Office to Housing Conversions

What is Office to Housing Conversion?

Since COVID, office space vacancies have risen dramatically in cities across the United States as more people work from home and more businesses operate as virtual workplaces. Converting vacant offices to homes has become a key opportunity for cities to upzone downtown areas, increase urban density, and unlock more homes near transit, jobs, and other opportunities.

The Impact of Office to Housing Conversion

The national vacancy rate for office space rose to nearly 20% by the end of 2024. Converting empty offices into homes is an opportunity to reinvest in struggling downtowns, increasing tax revenue while also addressing local housing needs.

Most downtown areas already have strong access to jobs, transit, and amenities. By converting empty offices to homes, cities increase access to high-opportunity areas and turn empty commercial districts into thriving communities.

Converting empty commercial spaces into homes boosts downtown activity, supports local businesses, increases tax revenue, and creates vibrant, mixed-use neighborhoods, addressing both vacant buildings and housing shortages simultaneously, making cities more resilient and walkable.

Crafting Office to Housing Conversion Policy

Office-to-residential conversion policies are especially sensitive to eligibility criteria, zoning codes, and building codes to determine whether conversions are financially viable for developers. Because these projects often involve complex tradeoffs between economic, regulatory, and community interests, well crafted policy design is essential to build a broad support and successfully advance legislation.

Policy Features to Aim For

Allow for by-right conversion of office and commercial properties to housing along commercial corridors. Requiring objective standards for approval ensures that new housing proposals can't be delayed or denied based on unclear or inconsistent criteria.

Example Legislation
Example Language: “This bill would create the Affordable Housing and High Road Jobs Act of 2022, which would authorize a development proponent to submit an application for a housing development that meets specified objective standards and affordability and site criteria, including being located within a zone where office, retail, or parking are a principally permitted use, and would make the development a use by right and subject to one of 2 streamlined, ministerial review processes.”

A public-private partnership is an alternative procurement method in which a public agency partners with a private-sector entity in order to leverage private resources and expertise through the transfer of risk.

Example Legislation
Example Language: “The Fund is created to address the serious problem of a lack of developable land in urban areas of the Commonwealth and the high cost of redeveloping such land. The Fund shall make grants or loans to local governments for assembling, planning, clearing, and remediating sites for the purpose of promoting such sites to private developers for redevelopment.”

Policy Features to Avoid

Local communities historically have not been successful at predicting the appropriate amount of parking. Setting a maximum now can become another barrier to housing down the road. Additionally, parking minimums add costs and space requirements that can make redevelopment infeasible to build, especially in areas where additional parking cannot easily be added.

Affordability requirements often make many projects financially impossible to construct or renovate.

Office conversions should not be subjected to aesthetic requirements because strict design standards can make projects financially infeasible without delivering meaningful public benefits. Conversions already reuse existing structures, which reduces carbon emissions, construction waste, and development timelines. Adding costly or subjective aesthetic mandates can stall or kill projects, limiting housing production at a time of severe shortages.

Implementation Guidance

Ensure legislation has a clear and close effective date
Allow for developments to use tax abatements, grants, or direct subsidies to reduce construction costs
Add a clear enforcement mechanism that provides an appeals process or legal recourse (e.g. appeals board, third party standing, referral to Attorney General’s Office) when projects are denied

Common Political Dynamics Around Office to Housing Conversion Policy

To get buy in, prioritize spreading a fact-based narrative about this policy and its benefits by building coalitions with local residents and businesses. Education sessions and neighborhood meetings can counter common fears about the impacts of converting offices into housing.

Office conversions are win-win because they ease housing shortages while also revitalizing areas that are struggling to recover from industry changes to office work, all without the need for new construction.
Office conversions are more eco-friendly than new construction because they reduce materials and waste.
Conversions are faster than new builds and can be cheaper than new development, especially with incentives.

Chambers of Commerce
Redevelopment groups like Urban Redevelopment Authority of Pittsburgh
Affordable housing developers
Heavy construction associations
Homebuilders associations
Apartment management associations
Environmental groups

Building code officials
Fire department associations
Neighborhood associations

YIMBYs in the News

Ohio

The Transformational Mixed-Use Development Program has provided a tax credit against development costs incurred during the construction of a project that will be a catalyst for future development in its area. Eligible projects include both new construction or improvement of vacant buildings.

Virginia

Henrico County in Virginia converted an aging shopping mallinto mixed use development, with apartments, stores, and restaurants.

Resources about Office to Housing Conversion

The Brookings Institute's office-to-residential conversion case studies.
Gensler's articles on how office-to-housing conversions revitalize downtowns.

Office to Housing Conversions

Converting vacant office space to housing is is a great way to expand housing supply, revitalize downtown areas, and make the most of existing infrastructure.