Is Zoning Helping or Hindering Office-to-Housing Conversions?

While the long-term prospects for downtown office markets are far from certain, it seems highly likely that a much larger percentage of the U.S. workforce will be fully or largely remote going forward than in the years leading up to the COVID-19 pandemic. In many cities, office buildings emptied by public health orders in March 2020 remain lightly used nearly two years later.

Commentators were quick to speculate about the potential to meet housing supply shortages through the conversion of excess office space to residences. And planners have long advocated for adaptive reuse as a more environmentally (and sometimes culturally) friendly alternative to greenfield development or demolition and redevelopment. However, as Elizabeth Garvin, AICP, and Mary Madden, AICP, note in the February issue of Zoning Practice, "Zoning for Office-to-Housing Conversions," not all office buildings are ripe for reuse.

Common Barriers to Adaptive Reuse

One of the biggest barriers to office-to-housing conversions in the short term is the prevalence of long-term leases. Garvin and Madden report that adaptive reuse specialists generally believe that many downtowns would need to sustain high vacancy rates for a decade or more before market conditions would spur widespread conversions.

Another major barrier is the relatively small supply of office buildings that could be converted easily and efficiently into residences under modern building codes.

Large office buildings built after World War II typically have large floorplates that make it difficult (or impossible) to use space near the center of the building — far away from exterior windows — for living areas.

Finally, adaptive reuse projects require uncommon expertise. It will take a while to build up a supply of developers with the capacity to routinely pull these projects off.

The Role of Zoning in Facilitating Reuse

This isn't to say that planners can't take steps now to increase the likelihood of successful office-to-housing conversion projects. As Garvin and Madden point out, zoning does affect whether an adaptive reuse project would be permissible in a specific location, and zoning standards can either help or hinder the conversion of specific buildings.

Fundamentally, the zoning code must permit residential uses in the relevant zoning district. Beyond this, codes that permit residential uses on the ground floor can decrease the likelihood of residential tenants needing to subsidize the cost of vacant retail space.

Furthermore, zoning standards that exempt adaptive reuse projects from site development requirements calibrated for new development can make or break a specific adaptive reuse project. For example, reducing or eliminating minimum off-street parking requirements means a developer won't need to demolish part of the structure (or a neighboring building) just to add parking.

When it comes to open space dedication requirements, Garvin and Madden suggest that the best solution may be to create a substitutionary standard. Instead of requiring publicly accessible open space on site, codes can permit fees-in-lieu of dedication or count other public or private outdoor or gathering spaces toward open space requirements.

Top image: Harshil Shah / Flickr (CC BY-ND 2.0)