Lonely office buildings that were abandoned during the remote and hybrid work boom may find new life, which might make your future apartment better for the environment and more affordable.
Arpit Gupta, Candy Martinez, and Stijn Van Nieuwerburgh discovered that more than 2,000 office buildings in American downtowns may be turned into eco-friendly residential complexes in a new working paper for the National Bureau of Economic Research.
These conversions might result in up to 400,000 additional apartment units and, at the very least, more than 170,000 new apartments, which would be a huge benefit for cities that are struggling with a housing crisis and empty office towers.
According to the authors, 11% of office buildings in the commercial districts of the 105 largest US cities might be converted to houses.
These “zombie” structures, which are unrentable office buildings that lie unoccupied and just accrue costs, might be converted into 200-unit apartment complexes employing conversion procedures that would take less time than a new build.
The three main problems that office buildings currently face, according to the authors, would be addressed by these residential conversions: vacancies brought on by remote work, increased interest rates, and climate restrictions.
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Unleashing Potential
Due to the pandemic’s acceleration of the growth of remote work and the fact that many companies aren’t renewing their office leases, commercial buildings have significant vacancy rates. Increased interest rates make it more difficult for owners of commercial buildings to repay their mortgages.
Furthermore, current environmental rules mandate that buildings adhere to strict energy efficiency requirements, which may require exorbitant upgrades.
The housing supply in the US is severely constrained. The nation needs to construct between 3.8 million and 6.5 million additional dwellings to keep up with demand.
According to the study, the Greater New York City area has the greatest number of structures that meet the requirements for residential conversion. The runner-up metropolitan regions were Los Angeles and San Francisco. The cost of housing is among the highest in all three metropolitan regions.
The idea of converting office buildings into residences is not new, and New York City has, in principle, embraced it. But as Insider’s Jordan Hart has previously documented, zoning restrictions, opposition from the community, and hefty conversion expenses may make it challenging and expensive to convert structures.
However, the researchers concentrated particularly on underutilized downtown structures constructed prior to 1990 without strewing square footage throughout the floors. Older structures frequently feature smaller floor layouts, allowing more light to reach the interior without the need for a light shaft in the middle of the structure.
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Source: businessinsider
