For years, we’ve seen skyrocketing housing costs,
chronic, and tremendous home shortages in rental and buying markets – which were exacerbated by
the COVID-19 pandemic. Even though many cities have come out of pandemic economic
slumps and some businesses are returning to pre-pandemic norms - most urban areas still
face continual and worsening housing problems and commercial vacancies at the same time.
I live in Boston – this past winter, we saw a 17% increase in people experiencing homelessness and
similar levels of increased families staying in shelters and transitional housing. The
median home price in Boston is over a million dollars, the median rent is over $3,000 a month,
and – as I experienced while looking for a place to live this year – if
someone makes less than $50,000 a year, most landlord won’t even accept your application.
This problem is not specific to Boston. In a recent survey of mayors across all 50 US states,
over 70% say their cities need significantly more housing but there is a lack of affordable housing
for low and middle-income families. Additionally, they report a lack of funding and limited
availability of land to build more housing. In Canada, where I used to live, the Canada
Mortgage and Housing Corp estimates the country needs to add 3.5 million homes by 2030 to restore
affordability, which is unlikely to be achieved given the current political and economic climate.
While it’s true there isn’t nearly enough residential stock everywhere to meet demands, many
other buildings are actually sitting partially or mostly empty. According to data from JLL, office
vacancy in the US reached a record 20.1% in 2023. This equates to about one billion square feet of
vacant offices. That amount is so staggering it’s almost impossible to visualize. If it was
put in one office building with a 20,000 SF floor plate, it would be almost 20 times taller than
Mount Everest. These trends are expected to climb further due to hybrid work trends, more businesses
defaulting on their loans, and a third of all office leasing expiring by 2026. Construction of
new offices also slowed due to rising construction costs, continued supply chain shortages, and
low rates of real estate development fuelled by high-interest rates and volatility in the market.
All these offices sitting empty causes so many compounding problems. It leads to lower
retail traffic and public transit usage, which means businesses and governments lose revenue.
That results in lost jobs, lost tax revenue, lost city services, fewer community programs,
higher rates of crime, more mental health and drug addiction problems,
worsening pressure on healthcare systems, more deteriorating infrastructure, the list goes
on – all these lead to even emptier cities and then we’re in a vicious doom cycle. COVID didn’t
create these problems, they’ve been growing for many years – the pandemic just accelerated them.
Amid this huge crisis, I’m sure most of you are wondering – why aren’t we converting these
empty offices into residential housing?! Well, actually we are – but it’s certainly
not enough and it’s not happening at a rate that’s even close to what’s needed. A 2022
study found that if even 40% of unleased space in San Francisco converted to housing it would
create over 11,000 units. Here in historic downtown Boston, only 4% of properties are
residential. So why aren’t there more residential developments? There are so many complex and
compounding reasons. Not all buildings are physically suitable for residential use,
they might be in poor condition, they don’t have the right mechanical and electrical systems,
zoning, building code and other regulations may pose barriers, the building might not be in a
suitable location, and sometimes it’s just not feasible or practical to convert them.
♫ Intro ♫
Most modern office buildings have wide and deep floor-plates – usually more
than 25,000 SF/2,300 SM. I guess that’s like half football field for my American friends,
or for the Canadians – like one and a half hockey rinks? These are usually way too big
to accommodate residential units. They would lead to unusually narrow and inefficient layouts where
most spaces have no access to natural light. Some older office buildings, such as early 20th-century
skyscrapers may be more suitable for residential. Think of these private eye suites from film noir,
for example. However – sometimes the geometries of those buildings also don’t align with effective
residential space planning, structural columns could be in the way of proper interior wall
locations, some window spacing just doesn’t let you properly divide rooms and units. Finding
the right floor plate for a residential building is like Goldilocks – it needs to be just right.
Then there’s the trouble with building envelopes. Most commercial office
buildings don’t have windows that can open because their air supply and ventilation
are usually centrally controlled through a mechanical system. But some municipalities
require residential dwellings to have operable windows for fresh air. So you
would need to replace exterior windows and re-design the building’s air supply
and ventilation system. Very often, that’s just not practical. Again, in this case,
older commercial buildings usually have operable windows that are, once again, more suitable.
However, while some older buildings have suitable physical traits and charming historic character,
often they are not in great shape. You might need to replace all the windows
anyway because they don’t meet contemporary energy requirements. Most older buildings
also have leaky exterior assemblies that are incredibly energy inefficient,
so the entire building envelope might need to be bulked up or completely stripped and
rebuilt. If you’re working with a protected heritage building, you actually can’t tear
down the exterior facade. So the solution often is to build another exterior layer behind the
old facade – which dramatically reduces your floor plate, creating more inefficiencies.
