How Empty Offices Become Apartments In The U.S.
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- เผยแพร่เมื่อ 22 พ.ค. 2024
- Some U.S. mayors are loosening up rules that determine how developers convert office buildings into apartment complexes. The conversion trend sped up in the 2020s, as the pandemic remote work boom reshaped cities. Declines in office activity are straining tax revenues for city services like education and transit, leading some local leaders to prioritize increased conversion of dated buildings. These rule changes may create some additional housing supply in regions like the U.S. east coast.
Chapters:
00:00 - Introduction
01:45 - Conversions
03:34 - Prices
05:01 - Vacancies
07:00 - Policies
Producer, Editor, and Aerial Photographer: Carlos Waters
Additional Camera by: Andrea Miller
Animation: Christina Locopo, Andrea Schmitz
Supervising Producer: Lindsey Jacobson
Additional Sources: Census Bureau, Jones Lang LaSalle, Kastle Systems
Additional Footage: Athenaeum of Philadelphia, Columbus Metropolitan Club, Getty Images, NBC4 Washington, Office of New York City Mayor Eric Adams
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How Empty Offices Become Apartments In The U.S.
I don't know why everything built now has to up "luxury or upscale" there is a huge need for affordable utilitarian design in every US metro.
No profit in that. No profit, it doesn’t get done.
@@AJourneyOfYourSoul You're wrong. There's profit just not as much profit as these greedy a$$ developers and real estate brokers wants.
Office buildings are usually located in the MOST expensive places. This isn't an affordable housing solution. We need to build new mixed-used buildings.
Hopefully they will have cameras in the hallway so we can watch the woke all living peacefully their new community 😂😂😂😂😂😂
@@50jakecs There is very weak profit in that given the high borrowing cost. When borrowing costs come down and luxury/high end real estate starts to be saturated, new building will move towards mid market, though not necessarily low end; that is usually older properties with finishings that are a bit out of style and perhaps not quite up to date, but it's not infested with anything and all is clean and working, as it should be.
Not just office buildings have been converted to housing. Near me is an old schoolhouse (built in the early 1900s) that was closed due to too few kids living in that neighborhood, and it was converted into apartments for seniors
That’s good that the old school was repurposed. I once lived in an apartment building that used to be an old hospital.
There's also been old shopping malls that have been converted.
Public schools are also closing here due to low enrollment -no young families due to cost of living. You don't live in CA do you? All old people in my neighborhood.
@@Adonna2424 I was really thinking about this
thats a bad sign just in general, my man lolz
The only alternative is not office to condo conversion. You can convert the offices into mixed use buildings, with condos at the periphery, and offices, and commercial units inside. This way, you can drastically increase convertible offices.
This is what I would think. Cut down travel time to work and bring the food and shops closer to the client. Like a college campus dorm.
Sound efficient but I would be interested on how this actually plays out.
Offices want windows too.
@@steveb796Something like a data center or storage units wouldn't need windows.
@@vamoscruceros data center has all kinds of electric and cooling needs. Storage needs easier access than middle of an office building above ground offers. Total office to condo conversion when it makes sense would work.
I think this boom is great. My only objection is, can we make SOME of these conversions more affordable for MOST and not all be so high-end? As a fan of architecture, I love what they are doing with these places. I love the individuality that each new project is getting. This Atlantic property is amazing , but yeah the rents are just astronomical! Whew!
They briefly mentioned it here, but it comes down to the cost to convert. I live an area with a lot of converted mill buildings that are gorgeous, but the conversion process and upkeep of old buildings is pretty cost prohibitive, hence why the companies either need financial assistance or the properties are expensive. In theory the prices will go down (comparatively) in a few years because they'll have made back the money they spent, but that takes a while.
Make SOME of these conversions more affordable - how??
@@mard9802 You say it as if it can’t be done. 🤷🏾♂️
Cheap rents (aka cheap tenants) don't make landlords profit for shareholders.
I live in Cleveland and all the conversion Apts are way out of my price range... And I make a good living...
We were looking at getting a bigger office. However the office owners would rather it to sit empty instead of reducing their price by 10%. So the one we liked sat empty for 2 years now
Keep studying real estate. You will eventually understand why . This is common.
