The History of Rome – 551- Office Space

Intro

In this episode of “The History of Rome” podcast, the host discusses the concept of converting office buildings into housing as a solution to the housing problem in New York City and other big cities in North America. The episode explores the challenges and benefits of office to housing conversions, as well as the regulatory and financial considerations involved.

Main Takeaways

Converting Offices into Housing: A Solution to the Housing Problem

• Mayor of New York City is promoting converting office buildings into housing as a solution to the city’s housing problem.
• 18% of office space in Manhattan is vacant while over 100,000 people use the municipal shelter system.
• Office to housing conversions are a hot idea in many big cities in North America.
• Converting an office into housing solves the problem of empty office towers leading to lower property taxes, hurting city services, and killing life downtown.
• There are surprisingly few office to housing conversion projects underway, and many developers are hesitant to get involved.

The Challenges of Office to Housing Conversions

• Office buildings are not designed in the same way as apartment buildings, so developers have to redo the floor plan to accommodate residential needs.
• The floor plate, or the size of the area inside the walls of each story of the building, is a major challenge in office to apartment conversions.
• Reusing the foundation and concrete floors can save money, but most everything else in the building needs to be replaced.
• Post World War II, offices got upgrades like air conditioning and bigger floor plates, making conversions complicated due to lack of natural light.
• Converting a building from office to apartment triggers compliance with a different regulatory regime, making it difficult and complicated to do in a legal manner, especially in New York City where commercial buildings built after 1961 are not eligible for full conversion to housing.

Benefits and Potential Solutions

• Converting offices into housing doesn’t raise concerns around gentrification and neighborhood opposition that building new housing does.
• Office to apartment conversions may not solve the affordable housing crisis, but every new unit of housing is important.
• Developers would include affordable units if there were incentives or tax breaks from the government.
• Office to apartment conversions are a niche industry, but a good policy change that cities can encourage with tax breaks and new zoning rules.
• City brought in tax breaks and incentives in the past that led to many older office towers being converted into housing, changing neighborhoods and adding new residents.

Summary

Converting Offices into Housing: A Solution to the Housing Problem

The mayor of New York City and other city officials are advocating for the conversion of office buildings into housing as a solution to the housing problem. With a high vacancy rate in office space and a significant number of people relying on the municipal shelter system, converting offices into housing can address both the housing shortage and the issue of empty office towers. However, despite the potential benefits, there are currently few office to housing conversion projects underway, as developers are hesitant to get involved.

The Challenges of Office to Housing Conversions

Converting an office building into housing poses several challenges. Office buildings are not designed with the same layout and features as apartment buildings, requiring significant renovation work to accommodate residential needs. The size and layout of the floor plates in office buildings can be a major obstacle, as well as the need to replace most of the building’s components. Additionally, compliance with different regulatory regimes adds complexity to the conversion process, particularly in cities like New York where commercial buildings built after 1961 are not eligible for full conversion to housing.

Benefits and Potential Solutions

Despite the challenges, converting offices into housing offers several benefits. It avoids concerns around gentrification and neighborhood opposition that often arise with new housing developments. While it may not solve the affordable housing crisis entirely, every new unit of housing is important. Developers would be more inclined to include affordable units if there were incentives or tax breaks from the government. Encouraging office to apartment conversions through tax breaks and new zoning rules can help address the housing problem and revitalize neighborhoods, as seen in the past when tax breaks led to the conversion of older office towers and the transformation of Lower Manhattan into a residential neighborhood.

Conclusion

The conversion of office buildings into housing presents a potential solution to the housing problem in cities like New York. While there are challenges and complexities involved, such as the need for significant renovations and compliance with different regulatory regimes, the benefits of office to housing conversions cannot be ignored. By incentivizing developers and implementing supportive policies, cities can encourage the conversion of office buildings into much-needed housing units, contributing to the overall well-being and liveliness of urban areas.