World leaders are looking at vacated office buildings and shuttered retail shops and seeing one thing: housing.
The coronavirus pandemic has caused many commercial spaces to empty out, either as a precaution for the safety of workers or as the result of going out of business. Top officials are hoping these spaces can be adaptively reused.
In the U.S., Housing and Urban Development Secretary Ben Carson says that as people abandon offices to work from home, the vacant space could be adapted to address housing shortages. “That’s going to free up a lot of commercial space, which can be converted to affordable housing to take some of the pressure off,” he told Fox Business in late June. “Virtually all of the major cities have significant spaces that can be used, and we’re encouraging [city officials] in their planning now . . . to begin to take this into consideration.”
A week later, U.K. prime minister Boris Johnson stood at a podium decorated with the words “Build Build Build” to announce “Project Speed.” This plan, expected to come into force in September, would accelerate infrastructure projects and push through home building and conversion projects by reforming the planning and zoning process. Blaming “newt-counting delays in our system” for the slow pace of home building in the U.K., Johnson’s plan would allow most commercial spaces to convert to residential uses without a planning application.
These kinds of conversions are easier said than done, says Sheila Botting, president for the Americas at the commercial real estate company Avison Young. The office buildings Carson has in mind are not great candidates for residential spaces. “They’ve got giant floor plates,” she says, meaning most of the subdivided spaces would be windowless caves. “And to go from the windows back into the core is very deep and therefore very tricky to make a conversion to residential.” She says it can be done, but only about 10% to 20% of office buildings have a small enough footprint and plumbing in the right places that they can feasibly be turned into housing. “Most of them, because of the density, because of the math and financial feasibility, it does make sense to level it to the ground and start over again with a specific design.”
Beyond physical limitations, there are also zoning challenges to deal with, according to Danielle Lewinski, vice president and director of Michigan initiatives for the Center for Community Progress, a nonprofit focused on vacant property in cities.
“The underlying zoning of some of these spaces is quite antiquated,” she says. By only allowing a single type of use—such as office space or retail—the zoning automatically precludes conversion to housing, or to mixed-use development that can meet a wider set of needs. In many municipalities, the office buildings Carson wants to convert to housing are only zoned to be office buildings—subject to rules that are set at the local level and which often require a lengthy public process to change.
Lewinski says much of the adaptive reuse happening currently is targeted at projects that can spur economic development, such as converting shopping malls into housing and office complexes or adapting big-box retail to accommodate housing and healthcare facilities for seniors. Often the lower density of these structures, and the built-in accessibility of elevators and escalators, makes them more attractive to developers trying to tap the senior market. They’re also more adaptable to the live-work-play mix of uses that can pump more money into the local economy.
“The idea is that if you can convert these spaces into destinations, into places, that can have wider spread benefits,” she says. “So while you may not see large-scale adaptations of 500 sites within a municipality, if they can do one right it can have a number of ripple effects throughout the community.”
In the U.K., the problem is much bigger than a few empty shops, according to Anthony Breach, an analyst at Centre for Cities, a nonpartisan research organization in London. He says many of the commercial centers in smaller towns were simply built for the pre-internet era and weren’t ready to see so much commerce shift into the digital space. “What’s been the case is that large parts of our town centers and city centers across the country just have way too much retail,” he says. “It’s difficult to see this policy alone saving the high streets, saving these areas.”
The empty commercial spaces are a reflection of the way many of these towns are struggling to stay competitive economically, he says. The effort to convert some empty shops to housing may help reduce that vacancy to a degree, but replacing a shop with a house won’t make much of a difference if there aren’t any jobs—the deeper issue that has caused these commercial areas to decline in the first place. “These places also need longer-term economic and industrial strategies, which requires recognizing the significance of the skilled labor market and the importance of city center locations as well.”
“In the long run, it’s going to be about connecting those towns on the outskirts of cities to strong city center economies, and in particular making sure that the workforce of that city region has the skills and the qualifications for a productive city center economy,” Breach says.
Lewinski says cities and towns in the U.S. will also have to think bigger about the problems they’re trying to solve, and actively enable adaptive reuse projects to happen. That can mean easing zoning changes, Boris Johnson-style, or offering grants to redevelop properties that have gone irreversibly vacant. “What I don’t want to see is all this vacancy occurring and then municipalities asking what’s next for this property,” Lewinski says.
The coronavirus pandemic is likely to spark much more interest in adaptive reuse projects, particularly in suburban office complexes, but Lewinski says it’s too early to tell what, if anything, will come of it. “The best thing municipalities can do is speak with these property owners and understand in real time how to more proactively respond,” she says.