@@NoxLegend1why is that?
They ain’t giving you 10% off 😂
@@NoxLegend1maybe try studying economics instead. Real estate is just like any other “business” where if it’s not making you money it’s worthless. Even if you think you have a valuable property & even if you own it outright you still have operating cost & X number of dollars going out with $0 coming in means you are losing money. Also, even if you think you can just sell the property, you A) aren’t going to make up money lost having it sit empty for two years and B) not having a tenant makes that property extremely difficult to sell. Anyone or company looking to buy wants to know they have people already renting.
One of my most favorite local restaurants was closed down because, the landlord tried to raise the rent 2.5 times the lease amount. The building has been empty for 2 years.
this reminds me of when warehouses and factories started turning into places to live by artist and students
The biggest physical issue is plumbing, that being side, why can't their be a mixed use? I have a cubical in a tower that has doctors offices, state agencies , private business, etc. so carving up a floor or two as apartments will not require reinventing the wheel.
@@danielschick7554 Agree, but it also is like reinventing the wheel considering you still have to take a whole lot into account. Its both simple and not that simple to redo a building. Fun fact, not all wheels will work for every job - you still have to consider the road, gravity, weather conditions, and etc to get the best wheel for the job other wise you will be laying flat :)
Then they get gentrified by rich bohemian types because they want to live where it's "hip".
Next thing you know, everyone but the wealthy get priced out. It's a crazy cycle.
Except those places were both spacious and cheap. These office conversions become expensive apartments.
That was organic. This scheme is largely a Democrat government idea. And, we all know those ideas usually fail. The market will decide the solution(s), not directive law.
The problem is that a lot of cities have regulations limiting zoning to single family housing. This isn't always a bad thing but in a city where space is tight, its a huge problem. The issue nearly always stems from government regulation and undue influence from powerful corporations to limit competition
Totally agree, and many cities need to review their laws in an effective time frame, so they can pivot. Change only happens when things get to a breaking point, have broken, or someone important dies, and awareness is brought in mass that forces politicians to change expeditiously. Government always plays a catch-up game.
Also from a definition of "single family housing" which requires those houses to be detached. In many European countries rowhouses that do not share any space (no common underground garage, no common boiler...) are considered single family housing, but not in the USA.
You can blame it on corporations and government regulations, but it is mostly NIMBYism at this point. The people already living there do not want higher population density with more traffic and less parking, nor poorer people moving in. They will scream about their property values going down.
@@NavaSDMB There's row houses in America, go to Baltimore where in the 80's the city sold them for a $1.
They need to get rid of those regulations imo. There's no reason for them
Great idea. Studio apartments needed. Affordable, affordable, affordable!!! Single working moms and the elderly laborers need housing yesterday.
i love how all the real estate agents are trying to convince people its a bad idea - they rather people be homeless than lose a buck
It not because a lot of building dont have to core internals to support apartments. What do you do with a building plumbed for 1 bathroom/breakroom per floor for example.
Capitalism always leads to this. It’s the root cause of the affordable housing crisis.
How about trusting someone who knows more than you do? Apartments need windows in each room. You cant turn an office building into an apartment because offices don’t require windows so the middle of the building would be wasted space.
Exactly! They rather build an eyesore on top of a postage stamp property that stands vacant for decades!
Strange…. Exactly thé same in France. Around Paris, a lot of office building are empty (own by bank that are wainting better days). Finding a flat or a house are nigthmare for individual!
Bruno
San Francisco really needs to do this. We have one the highest empty commercial office space in the country.
San Francisco is literally decades behind NYC in commercial to residential conversion. It's one reason why the retail and hospitality industries in and around their downtown core are in total collapse - there's simply nobody down there now to utilize those services. If they converted most of their prewar commercial buildings to residential, they could house something like 30,000 people downtown and turn it into a vibrant community.
And most of those prewar buildings would make great residential stock - the buildings are generally smaller-footprint so apartments would all have windows, and the larger old office buildings tend to have central light / ventilation wells/courtyards and more plumbing stacks than modern buildings do.
