Adaptive Reuse: Is Converting Empty Office Space to Housing Viable?
More than 20 percent of office space is vacant nationwide, according to global real estate services company Jones Lang LaSalle (JLL), with some cities spiking higher yet. San Francisco, for example, recently hit an office vacancy rate of nearly 32 percent. At the same time, the United States is experiencing a chronic housing shortage. These two realities have generated a widely popular idea: converting office space to residential units.
Is the solution really that simple?
Here, in part two of our story about low office building occupancy, architect Suzanne Lanyi Charles, associate professor of city and regional planning and of real estate in the College of Architecture, Art, and Planning (AAP), addresses the feasibility of converting office space to residential housing. In part one, faculty in the Cornell Peter and Stephanie Nolan School of Hotel Administration who are real estate experts looked at how the phenomenon impacts investors and developers: What Do Empty Office Buildings Mean for the Economy? All faculty interviewed for these stories teach in the Cornell Baker Program in Real Estate.
Charles, former acting chair of the Paul Rubacha Department of Real Estate, a multicollege department jointly managed between AAP and the Cornell SC Johnson College of Business, shares insights based on her firsthand experience. She worked on designing the adaptive reuse of several older office buildings in Chicago in the late 1990s and early 2000s, when she practiced architecture as vice president of Booth Hanson in Chicago. Projects she worked on included creating condominiums and student housing.
“There’s currently a lot of talk about converting office buildings to residential as a solution to our housing crisis,” says Charles. “In a nutshell, some office buildings are great for that. And some are not.”
Residential essentials: Light, ventilation, and the right floor plate
Key considerations for determining the suitability of office buildings for successful residential conversions are access to light and ventilation, says Charles, which is largely determined by the size and shape of a building’s floor plate (a floor plate refers to the entire floor of a building).
Office buildings built in the late 19th and early 20th centuries didn’t have air conditioning—or even electricity in some cases—“so they were designed with operable windows to take advantage of natural light and ventilation,” she explains. That makes them well-suited for residential conversion, she says.
The shape of the floor plate in those older buildings also makes them ideal for converting to residential, says Charles. “Some were designed like doughnuts, some like an L shape or a skinny bar about 60 feet wide. Those shapes allow for lots of exterior surface on the buildings—so lots of opportunities for light and ventilation,” she says.
Size also matters: “When a building’s floor plate is too deep, it makes for a very inefficient multifamily residential building,” says Charles. “For an apartment, about 26 feet deep from the entrance door hallway to the wall is ideal because US building codes specify that every habitable room has to have an operable window, natural light, and ventilation.” So office buildings that are 60 feet wide have an ideal floor plate to convert into multiple housing units.
She notes some caveats to that. “You can do some things in lofts, and you can have high ceilings. And other rooms, like closets, bathrooms, and sometimes kitchens, can have mechanical ventilation. But working within building code rules, a general rule of thumb is that you need a bay [the opening between two columns or walls] and a window for every habitable room. So if you have two bays on a building, you can get a one-bedroom in there—one for the living room, one for the bedroom. If you have three bays, one for the living room and two for bedrooms. If you have only one bay, it can only be a studio apartment.”
A wave of adaptive reuse
Grand old office buildings from the 19th and early 20th centuries became great candidates for redevelopment in the 1990s and 2000s. By then, many of those buildings had devolved into high-vacancy class C office buildings because the floor plates weren’t big enough for the spacious office layouts that big, high-paying firms began looking for.
That’s when Charles’s firm worked with a developer in Chicago to convert several old buildings to student housing for the Art Institute of Chicago. She also worked on converting the Palmolive Building—a 1929 art deco building designed by Holabird & Root—into what became, when completed, the highest-priced (per square foot) condominiums in Chicago.
Of course, even big cities like Chicago, New York, and Los Angeles have a limited supply of grand old buildings ideal for conversion. And office buildings built post-World War II range from challenging to not feasible for adaptive reuse as housing.
Unlikely conversion candidates: Sealed buildings with large floor plates
Most office buildings built in the 1970s and onward—the bulk of buildings in any large city—are not great candidates for converting to residential for the same reasons older buildings are ideal: size, ventilation, and light.
First, modern office buildings were designed for firms that wanted a wide-open feeling with lots of floor space—so their floor plates are often too big, says Charles. Another obstacle is that they were built without operable windows in order to accommodate HVAC system efficiency; in effect, buildings became hermetically sealed. “It’s difficult to impossible to convert them into residential units that meet US building codes requiring an operable window, natural light, and ventilation in every habitable room,” Charles says.
“Recently, I have seen some inventive architecture firms convert buildings with a large floor plate by making them into doughnut-shaped buildings,” Charles adds. “They demolish the center of the building and build in a courtyard to allow each unit to get closer to that narrowness that makes for an efficient building.” Drastic makeovers are expensive, however, and not feasible for buildings over a certain number of stories. “In addition to cost increases, at a certain point, a building is too tall for the center atrium to deliver light to the interior lower levels.”
Just how large is the stock of office buildings ripe for adaptive reuse as housing? Charles referred to a study (described in Fast Company magazine) by architect and structural engineer Charles F. Bloszies, who conducted an analysis of office buildings in San Francisco using public data from the city’s planning department. With this approach— which, as Charles points out, is adaptable to other cities—Bloszies identified 49 properties that met characteristics qualifying them as residential conversion candidates.
So the number of buildings eligible for conversion is limited, but some opportunities do exist.
Neighborhood amenities and zoning
Sometimes, adaptive reuse proposals fail to take into account what families need in the neighborhoods surrounding their homes—a grocery store, hardware stores, and childcare, for example. In other words, amenities most office building districts don’t have.
Zoning is another obstacle. “Adaptive reuse is possible in some instances, but not in others,” says Crocker H. Liu, Robert A. Beck Professor of Hospitality Financial Management in the Cornell Peter and Stephanie Nolan School of Hotel Administration. “One thing that holds us back is zoning. You cannot turn an office building into residential if it’s only zoned for office and the city refuses to rezone it residential.”
Not a housing crisis solution
Overall, converting office buildings to residential units might ameliorate the housing crisis a little bit, but it won’t solve it, says Charles. “The physical form of the building is really important as to whether it can be adaptively reused as residential, and the way we use an office building is very different from the way we use a residential building,” she says.