Could Empty Office Spaces Be the Solution to Housing Shortages? – Journal

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In many office buildings across North America, the much-anticipated return to in-person work has not materialized exactly as hoped. Nearly a full year since most work-related pandemic restrictions have been lifted, the commercial real estate sector is still struggling to fill empty office floors. In 2022, the office vacancy rate in the United States was hovering at 12.3 percent, up from 9.6 percent in 2019, and nearing the 13 percent high reached in the aftermath of the Great Recession. And in some cities hit that have been hit particularly hard —San Francisco, New York and Seattle, to name a few — sky-high vacancy rates could hollow out buildings completely, threatening to turn business district city blocks into ghost towns.

Though these recent trends are certainly a cause for worry, architects are seeing in these vacant office spaces a potential solution to another problem facing cities: housing shortages. According to the nonprofit research group Up For Growth, the United States is 3.8 million homes short of meeting its current housing needs. In cities like San Francisco, this translates to a shortage of over 110 000 housing units, leading to skyrocketing home prices and rents. The need for more housing is clear, but building from scratch can be an expensive, long and complicated process. Would it be possible, as some firms are asking, to convert commercial office space into residential space?

This type of conversion could offer solutions to many city problems. Otherwise, empty office buildings would find new, permanent occupants and hence a new form of revenue for both commercial owners and municipalities. Meanwhile, cities would benefit from a quick influx of new, advantageously located housing without the lengthy and costly process of destroying existing buildings and constructing anew. And an increase in residents in commercial districts could serve as a catalyst for struggling downtowns, giving a greater reason for investment in parks, community services and public transportation in those areas.

One intriguing case study for these ideas is Calgary, where a mix of economic downturn and the pandemic-induced shift to remote work has led to an exodus of workers from the office. The downtown office vacancy rate reached 32% in 2021, up from 24% a year earlier — an equivalent to 12 million square-feet of vacant office space. Of these unoccupied office floors, a disproportionate number are found in aging buildings from the late 1960s and 1970s. These buildings are usually labelled Class B or Class C, and are less amenity rich than Class A offices and less likely to attract new tenants. Save a miraculous reversal in the city’s fortunes, Calgary risks finding itself with a slew of old, largely unused office spaces that will likely drift into neglect.