It's the inept incompetence of local government that's stalling this conversion.
or just put the homeless in those buildings and raise taxes to pay for it.
@@sunspot42 I agree 100 percent! It's a shame I'm from the city and 10 years ago it wasn't like this at all. Some small businesses are closing because they were dependent on the workers (mostly tech) that would flock to restaurants and stuff.
Once the pandemic hit and work from home happened the offices got empty which hurts the economy of the city as well because they all moved outside of the city
@@francismarion6400 They tried putting the homeless in a dozen or so hotels around town during the pandemic. They did something like $36 million damage to those hotels in about a year.
So no, don't ruin those buildings by turning them into warehouses for the insane and drug addicts.
California also has the biggest homelessness problem. It just makes sense to utilize these empty buildings.
As others have pointed out in the comments here, I hope the people doing this are giving due consideration to partial conversions, with street level storefronts, office space and residences. The walkable shop-and-work-where-you-live concept produces much more vibrant, sustainable neighborhoods than massive pure residential complexes (e.g. the well-intentioned but il-conceived projects) or pure business districts (what everything south of City Hall used to be before Battery Park City).
@@Danny099 we NEED to get away from car centrist cities tho it's a step in the right direction.
@@Danny099 Who said anything about self-contained neighborhoods? What I described is most of Manhattan, with shops, businesses and residences within an easy walk of each other AND (what you seem to have overlooked) seamlessly blending into the adjacent neighborhoods.
Buildings could contain both office and residential units in a mixed-use building, and zoning needs to be amended to permit this.
Yes lets listen to random youtube people. tell us what needs to be done.
@@NoxLegend1mixed-use building is great. We have plenty of mixed building here in asia. I'm in big city, mixed-use building have apartement, mall, office and hotel even some mixed-use building have university.
No, just housing and commons spaces with vending machines and game rooms as well as gardens!🐱
@@NoxLegend1 LMAO!!!!!
@@NoxLegend1You are thr one that sounds like a clown here.
Forced return to office is one of the reasons why many office buildings are empty. Work from home was very comfortable and stress-free for the employees but now when they have to return to office to do the same work, it seems very ridiculous as people have to unnecessarily travel daily sometimes long distance through huge traffic which becomes very stressful especially in bad climate conditions. Hence people are searching for jobs which can be done from home and doesn't require commuting to offices daily. High time corporates and the government realised the problems of the employees and they can't expect everyone to work from a building just because the corporates have to recover the real estate costs. In Australia, commonwealth bank employees are threatening walkouts because of return to office calls. People must have the choice to work from homes. Period😤😤😡😡😡
Or how about mixed residential buildings? Have some shops on the floor, some residential at the very top and lower, and some office space between? Return to office wouldn't be so bad if you could just take an elevator to get there.
@@randeknight ya, that might work but WFH is still more productive and preferable for those people who can get their work done irrespective of the job location.
In New York City, there has been a surge in office-to-apartment conversions in recent months. As of June 2023, there were over 100 office buildings in the city that were either in the process of being converted to apartments or had already been converted.
100 office building conversions are certainly going to bring down nyc's astronomical prices, said no one EVER.
Too little too late.
They seem to be mostly "luxury apartments" from what the contractors in those conversions have said.
@@JJ-mh3hb Are you sure about that? In a property developers eyes it sounds quite lucrative!
This is a good idea. If the individuals involved with project, would increase supply and meeting housing demand. However, prices should be considered as it might lead to overpopulation. Therefore, the individuals should increase a certain amount, just to meet demand but not fully as it protect the city people. It’s my opinion.
It needs to be affordable housing.....not just housing. I dont care about offices being converted into luxury apartments.
more housing lowers prices overall. we can focus on some affordable housing, but really what we need is much, much more housing as fast as safely possible.
WHO’s teach the “affordable” that you MUST get MORE than a 7th grade education?? This ISN’T 1882 anymore!!!
@@l.e.5977 I like to think of it as 'the perfect is the enemy of the 'good enough'' Especially since historically, the most effective supply of affordable housing has been premium/luxury housing that has simply aged out of being hyper desirable and simply become 'okay' housing.
