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> With the impending single zoned commercial building crash, I was hoping we could get a massive push at all levels (federal, state, local) to provide incentive

> With the impending single zoned commercial building crash, I was hoping we could get a massive push at all levels (federal, state, local) to provide incentives for converting these to mixed zone properties. You had me up until this point. Sadly, office buildings are constructed quite differently from residential buildings, and it really is hard to convert them over. It makes more sense to leave them as non-residential space, even if vacant for awhile before finally being reoccupied, and then to separately build brand new purpose-specific high rise residential buildings (which will be nicer than a converted office building ever could). And another problem with the conversion plan is that office buildings aren't fully vacant! Here in NYC, the office vacancy rate is just under 20% (and falling). But that means it's very hard to find a single building that's 100% vacant to convert over. Most buildings are mostly full with long-term commercial tenants on long leases. Yes, some few floors might be vacant, but many are not; you can't exactly kick out the existing tenants that are making the building mostly full in order to convert everything over. It doesn't make sense and it would incredibly costly. Plus, the buildings with the highest vacancy rates are the oldest ones with the worst conditions (i.e. not prime commercial space); these are less attractive for conversion for residential.

michaelcampbell 3y ago
> Sadly, office buildings are constructed quite differently from residential buildings, and it really is hard to convert them over. That may be true, but not sure why it's relevant. If someone wants to take on the cost of doing so for an ROI, why not have the regs in place that allows it? If doing so causes some other _harm_ (environmental, whatever), then sure lets address that but not allowing something because "it's hard" seems an odd take. I have lived in apartments where basic commercial needs were within walking distance, and it was fine for that period in my life. I'd love to not have to drive or be driven to do that now, even with my SFH. There are several mixed-zone communities in my area where are all booming (not in the same building, but I don't see that as anything but the obvious next step).
- thfuran 3y ago
  >That may be true, but not sure why it's relevant. If someone wants to take on the cost of doing so for an ROI, why not have the regs in place that allows it? It's relevant because the extent of the difference has significant impact on the cost of the conversion, which determines whether the ROI is likely to be positive or negative and so whether somebody is likely to went to take on the cost without additional incentive.
  - Geisterde 3y ago
    You had it there for a minute, but... The potential profitability of converting a tower is something only the buyer should be concerned with, not the government. The reasons to not convert a tower =! The reasons to change zoning, which could reasonably include concerns over traffic or appearance.
    - thfuran 3y ago
      >The potential profitability of converting a tower is something only the buyer should be concerned with, not the government. I have no idea how you could possibly hold such a position, so I'm not really sure what to say. Do you think incentives don't matter? Do you think the government doesn't already heavily involve itself in real estate pricing beyond just zoning via numerous regulatory means and subsidies? Do you think that what gets built in a jurisdiction just isn't its government's concern?
      - Geisterde 3y ago
        I am equally clueless as to how you came up with this line of questions. Of course incentives matter, when did I imply they didnt? Of course the government is involved, which is why I said the reasons for not converting a building (the buyer) arent the same reasons why you wouldnt rezone (government), something there not clear?
      - LightHugger 3y ago
        You're a bit confused about how this works. If the gov changes an area with office buildings to mixed zoning then some will be converted and some wont because of cost. Market forces can decide what's cost effective in that case. It does not matter that some will not be cost effective to convert. There is also no damage done if magically none of them get converted...
underlipton 3y ago
>It makes more sense to leave them as non-residential space, even if vacant for awhile before finally being reoccupied, and then to separately build brand new purpose-specific high rise residential buildings (which will be nicer than a converted office building ever could). Under what criteria? Also, a large ask, but if you might indulge me: posit circumstances in which it WOULD make more sense to convert.
- Geisterde 3y ago
  >Under what criteria? If maintaining the property value is a better move in your risk analysis, over making income from renters. Maintaining the value of your $100M+ tower makes a lot of sense if you are expecting commercial real estate to turn around soon. If you convert it, it will probably never be able to sell for more than a fraction of that and investors get hosed. >posit circumstances Massive deregulation in what qualifies as legal arounding housing would be one major chip. The other would be massive devaluation (which probably depends on the former point), such as massive amounts of housing going up in neighboring areas.
- CydeWeys 3y ago
  > posit circumstances in which it WOULD make more sense to convert. If office buildings had been built with conversion in mind in the first place. This would require smaller floorplates, more utility stacks, etc., and they wouldn't be as profitable as office buildings built without those constraints, but you would at least have better future flexibility in what kind of use the building gets. But you can't just ignore that existing office buildings are not remotely like residential buildings, and would be extremely expensive to convert. So I suppose the criteria you might say is profitability; if a conversion won't turn a profit, no developer is going to do it.
  - underlipton 3y ago
    >If office buildings had been built with conversion in mind in the first place. No, respectfully, that's a cop-out. I'll give an example: New Jersey gets nuked; residents are successfully evacuated, but now they all need a new place to live, and suddenly it makes to do makeshift retrofits of Manhattan high-rises to house them, if temporarily. That's obviously at the far end of the spectrum. I'm looking for the line where we cross from "untenable" to "tenable".
pfdietz 3y ago
The solution to empty office buildings is to bring more workers to live in the city to use that office space.

