"In recent years, the trend of converting office buildings into residential spaces as a solution to the affordable housing crisis has faced unexpected challenges due to a resurgence in commercial office demand. This shift has led to uncertainties for existing conversion projects and those in the planning stages. Despite the hurdles, there is potential for strategic conversions that could revitalize downtown areas and provide much-needed housing options."
"The rise in office leasing is impacting the feasibility of office-to-residential conversions, leading to financial difficulties for some projects, such as the 20 Broad Street conversion in Manhattan. While there is a growing number of planned conversions, the execution rate remains low due to various obstacles like zoning delays and financing issues. Transforming lower-quality office buildings into housing could unlock significant value in downtown areas, potentially revitalizing struggling urban centers and boosting economic activity."
A recent resurgence in commercial office demand has reduced the feasibility of many office-to-residential conversion projects aimed at addressing the affordable housing shortage. Several planned and underway conversions now face uncertainty, delayed execution, or financial distress, with examples including the 20 Broad Street conversion in Manhattan. Common obstacles include zoning delays, financing challenges, and lower execution rates despite strong planning activity. Strategic targeting of lower-quality office stock for conversion and policy reforms like New York City’s City of Yes could make conversions financially viable, unlock downtown value, and support urban revitalization while increasing housing supply.
Read at SFGATE
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