That said, I do think there's room to do things like set hurdles for people trying to price gouge. And of course, all of this has to be done in turn with re-planning our cities to improve density (and thus tax revenue relative to outlays) and reduce car dependency (cars should be a convenience, not a necessity to live in a city).
@@l.e.5977 well said except the affordable housing part.
your handle 'nothing' is correct.....if you want investors to invest don't count on it being in affordable housing.....but if you understood business or economics you wouldn't need it explained to you.
Block institutional investors from buying residential homes, full stop. We absolutely can bring down the cost of living by removing these people out of play. It's insane to me that this isn't a more discussed issue across the board.
They are trying to implement a feudal regime. They have read too many knight novels like Don Quixote. Feudal system is a system that came from desperation after inoperant government and barbarian invasions. So it is the post-decadent system of a once mighty empire. It is going to fail, because feudal system was not exactly a system to make lots of money.
They are funding politicians who are bought and paid for.
People who have money are allowed to spend it.
@@charlesbarkely3021 They are not allowed to buy off politicians and gerrymander the entire electoral system just because they know these politicians can be bought and sold like candy.
supply and demand. institutional investors incentivize new construction and investment (duh) in housing. ultimately they lower housing costs (despite making certain types of housing in certain areas harder for non investors to own rather than rent)
I still find it interesting that they still have the gall to say that $1,300 a month is affordable when it still isn't and never was. Inflation for all things has gone up tremendously and it's nothing like what the people in the 40s-90's paid. That's actual affordability. We have a crisis not on trying to find places to convert into more spaces to live, but making sure people aren't having to think between rent and eating well and addressing all the other hidden costs like bills that go into having a place of your own.
Finally someone reasonable!!! I hate hearing that something like $1,500 is affordable because it’s less than 2-4k that apartments charge. I pay $850 with utilities and it’s still a big strain on my finances every month.
If cities keep this up landlords are going to have a name your price for rent! 😂
It makes total sense once you realize the goal is, for you to own nothing and be happy.
conversion costs is about 500 dollar per sqft.. does that sound afforable to you? most construction loans are 11% APR , does that sound affordable to you ?
$1300. Yes it is affordable. Please bring me back to that price please. 🙏
Best freaking idea ever!!! I had heard in a City where an old Mall was turned into an apartment building mainly made with efficiency apartments. Love it! 🤙🤙
A mall would be easier than an office building. But...
* Office buildings have shared toilet facilities at the core. It is not cheap to run new facilities for apts.
* Finance. Typical office garners $300/sqft. Avg housing units $150-200/sqft. Who makes up the difference? By the way commercial real estate finance is based on rent yield, not like a residence. Unless the lender agrees the current owner would be in technical default on their loan.
* The city would have to agree to reevaluate the tax against the building. Something that they would be loathe to do.
Bottom line its not easy.
This is a scheme to use public money to bail out real-estate investors who are losing money on their downtown investments. You missed the only true line in the whole video. "Real-estate investors do not do anything out of the goodness of their heart." This is just the propaganda and media campaign that leads a theft. Most of these office building cannot be converted into human, intelligent, efficient housing. Even the ones that can are positioned in places that would be unsuitable for housing. Instead of proper zoning and a moral angle to civilization building the US empire continues to scammer from one quick fix to another as all the people in leadership chase the now defunct dollar. Literally tanking our civilization while chasing tokens.
@@johnmcginnis5201 if it was they would all be swooped up and converted....when you take the financial incentive out of the equation you won't see too many people running to do it for nothing.
@@bsmiddy236 Yep. It is tough to make the numbers work out. Dead malls that were converted into town halls or apmts would be more feasible. A mixed use apartments/eateries/services for a mall conversion would be the way to go. Most malls are located away from city core so the cost per sq ft would be lower as well.
Then why are the Housing Authorities across the country knocking down high rises?
High rises only work for the rich
As long a institutional investors continue to purchase blocks of homes in the 'affordable' range with all cash offers to be used as rentals, the supply side will remain tight and renting will be the only option as well as an expensive option.
i hope u know investors arent the reason they are expensive, its buyers its they drive price investors arent going to pay over sticker for a property
@@MRdownrising there’s no such thing as a sticker price for homes. If it sells over under, it wasn’t properly evaluated to begin with.
