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People said that before and it was true before - office space truly was more profitable - but now things have changed. Drastically. So things that would've bee

People said that before and it was true before - office space truly was more profitable - but now things have changed. Drastically. So things that would've been conventional wisdom for 100 years, that were true for each generation, have suddenly stopped being true. When people say 'no residential' I would say: what's your alternative? Office space - obviously failing, why we're having this discussion. Restaurant/coffeeshop/cafe space - nope, too much of it. Not viable. The only option left is residential. To be clear, if someone can come up with a better option in 2022 than residential, I'm happy to say I was wrong. But what it is? I just covered the possibilities. There's nothing else. There's only one thing that can happen, at this point: landlords can keep their spaces unrented. Or they can convert them to residential. There is no third possibility. That's all there is.

makestuff 4y ago
Well there is a fourth option. Extensive lobbying by corporations who own a ton of realestate to force people back into the office by giving tax incentives to corporations who have in office workers.
mortenjorck 4y ago
Indeed, I wonder that too: when push comes to shove and the commercial office market is left with billions of dollars in worthless real estate, what happens next? My hunch is that you're right, but that it will follow a different pattern from what is popularly imagined. I think we tend to have this lofty vision of office towers being converted into no-frills, affordable homes that will offer working-class families a place to live close to where they work, but this vision doesn't really match with economic reality. Much more likely in my view, given present residential construction macro-trends and the actual costs of residential conversion, is this: A slow process of converting the buildings that are currently losing the most money into luxury housing. The conversions will be massively expensive, in some cases more than the cost of new construction, but they will happen. The upside of this, while much more limited in scope than the popular conception of residential conversion, is that it will increase the housing supply, and stands a chance to ultimately improve affordability as those who can afford it upgrade to higher-end homes.

makestuff 4y ago

Well there is a fourth option. Extensive lobbying by corporations who own a ton of realestate to force people back into the office by giving tax incentives to corporations who have in office workers.

mortenjorck 4y ago

Indeed, I wonder that too: when push comes to shove and the commercial office market is left with billions of dollars in worthless real estate, what happens next? My hunch is that you're right, but that it will follow a different pattern from what is popularly imagined. I think we tend to have this lofty vision of office towers being converted into no-frills, affordable homes that will offer working-class families a place to live close to where they work, but this vision doesn't really match with economic reality. Much more likely in my view, given present residential construction macro-trends and the actual costs of residential conversion, is this: A slow process of converting the buildings that are currently losing the most money into luxury housing. The conversions will be massively expensive, in some cases more than the cost of new construction, but they will happen. The upside of this, while much more limited in scope than the popular conception of residential conversion, is that it will increase the housing supply, and stands a chance to ultimately improve affordability as those who can afford it upgrade to higher-end homes.