Researchers at NYU and Columbia University found that repurposing vacant offices as affordable living spaces could help alleviate housing issues in major cities, including New York City.
The National Bureau of Economic Research, who conducted the study, found that 11% of offices across the country could be converted to affordable housing.
“We emphasize two key problems that are leading to this situation,” said Arpit Gupta, one of the study’s researchers and an associate professor of finance at the Stern School of Business. “The increasing demand for remote work, which is lowering the value of office buildings, as well as the environmental externalities coming from dirty, old office buildings.”
In New York City, there are approximately 75 million square feet of empty office space — enough to occupy more than 26 Empire State Buildings. Meanwhile, the city is seeing severe housing shortages due to zoning laws that limit the size of developments and the number of people that can live in them. The shortage makes building difficult — especially when it comes to lower-cost units. As of August, the city’s homeless shelter population had exceeded 100,000, exacerbated by the influx of migrants since spring 2022.
In order to be eligible for conversion, buildings had to, among other requirements, be located in Midtown or lower Manhattan, built before 1990 and at least 25,000 square feet, according to the study. Lawrence White, an economics professor at Stern who was not involved in the study, said the researchers’ criteria for how office buildings could be restructured was limited.
“My instinct is they’ve probably been overly cautious, my impression is they’ve done a quite reasonable job in assessing the prospects of converting commercial real estate into urban housing,” White said. “My guess is creative people could come up with creative ways to use that interior space.”
The study aligns with Mayor Eric Adams’ “City of Yes” plan, which was launched this summer, to facilitate complex office-to-housing conversion projects. The plan created an Office Conversion Accelerator — a city government contact for building owners considering the transition. The New York City government announced that the City of Yes plan would also expand zoning regulations to facilitate housing conversions.
The study recommends several policy developments, such as zoning regulation changes, to incentivize housing conversions. White expressed apprehension about whether the study would succeed in getting the attention of policy leaders.
“It drives me crazy to see New York City, let alone the suburbs, putting impediments like zoning in the way of getting more housing,” White said. “It’s been an uphill battle.”
Contact Mariapaula Gonzalez and Salma Badr at [email protected].