@@MRdownrising So if investors were removed from the equation, prices will remain high? You're joking right?
Please complain to the people that sell those homes.
@@MRdownrising Wrong. Investors are one of the primary causes of this issue. Investors need to be HEAVILY regulated and taxed unless they can prove they're adding real value (which most investors don't).
$2k a month for a apartment is insane. I pay $490 a month for a 1 bedroom apartment in Ohio.
😮
I'm moving 2 Ohio 😂
@@djack915 yeah some people do because it's way more affordable. My case is rare at $490 but the average is around $600 to $700 for a 1 bedroom. Even houses can rent for $1500 or less.
I wouldn't live in Ohio if it was free
@@maxk6867 ok
Near neighbor of The Poplar here in Philadelphia. Just wanted to point out that Post Brothers now owns so many units in the city that now they are impacting the median rent numbers. The Poplar is located adjacent to a public housing development, and it’s a stark contrast in the inequity that exists for Philadelphians seeking affordable, high quality housing. Folks in public housing next to folks with extreme wealth. A mix of socioeconomic backgrounds is essential, but what we are seeing is a growing divide between super rich and super poor.
@BadDriversofMaryland Philly is a great example of wealth inequality because there are numerous neighborhoods where on one side of the street you have run down projects and bandos and on the other people with nice cars living in fancy townhouses wearing designer clothes or one block is full of homeless people and addicts but the next block over is nice apartments (temple area being a good example).
I used to live in the area and drove all over the city from Kensington to south Philly and it's practically the same throughout the city. It's honestly mind-blowing.
@@wolfee904I care
Most of the people who live in downtown "luxury" apatments don't actually do any living in the neighbourhood at street level. They take the elevator to the parking garage, get in their cars and leave the area to do everything- even grocery shop. Then they act incredulous and say things like "WHAT "food desert"? There's a Trader Joe's just 5 miles away."
@@Orangewood76 That's how they function in my city. They go through the highway to another zipcode. They don't go to the park, cornerstore, or any small shop nearby.
then the poor need to improve themselves./ get jobs instead of welfare . stop having kids out of wedlock. get a high school education - it's free. work every day and do take drugs.
For YEARS bosses & CEOs insisted that working from home was NOT possible. Then the pandemic proved them wrong &/or liars.
For some jobs it’s fine for others it’s not..
BS.
WFH only promotes waste and squandering of work time. If I were a CEO, it would never be an option.
SAVING on office space rent IS what convinced them!!!
Rich gotta rich. Poor gotta serve. Masters and slaves. It is what it is.
Hell yeah it's possible. But productivity is not the same.
A great to get people to work in the building again! Convert the commercial space to a residential space where the occupant "works from "home". Genius!🎉🎉🎉
Greed will always play a role in how this is done.
There are two former office buildings, probably originally built in the early 80s, that were converted into apartments near me, just outside of NYC in NJ. Their original structural layout lend to very spacious apartments. Even the studio apartments are incredibly big considering that most others in purpose-design apartments are quite compact.
Who tf is paying $6,000/mo in rent? That's $72,000/yr to RENT an apartment. Completely absurd.
Some people pay $15,000... $40,000.
Bottom Line: It's *a* solution, it's not _the_ solution in and of itself.
We lived in a university city and older office buildings in downtown that had businesses on street level and offices on upper levels that moved to new nice office building has been converting those older buildings to condos for years. Some became used for students and others were made into the young professionals housing for the people wanting to be close to the downtown food culture.
reminds me of the university city i live in
I work in NYC construction and literally everything is Luxury living. I honestly cant believe these people are paying the astronomical rents! If your in NYC you MUST make a lot then I assume a single person by themselves is impposible
Office spaces and apartments are two vastly different dynamics. For one thing, every flat in an apartment has a bathroom, shower, and kitchen. Offices might have a few public bathrooms, maybe a shower, and a few break rooms. Office buildings also use whole building chillers, boilers, and bulk shared electrical systems. Converting an office building to a space suitable for habitation is a very big, complex, and expensive endeavor. Not saying it can't be done but it is a much bigger challenge once you realize what is involved in such a conversion.
