Last month, New York State passed the Housing Our Neighbors with Dignity Act (HONDA), laying the groundwork for hotels and other commercial buildings to be converted into affordable housing. Nevertheless, a recent article by NBC News gives a laundry list of reasons why among commercial buildings, office space, in particular, is unlikely to be converted to affordable housing. 

The gist: it still remains far too profitable to give this property over to affordable housing. That is, there’s simply too much money to be made in the long term, even if rentable spaces continue to remain vacant in the short term. Why risk setting a precedent that unused space should be given over to the thousands of people who live on the street? Why set a precedent that the dignity of every person is more important than Cushman Wakefield’s quarterly earnings?

Nevertheless, politicians have at least begun posturing. New York’s HONDA specifically targets hotels, which would make for easier conversion into housing. Indeed, during the pandemic, New York City authorities were embroiled in battles over the fate of hotels converted into housing for the city’s large population of unhoused people, which it did, much to the chagrin of some outspoken residents of Manhattan’s Upper West Side. The Lucerne became the emblem of the temporary conversion of hotels into housing. Nevertheless, this was temporary, and at a time when hotel vacancies were unthinkably high. Now, according to the city’s Mayor, Bill De Blasio, hotel “visits are up big-time,” due to increases in tourism. Is HONDA too late?

Furthermore, converting offices into housing poses unique challenges (and opportunities). On the one hand, there is a vast stock of underutilized or unoccupied office space, while hotel vacancy rates have recently declined. Office vacancy rates are unlikely to ever return to pre-pandemic levels. While the return to the office has resumed in earnest, in the long run, it is simply unlikely that younger workers will agree to give up the perks of working from home, as Nelson D. Schwartz and Coral Murphy Marcos argue in a recent New York Times article. Indeed, Millennials, especially of the younger variety, are significantly less inclined to return to the office, even if it means giving up a job that may require showing up in person. With the workforce only getting younger, it is unlikely that offices will ever fill to pre-pandemic levels. 

For this reason, since the beginning of the pandemic, there were calls from many including Bloomberg City Lab’s Patrick Sisson, to rethink the future of high-density commercial areas like Midtown Manhattan, which to this day, sit relatively empty compared to their early-2020 bustle. While the deep floor plates of many office buildings do present architectural challenges to a successful conversion to housing, the true reasons for hesitancy are not spatial. NBC’s reporting on the issue suggests that premium office space, Class A, is unlikely to be converted. 

In fact, according to a study conducted by Gensler in the Canadian city of Alberta, the older and more run-down the office space, the better the chances of it being converted to housing. This is both because of the financial disincentive for converting newer, more valuable Class A space, but also because older office buildings tend to have smaller floor plates. 

Luckily, New York and San Francisco, both cities with serious homelessness problems, have no shortage of aging office space. Whether there will be an incentive to engage architects for this kind of adaptive re-use project without developers’ hands being forced, remains to be seen. Regardless, with recent energy code updates, architects will be rehabbing these old office spaces for one use or another in the coming years—affordable housing or no affordable housing, the question is who will stand to benefit?