Older buildings’ mechanical, electrical, and plumbing systems also often need major upgrades
or be completely replaced to meet contemporary living needs and current building and energy
codes. I work on a lot of retrofit projects – generally, electrical loads are maxed out even in
buildings from 30-40 years ago, and there’s often not enough fresh air supply or proper ventilation.
There are also other zoning and code-related challenges which vary from state to state,
and city to city. Zoning usually requires owners to apply for a “variance” when they’re changing
the use from what it was zoned for. These variances can be difficult to get and usually
add many months to a project schedule. Even when you get the variance approved,
there may still be code-related upgrades, restrictions, and approvals needed from
other city agencies. Unfortunately, some buildings just don’t meet certain requirements. For example,
many commercial buildings don’t meet planning code required open space minimums. In San Francisco,
the city requires 25% of units to have two bedrooms or more, which a lot of
buildings can’t accommodate. I know what you’re thinking – we just need to get rid of government
bureaucrats and their annoying red tape. Yes, it’s frustrating, but a lot of building codes
are there for our health, safety, and well-being and we can’t just throw it all out the window.
California especially has several required seismic (AKA earthquake-proofing) upgrades
that get triggered when converting from commercial to residential use.
So yeah, converting an office building to housing is way more than just throwing up some walls and
doors. It can take time and have a significant cost. Building owners and developers who pursue
this could be taking a huge risk. So, they need it to be worth the cost. The value generated from
these developments needs to be enough to make that money back. Unfortunately, even the most
luxurious residential units don’t generate the same revenue as commercial units of the same size.
This essentially means, that for most office-to-residential conversions to be
considered economically feasible, private developers will need government support,
like tax incentives, cash grants, credits and rebates, waived development fees,
zoning reforms, expedited processes, and probably all of the above.
And some cities are doing it. Back in 2021, Calgary was experiencing commercial vacancy
rates of 32%. They were already facing a vacancy crisis of 24% before the pandemic.
So they conducted comprehensive research and made a coordinated action plan. They
introduced a development incentive program that included an expedited planning approval process
and provided developers with up to $75 per square foot in grants.
In 2023, Boston announced the “Downtown Office to Residential Conversion Pilot
Program” that could reduce building owners’s residential tax rates by 75% for up to 29 years,
and provide additional tax reductions to those who take on office-to-residential
conversions. Mayor Michelle Wu indicated this program is to not
only add to the city’s housing stock but also to generate more 24/7 foot traffic
downtown. As I’m making this video only a couple of months after this announcement,
I don’t know if it’ll work yet. But if you’re watching in the future, I guess, let me know?
In 2020, architecture and design company Gensler developed a proprietary tool to evaluate factors
that contribute to a good residential building, like site context, building form, floor plates,
envelope, and servicing. Since then, they have studied over 900 buildings across North
America. Unfortunately, the studies show only 20-30% of commercial buildings are a good fit
for residential conversion. But some cities score better than others – of the 90 buildings studied
in Boston so far, 30%-40% warrant consideration for conversion. That alone totals 3-5 million
square feet. While it’s disappointing to learn that the majority of buildings are not suitable
for residential transformation, this tool actually shows us how there are a lot of places where it is
feasible. It helps to identify where we can make the biggest impact in revitalizing our cities,
and convince developers that they don’t need to tear down or build new to create opportunities.
After all, the most sustainable building is one that’s already built.
Studies have shown that adaptive reuse of existing buildings can cut a project’s embodied carbon by 80%.
Not having to build new buildings also reduces or eliminates other environmental impacts such as
smog creation, water and soil pollution, and other ecological disruptions. Yes,
converting office buildings to residential is no small feat, but it’s achievable and it offers
solutions to some of the biggest challenges we face today. The pandemic fundamentally changed
the way we live and work, and partially helped us realize that mono-zoned office districts,
which become crime-ridden ghost towns outside of 9-5, were bad ideas in the first place.
So I live in downtown Boston – of course,
I have a personal interest in improving the conditions of my surroundings. However,
even if you live outside of city centers or in suburban areas, this affects all of us. Downtown
buildings generate a disproportionate share of a city’s tax revenue – when city centers decline,
everyone is affected by funding cuts to social services, schools, and public infrastructure.
It’s easy for us to blame governments for not taking enough action, developers
for being only driven by profits, or architects for…
well in my experience we get blamed for everything but that’s not the point. If we all work together,
governments can initiate transformative programs and create job opportunities,
real estate developers can increase profits by diversifying their portfolios, allowing
the rest of us to create vibrant and diverse communities, and bring life back into our cities.
If you’re interested in learning more about Boston’s urban design,
or ever thought Boston feels a lot less like an American city, and more like a
European city – you might be onto something and should check out a video I made in collaboration
with my friends at Curious Muse. Thank you so much for watching, if you enjoyed this video,
feel free to subscribe, comment, or drop me a small tip in my Ko-Fi tip jar.
Bye for now.
*Snap!*
♫ Outro ♫