Cities across the East Coast of the United States are examining the potential of converting vacated office buildings into apartments for people to live in. This is meant to address both the lack of availability of housing, as well as dealing with the large number of office buildings that now sit empty or minimally occupied. However, while office to apartment conversions may seem efficient on its face, there are a number of significant hurdles that will need to be overcome before these plans can be implemented.
What Are Office to Apartment Conversions?
Office to apartment conversions are essentially what they sound like: a type of renovation plan that takes office buildings and converts them into apartments. These plans typically involve extensive renovations to separate the building into usable units, installing necessary utilities like extra bathrooms and kitchens, and otherwise making whatever changes need to be made to ensure the building is livable. It also means ensuring the buildings are up to code for residential use.
Why Do Cities Want Office to Apartment Conversions?
Many cities, including New York and Philadelphia, are looking at office to apartment conversions as a way of addressing two problems at once: a lack of available housing, and large amounts of unused office space. The COVID-19 pandemic initiated a transition to work-from-home policies that remain in place to this day, leaving many companies with often costly commercial mortgages that they cannot use. By converting these unused office buildings to residential or mixed-use buildings, they can increase the amount of available housing without needing to build more buildings.
What is Getting in the Way of Office to Apartment Conversions?
There are two primary issues interfering with these office to apartment conversions. The first are zoning laws, which often prohibit these buildings from being used for residential purposes. Even if zoning laws can be changed, many office buildings are simply not built to handle the larger number of people that will be living in them if they are converted to apartments. This means they will need extensive renovations to ensure their plumbing and electrical systems will be able to withstand residential use.
How Could This Affect the Real Estate Market?
In the short term, these plans could help current holders of commercial real estate to more easily sell their properties to potential developers. It could also act as a way of efficiently reusing office space that is no longer needed. However, the primary benefits are likely to be seen by renters, who may have better access to housing if these plans go through.
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