Agreed. I'm a big fan of converting the spaces, but also realize that the needs to make a space are vastly different, hence why they said older buildings are easier to convert. They didn't mention it here, but another option is not doing full-building conversion and instead doing a mixed-use building or doing more communal-style properties. Unfortunately, the process is very expensive either way, leading companies to either need large grants/incentives to keep costs down, or the cost to rent or sell each unit would be more expensive.
Not to mention that office locations are often not ideal neighborhoods. Office buildings tend to group together, so residents would be having to live in an area with few amenities like restaurants or stores.
@@sswpp8908 I think that opens up the possibility of making the buildings more mixed use, like having stores and restaurants on the lower levels with residential upstairs
@@Erin-rg3dw Retail space brings in another different set of requirements for an office building to provide which it wasn't built for. That will add to the difficulty and expense to the conversion.
The is part of the problem : The affluent are the ones supporting the states zoning laws. They DO NOT want anything to change. They do not want office buildings converted to the point it changes their atmosphere with either more people or more people around them with less money than they have. I think the point I'm trying to also make is there is a fine line between converting offices, converting a lot of office fast, and IM-balancing the housing market in said area which affects prices. The affluent do not want this.
It would be easier to convert some of the buildings to co-living apartments and affordable housing.
With co-living apartments, you can utilize the existing plumbing using the shared spaces concept.
I would keep the bottom 2 floors commercial. 1 of the floors would be converted into a multipurpose floor. This could include ( an atrium, green space, a botanical garden, event spaces, etc)
That’s true and entry level worker would love this arrange.
You can have a co working hub at the lower floor.
They did a lot of this in Berlin, I was only there a couple of weeks but it definitely seemed to be working for them.
I stayed at a hostel in DC twice, the recent stay was April 2023. Its a typical east coast row house, 3 stories+ basement with a share kitchen+ rooftop garden. They seemed to be profitable and offered free free new PC at common space. There's a supermarket 2 doors away, restaurants around etc. It's approx 35 minutes walking distance from the white house. The others buildings around it are restaurant, offices etc.
I like staying there because it's the cheapest opinion, safe neighborhood and walking distance to all DC attractions. So, it's always possible to convert existing building into Co living units for short or long term
not really good bathroom situation as you have two rooms sharing the same pipes and so you have two rooms competing for the same water pressure from a single pipe
Most office buildings do not have bathing facilities so how do you solve that one? Sounds more like a high priced hostel.
This is what happened in the late 90’s and early 2000’s in Berlin, with the derelict factories and warehouses dotted in that city, it was easy to convert that space into livable lofts, and spaces to party
They should consider dorm- like apartments. Something that a single person can actually afford.
Agreed! Even a dorm-partment where the landlord cleans the shared bathrooms and kitchen areas would be attractive!
@@advancetotabletop5328 People need to clean up after themselves. We dont need to expand the slave class of illegal immigrants that clean all the buildings in this country at 2am for peanuts.
I like this idea. It reduces the amount of rework needed and provides options for people that need to go into a central office a shorter commute. Also it provide downtown businesses like restaurants and bars more weekend customers.
I honestly wondered about that too. Not everyone needs luxury. You'd be surprised how most recent-graduate hires or interns are just scrambling for a dry room for a roof and bare necesities.
I lived in the dorms four years. I lived in an apartment. Great idea for young folks ...harder once you get married... especially with kids. Great idea for new singles though....
There should also be a middle ground where you can convert some of the building into apartments and keep the office spaces so that many of the workers don't have to commute to work by having the option to live on the same building as where you can work.
Trust me, you don’t want to live where you work. Would you really trust your boss not to come personally knocking on your door to make you work on something outside of work hours?
Or, as employer see it, 24/7 availability since you're practically live at office
that can be a real problem of noise . having a busy office above your apartment can drive you crazy with footsteps particularly women's shoes . if the floors are hard you get clicky noise that transmits through the concrete like crazy.
