, housing shortages continue in many parts of the United States.

What they say: Dan Garodnick, New York City’s Director of City Planning and Chairman of New City Planning, said: Adaptive Reuse Task Force By the end of the year, it is expected to recommend regulatory changes to facilitate the conversion of decommissioned office buildings.

  • Wendi Shafran, principal of FXCollaborative Architects and member of the NYC Task Force, says adaptive reuse of old office buildings has been around for decades, but the pandemic has sparked interest. says. of power).

Big picture: Despite the fact that many cities are still only half full of offices, this kind of conversion has yet to really pick up steam. They are expensive and a lot of bureaucracy and zoning laws usually get in the way.

  • But some big cities are creating new incentives in hopes of unleashing a wave of housing conversions over the next decade.

State of play: New York is not alone. Chicago last week proposed an initiative to convert vacant buildings in its downtown financial district into housing, offering tax credits and incentives along with financing tools.

  • Los Angeles City Council this fall ordinance update This provides financial incentives and broad eligibility for repurposing downtown office buildings.
  • california The 2023 budget allocates $400 million in incentive grants for office-to-residential conversion. Denver’s Provides funding to study the problem.Washington DC Mayor Muriel Bowser Threw A 20-year tax break associated with this type of conversion.

office building conversion It won’t solve the housing shortage alone, but it’s one of the many ways government officials want to use it to solve the problem.

By numbers: Real estate association REBNY Estimate A “conservative” conversion rate of 10% for low-rise office buildings in NYC could generate about 14,000 new residential units.

  • and LA Research by RAND Corporation In total, we identified underutilized commercial properties that could produce approximately 92,000 homes.

Line spacing: Adaptive reuse of existing buildings is also gaining popularity. Environmental benefitssays Roberto Vazquez, project director at LA-based architecture firm Omgivning.

What we see: The full extent of office building relocations is not yet clear, as office leases often span 10 to 20 years.

  • However, many rental office spaces are now at less than half their pre-pandemic daily occupancy rates. Shows swipe-in ​​data from Kastle covering 10 metropolitan areas.
  • Older, smaller buildings in need of upgrades are most likely to convert if vacancy rates rise further. These buildings are falling out of favor with businesses looking for a newer, more comfortable environment to attract their employees.

Playbook: Lower Manhattan and downtown Los Angeles made similar efforts in the early 2000s.

  • In New York City and State Alignments on Fiscal Incentives, and Regulation and Zoning Changes Targeting depressed financial districts after 9/11 be led directly around 25,000 houses Created from office buildings over the last few decades.
  • “It changed the character of the community…it really revitalized the neighborhood,” said Shafran, who previously worked in Lower Manhattan.
  • and in LA Original 1999 Adaptive Reuse Ordinance (The city’s current proposal is to expand on this) Made it easier for developers to convert downtown. Vazquez said it was groundbreaking for its time and a huge success.

To the point: Saying goodbye to busy office blocks and 9-to-5 busy streets is a process that has probably been decades in the making. This is part of the pandemic’s lasting impact on lifestyles and communities.

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