michaelcampbell 3y ago

> Sadly, office buildings are constructed quite differently from residential buildings, and it really is hard to convert them over. That may be true, but not sure why it's relevant. If someone wants to take on the cost of doing so for an ROI, why not have the regs in place that allows it? If doing so causes some other _harm_ (environmental, whatever), then sure lets address that but not allowing something because "it's hard" seems an odd take. I have lived in apartments where basic commercial needs were within walking distance, and it was fine for that period in my life. I'd love to not have to drive or be driven to do that now, even with my SFH. There are several mixed-zone communities in my area where are all booming (not in the same building, but I don't see that as anything but the obvious next step).

thfuran 3y ago
>That may be true, but not sure why it's relevant. If someone wants to take on the cost of doing so for an ROI, why not have the regs in place that allows it? It's relevant because the extent of the difference has significant impact on the cost of the conversion, which determines whether the ROI is likely to be positive or negative and so whether somebody is likely to went to take on the cost without additional incentive.
- Geisterde 3y ago
  You had it there for a minute, but... The potential profitability of converting a tower is something only the buyer should be concerned with, not the government. The reasons to not convert a tower =! The reasons to change zoning, which could reasonably include concerns over traffic or appearance.
  - thfuran 3y ago
    >The potential profitability of converting a tower is something only the buyer should be concerned with, not the government. I have no idea how you could possibly hold such a position, so I'm not really sure what to say. Do you think incentives don't matter? Do you think the government doesn't already heavily involve itself in real estate pricing beyond just zoning via numerous regulatory means and subsidies? Do you think that what gets built in a jurisdiction just isn't its government's concern?
    - Geisterde 3y ago
      I am equally clueless as to how you came up with this line of questions. Of course incentives matter, when did I imply they didnt? Of course the government is involved, which is why I said the reasons for not converting a building (the buyer) arent the same reasons why you wouldnt rezone (government), something there not clear?
    - LightHugger 3y ago
      You're a bit confused about how this works. If the gov changes an area with office buildings to mixed zoning then some will be converted and some wont because of cost. Market forces can decide what's cost effective in that case. It does not matter that some will not be cost effective to convert. There is also no damage done if magically none of them get converted...

underlipton 3y ago

>It makes more sense to leave them as non-residential space, even if vacant for awhile before finally being reoccupied, and then to separately build brand new purpose-specific high rise residential buildings (which will be nicer than a converted office building ever could). Under what criteria? Also, a large ask, but if you might indulge me: posit circumstances in which it WOULD make more sense to convert.

Geisterde 3y ago
>Under what criteria? If maintaining the property value is a better move in your risk analysis, over making income from renters. Maintaining the value of your $100M+ tower makes a lot of sense if you are expecting commercial real estate to turn around soon. If you convert it, it will probably never be able to sell for more than a fraction of that and investors get hosed. >posit circumstances Massive deregulation in what qualifies as legal arounding housing would be one major chip. The other would be massive devaluation (which probably depends on the former point), such as massive amounts of housing going up in neighboring areas.
CydeWeys 3y ago
> posit circumstances in which it WOULD make more sense to convert. If office buildings had been built with conversion in mind in the first place. This would require smaller floorplates, more utility stacks, etc., and they wouldn't be as profitable as office buildings built without those constraints, but you would at least have better future flexibility in what kind of use the building gets. But you can't just ignore that existing office buildings are not remotely like residential buildings, and would be extremely expensive to convert. So I suppose the criteria you might say is profitability; if a conversion won't turn a profit, no developer is going to do it.
- underlipton 3y ago
  >If office buildings had been built with conversion in mind in the first place. No, respectfully, that's a cop-out. I'll give an example: New Jersey gets nuked; residents are successfully evacuated, but now they all need a new place to live, and suddenly it makes to do makeshift retrofits of Manhattan high-rises to house them, if temporarily. That's obviously at the far end of the spectrum. I'm looking for the line where we cross from "untenable" to "tenable".

pfdietz 3y ago

The solution to empty office buildings is to bring more workers to live in the city to use that office space.