As we all know from our experience over the last few years, there has been a change in where we work and how we work. These changes have resulted in a rise in virtual meetings and an increase in the number of people working from home, either full-time or through a hybrid option. As a result, office space is no longer being fully utilized, leading to a decline in the current office occupancy rates compared to 2019. Is not clear when or if this trend will change as companies continue to evaluate their office space needs as leases expire and are renewed in the future.
In addition to the office vacancies, there is a housing shortage in the country that is estimated between 5.5 and 6.8 million homes. The housing shortage is a complex issue that has many different layers that affect different groups in distinct ways. However, with demand higher than the supply, the cost of housing for renters and home buyers has increased and is expected to increase in the future. This need for more housing is throughout the country and requires a combination of multifamily, single-family, and affordable housing options.
The easy solution for the two pressing issues is to transform under utilized commercial office space into much-needed housing. This approach not only provides relief for the housing crisis, but also helps mitigate the financial strain that vacant offices place on local governments. Historically, these spaces were only occupied during standard business hours on weekdays. By converting the buildings into multifamily residences, the buildings can now be inhabited around the clock. This increased demand for housing has the potential to rejuvenate neighborhoods and stimulate growth in service industries like restaurants and grocery stores.
These conversions can greatly contribute to sustainability efforts. When steel and concrete building framing materials are repurposed, there is a substantial decrease in carbon emissions as opposed to constructing a new residential building. The emission saving are due to not needing to create new concrete and steel, not needing to demolish the existing building and having the materials hauled away and a reduction in the dust associated with a demolishing a building. What’s more, renovations present a chance to enhance energy efficiency, by being able to increase the R values and install new energy-efficient mechanical systems. Opting to use existing buildings also expedites the project schedule versus the demolition and a new ground-up construction.
For all the positive reasons to move forward, there are significant challenges to these projects. All office conversions have the challenge of converting a space that had common bathrooms and maybe a kitchen for an office floor, into individual bathrooms and kitchens for each apartment. Coordinating the number of risers, ductwork openings and cores needed is a major undertaking for the design team. But not all office conversions are equal and each building presents its own unique challenges to the design team and the developer.
The design complexity of the projects depends on the era the original building was constructed. Buildings constructed in the late 19th and early 20th centuries are often ideal for conversion because they have high ceilings, plenty of windows, and were designed to allow light and air into almost every space. These features align well with modern building codes that require adequate light and air in residential buildings.
However, converting office buildings constructed from the mid-20th century on poses a bigger challenge. With the advancements of air conditioning and electricity, there was no longer a need for office workers to be near windows for light and air. As a result, modern office buildings have a large floorplate with a significant portion of floor space located far from windows. This creates an inefficient layout of the apartments and unusable portions of the floor due to the lack of light and air. The projects we have worked on have tried different solutions for the areas of the floor that could not be converted. Some have used this space as storage or common amenity space, and some have demolished the multiple bays and to create either internal “blind shafts” or internal lightwells to bring light to for the entire height of the building. In the projects with the “blind shafts” and lightwells, the square footage that was demolished, was matched with new floors added above the existing roof level. These projects required significant upgrades to the lateral and gravity systems with a substantial amount of time and analysis spent on reviewing the new loads imposed on the remaining original structural elements and designing the necessary structural reinforcing.
In addition to the structural challenges, local governments have their own concerns and limitations, primarily linked to current zoning laws, parking requirements, and traffic patterns that may change when converting the use of the building.
The final obstacle is the financial aspect of these conversions. The office building with low vacancy rates have lost value, but does that make it financially viable to spend money to convert the building from office to residential? Our current conversion projects in New York City will be rented at market rate, which may not be a viable option in other markets. Do local governments look into tax credits or other incentives to encourage owners to convert the building? Do local governments look into using public money if there is a need for affordable housing?
In my opinion, these projects are an excellent way to repurpose existing under utilized commercial office space. In order for more of these projects to go forward, we need building owners, local governments and design professionals to work together to solve the engineering, financial and social challenges associated with converting underutilized office buildings to functional residential buildings.■