What Would It Take to Turn More Offices Into Housing?

In Chicago, Michael M. Edwards, who runs the Chicago Loop Alliance, a business organization, has been watching a halting return to downtown offices unfold. He started going back to his own office in the spring of 2020 and recalled biking down the street past boarded-up buildings and empty skyscrapers. When he took the train, he noticed the silence, the absence of all the suited-up businesspeople who used to commute alongside him.

Mr. Edwards is excited by a plan that the city has begun developing that would use office conversions to create 1,000 housing units, 30 percent of them affordable, along LaSalle Street, a major business thoroughfare. With more people living downtown, Mr. Edwards argues, more people could easily commute to downtown jobs.

He notes that this push to bring more housing downtown is part of a recent trend: Roughly 40,000 people live in the downtown Loop, up from just about 13,000 a decade ago. Apartments in the Loop are renting at higher rates than they were prepandemic, indicating that people are interested in living in that downtown bustle.

“You’re in the middle of everything,” said Mr. Edwards, who used to live in the Loop. “It’s a 10-minute walk to work, so all of a sudden you have two hours of commute time back.”

In New York, too, some real estate owners are calling more emphatically for conversations on housing conversion. They note that companies are increasingly looking for new offices with luxe amenities — Class A spaces — in what real estate firms are calling a “flight to quality.” That leaves millions of square feet in lower-class spaces, often constructed before the 1980s, that is likely to sit empty.

“Some of these buildings are going to become ghost buildings,” said Bill Rudin, whose family business owns and operates commercial and residential properties. “The marketplace is telling all of us we need to do something else that’s imaginative, out of the box, but has been proven to be successful.”

Lower Manhattan offers a model of the possibilities of turning a commercial neighborhood into a partly residential one. Facing financial difficulties in the early 1990s, New York State passed a tax abatement program, called 421-g, encouraging the conversion of old offices into housing. As a result, nearly 13 million square feet, or 13 percent of Lower Manhattan’s office real estate, was turned into residential space between 1995 and 2006.

Sumber: www.nytimes.com