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But that is also key to the problem: the cost to convert these buildings is already prohibitively expensive, and converting them into dormitories cannot possibl

• sharklazer 4y ago
  Even bigger, most of the buildings are highly leveraged. There literally is no incentive unless the mortgages can be restructured, as the ultimate prices will be forwarded to the renter. Everyone’s underwater a there isn’t a good solution without massive price decrease (crash) or commercial space demand re-invigorates.
  • JumpCrisscross 4y ago
    > most of the buildings are highly leveraged. There literally is no incentive unless the mortgages can be restructured, as the ultimate prices will be forwarded to the renter. This is what recessions are useful for. Underwater mortgages still need to be serviced. There might be a deal in providing assistance to the lender in exchange for financing conversion.
  • adam_arthur 4y ago
    It's called default and foreclosure, followed by liquidation by the lender. The mortgages will fail for most new office space, because the underwriting used unrealistic assumptions about rents.
• klooney 4y ago
  I mean, SF residential prices are still super high, it seems like it oughta pencil out.
  • metadaemon 4y ago
    I think flooding the market in new living spaces would decrease demand, leading to lower rent.
    • olyjohn 4y ago
      Sometimes it feels like the people who own these buildings would rather let them rot, than make less than premium top-dollar market value.
      • kyleee 4y ago
        yes, i think there must be tax and accounting strategies that allow buildings to remain vacant, really to the detriment of all except the owner(s)
• adam_arthur 4y ago
  It's not prohibitively expensive... office to residential conversions have already been done in many cases. Of course the specifics of the building matter a lot, but it's certainly cheaper than ground up net new development. And even if the conversion leads to abnormal units per modern standards, it will still get occupied at the right price. Seems a no brainer to rezone most office space to residential. Free market will figure it out. You can bet buying these commercial properties at firesale prices will open up a profitable path to residential
• mortenjorck 4y ago
  > converting them into dormitories cannot possibly recoup the cost Once we start talking easing housing code requirements, especially if it's done in the name of increasing access to housing, the conversation becomes about just how much conversion is really necessary, and how little can be done to break even. And there's a big continuum. If one end of this continuum is a standard college dorm setup, the other is literally just letting people camp out in an otherwise-unmodified office floor. In between are probably SRO-level accommodations, building four-wall cubicles with open ceilings for sunlight and ventilation (sometimes traditionally covered in chickenwire). As grim as this sounds, it might actually be preferable to the current practice of allowing tent cities to proliferate downtown. The idea of an office tower slum is incredibly dystopian, but if the alternative is the properties becoming write-offs, it may be the most likely outcome.
  • cycomanic 4y ago
    Why should anyone care about the rich owners of the office buildings having to write off their losses and instead make it easier to accommodate people like cattle. The only way they are going to recoup some of their costs is by charging significantly for the right to live in a windowless box. So it seems this scheme is much less about helping some poor homeless person and much more about some rich investor keeping some money.
    • ethbr0 4y ago
      In the event regulations are relaxed, I have absolutely zero problem haircutting the hell out of the formerly-commercial owners.
  • ethbr0 4y ago
    > The idea of an office tower slum is incredibly dystopian It's hard to get more contemporary cyberpunk than an organic community nesting in an ex-Facebook office building.
  • deleted 4y ago
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