New York City has an abundance of empty office buildings and a shortage of affordable housing options. The fix? Turn those ghost-town workplaces into apartments people can afford. It’s a creative idea that sounds simple—but making it work is a whole different story. Let’s dive into how NYC is trying to turn old office space into new beginnings.

Why are buildings empty?

Since the pandemic in 2020, more companies have offered remote work options or have switched to remote work entirely. In July 2023, Boston's planning and development agency announced a pilot program to provide incentives to building developers who convert office buildings into residential housing. Could New York implement a program similar to Boston’s?

Could they be converted into affordable housing?

What would even need to be considered for New York to convert vacant office buildings into residential housing? Zoning codes, real estate values, and structural issues are among the key factors that need to be taken into consideration.

What it would take

Redefining space:

Residential and commercial buildings' electricity needs-

Residential - Kitchen appliances that require lots of power.

Commercial - Use more computers, projectors, and copy machines.

Both - The electrical load is likely the same.

Lighting-

Both residential and commercial buildings have similar power needs. Since the U.S. code requires that all residents have ready access to the circuit breakers or fuses supplying their unit, remodelers would need to add a subpanel to each residential unit to address this issue.

Fire alarms-

Building owners would need to add more alarms, one for each place of residence.

Telecommunications revisions-

They might also need to revise the internet, telephone, and cable systems, as well as make sure each tenant has access to these services.

The biggest hurdles would be adding the subpanels and metering to figure out how much power each unit uses.

Heating, ventilation, and air conditioning:

Building developers would need to have separate HVAC systems and controls for each unit.

Mid-rise and high-rise apartment buildings often utilize a centralized HVAC system with variable air volume units in each zone. Smaller apartments typically consist of a single zone, while larger apartments may require multiple zones.

Residential buildings typically have a smaller HVAC load than office buildings. The existing HVAC system would be larger than needed for residential reuse. Oversized air conditioning systems often have humidity problems.

The building's ductwork would also need to be remodeled.

Plumbing and fire protection:

Plumbing in office buildings:

The plumbing is centralized, and the bathrooms are grouped and located in the same spot on each floor.

Plumbing is for residential buildings:

The plumbing is distributed throughout the building; each unit has its own bathroom and kitchen, and each unit requires both drinking water and a sanitary sewer.

The biggest issue is the size of the pipes serving the building and its interior plumbing system. Service sizes for water and sewer in an office building may not be big enough for residential use. Pipes for a sewer utility connection would need to be larger for an apartment building. Reworking the sanitary sewer system would be difficult, especially on upper floors.

Fire sprinkler systems would also need to be revised when walls go up during the remodeling phase.

New life for vacant buildings:

Vacant buildings can negatively impact the surrounding real estate values. This process is possible, but not a cheap one.

Good candidates for this process:

-Buildings due for a remodel or upgrade

-If the building's systems (HVAC, plumbing, electrical) are due for replacement, projects can become more cost-effective.

Who would live there-

Students, young professionals, retirees, veterans, individuals who have recently moved to the city, and service industry workers.

This isn’t ideal housing for families and isn’t solving every problem in housing.

The most undersupplied type of housing is affordable, smaller, well-located homes aimed at one or two-person households.

Reasons it’s so hard:

1. Bureaucracy and restrictive zoning:

Urban construction is governed by zoning laws, which follow a simple concept: only one type of building (such as factories, apartment buildings, or single-family homes) is permitted per town or community. For builders, overturning zoning laws, in addition to complying with dozens of building codes, can be a time-consuming and cost-prohibitive process.

Cities must consider the tax revenue implications, as a significant portion of revenue comes from commercial property taxes. Often, cities cannot afford to lose the tax revenue generated by large office buildings. An apartment building, even if it’s fully occupied, is a lower-density use than an office. Meaning fewer people on the street, fewer people at lunch spots, and for cities, less tax revenue.

2. Building design and structural hurdles:

Not enough bathrooms. Not enough windows. Or windows that don’t open at all.

Some estimates suggest that only 3% of New York City's office buildings are suitable for residential conversion.

The leasable square footage per floor for buildings built in the mid-20th century typically ranges from 5,000 to 15,000 square feet. Buildings constructed in recent years can range from 15,000 to 40,000 square feet.

The costs associated with making significant physical changes can range from $100 to over $500 per square foot, depending on the building's design and construction.

Overcoming design and structural hurdles-

Assessing building stability before undertaking conversions, such as retrofitting or demolishing parts of the building, can significantly impact the project's affordability.

Dorm/co-living design-

Would include private sleeping areas, communal kitchens, bathrooms, living rooms, and laundry facilities on each floor.

Co-living is a way to skirt around some hurdles. The construction cost of converting an office into a co-living design is 25% to 35% cheaper than converting it into traditional apartments. Developers can keep the plumbing and kitchens in the center of each floor. Each floor could accommodate about three times more units than a conventional apartment building.

3. Occupancy overhangs:

Many of these vacant buildings aren’t yet available for conversion. Tenants with long leases are still renting in even mostly empty buildings.

What do you do with the remaining tenants? Can you displace them? Do you have another building where you can move them?

What’s the deal with this so-called sublease space?

These buildings are either occupied but available for anyone who wants to take it off the tenant’s hands, or they’re vacant, but the tenant is paying the rent until the lease runs out.

Some office buildings remain vacant due to factors like the shift to hybrid work models and high vacancy rates. Others are actively repurposed or acquired by different types of buyers.

Who’s buying these buildings?

Wealthy families and smaller developers are increasingly buying up these buildings at discounted prices. They view them as potential investment opportunities.

From a real estate perspective, why do buildings sit vacant?

They are waiting for the possibility that something better will come along during the period of their lease. There is also option value, which includes the potential to tear down the building and either redevelop it or sell it to someone, who may use it or redevelop it themselves.

Potential solutions:

Zoning reform:

Relaxing restrictions to allow for more conversions and diverse housing types.

Financial incentives:

Expanding tax breaks and subsidies to encourage developers to create affordable units through conversions.

Streamlined approval processes:

Reducing hurdles and speeding up the approval process.

Innovative design:

Exploring creative solutions to address structural limitations.

Public-private partnerships:

Collaboration between developers and non-profit organizations to ensure a mix of market-rate and affordable units

Movements supporting the transformation of vacant office buildings:

Nonprofit organizations-

The Housing Partnership Network (HPN) is working to increase the supply of affordable housing through adaptive reuse projects. HPN’s adaptive reuse conversion accelerator program (ARCAP) helps member organizations acquire and convert various property types into affordable housing.

Industry groups-

The National Association of Home Builders (NAHB) has published an adaptive reuse guide to provide insights and examples for strengthening local economies and fostering vibrant downtowns through conversions. The American Planning Association and U.S. Green Building Council also support adaptive reuse as a way to create sustainable communities and increase housing affordability.

Turning empty offices into affordable housing won’t solve all of New York City’s housing problems—but it’s a smart step in the right direction. With the right mix of policy changes, funding, and imagination, yesterday’s cubicles could become tomorrow’s cozy homes. The city that never sleeps is constantly reinventing itself—and this time, it might just be building something more livable for everyone.

Workspaces to Living Places: Giving Empty Offices a Second Life