@@ronblack7870 I work in an office and even on the quietest of days I can’t hear the people above us
Who wants to live where they work lol unless you’re a influencer or something 😂😂
Need more of this. Cities really need to change up their zoning practices too to ease up the housing burdens. Also company housing campuses would be great to reduce the need for vehicle travel for environmental purposes.
Question….how ungodly, absurdly high are the rents on these apartments? I don’t, for a moment, believe this was done to help people find affordable, suitable living space…just one more avenue for the rich to get richer. After all…this is America, that’s how things work…right?
One of the cheapest ones they showed was 2200/month I think. Can buy a 250k house for that much per month
Yes, but there are very few areas with a wealth of high paying employment opportunities where any decent houses are available for anywhere near $250,000.
Making a profit gives the investor an incentive to provide housing. You take the profit incentive away, you will end up like Russia, China, etc. where the government builds ugly high rises.
The rich people would have bought/rented expensive apartments elsewhere anyway. You really think not building apartments will lower the rent somehow?
@@mirzaahmed6589 The economic theory of supply and demand usually sets rent prices. You increase the supply significantly, rental prices usually makes it better for the consumer. The nation in some areas is behind by at least a decade in the supply of multi family units. When the free market increases supply in excess of the demand, it creates competition which usually lowers rental prices. We are talking residential hear.
We should definitely be doing this in our little burg but when the mayor suggested the vacant offices could be used to house students in the city, he was met with a wall of indifference. A lot of commercial real estate is owned by a small number of powerful families and they have ridden the boom-and-bust cycles for decades. They now they can lease commercial space and leave the tenant to pay for refitting the offices - the last thing they want is to sink money into a completely different market.
Nice to see these areas revitalized this way. So many central business districts become barren wastelands outside business hours.
I think some offices could much more easily be converted into shelters for homeless people and people who want a cheap place to sleep (just put a bed in each cubicle and upgrade the bathrooms to have showers) than to completely overhaul them into fully-fledged apartments. The break rooms of many offices are perfect for communal kitchens if you just add a toaster oven.
A dangerous idea. You need to supervise them and that's expensive and would be money better spent on giving people some security and a decent place to life. What people think is charity, is actually essential in order to have a civil and safe society. Ignore it at your peril.
The homeless dont need shelter, they need the opioid crisis to stop & very expensive/complex mental health treatment no cities can afford. Putting homeless in shelters has been tried for decades, the dont work when these ppl dont follow rules & addicted to drugs.
My feeling has always been that any new housing is generally good housing, even if it leans on the more expensive side. That's one new housing unit that people can now choose from and, if you get lucky, it will be occupied by a person who was renting a less expensive unit and so now somebody can move into that less expensive unit. If rents in the area are just too high in general, like NY or CA, then you're better off moving elsewhere because housing isn't going to keep up any time soon.
Cheap apartments are old apartments. Making a new expensive apartment today often makes a cheap apartment in 20 years.
Except in Arizona, where housing has shot through the roof in the past 5 years as people move here for the cheap housing. In a state where the median household income is $63K, you can’t have an average home price of over $400K for very long before your streets start teeming with tents. If the government were smart (oxymoron, I know) they’d tie rents to income and tax the snot out of institutional investors. At least that might quell some of the frenzy.
I live on the 11th floor of a converted office building in downtown New Orleans..building was completed in 1920.. rode out Hurricane Ida in 2022..
@@codacreator6162 actually one of the dumbest statements I have heard yet!!!
@codacreator6162 the reason a lot of investors and new residents came to Arizona is because it is business-friendly, landlord friendly and has population growth. If The government starts over regulating and taxing just like California and New York. We will see less investment, less job growth, less population growth just like California and New York that are losing residents every year
It doesn't matter if you convert them. If the government doesn't hold on to them or regulate them, they will just end up in the portfolios of the same corporations that created the issue to begin with. There are plenty of apartments and condos out there that are being sat on because they would rather rent or sell to one whale than lower the costs and fill the building. And if it were hurting their bottom dollar to do so they wouldn't do it. There are apartments buildings out there that are basically empty with only a few tenants. That to me means that it only takes a few tenants to keep the building afloat. And that just come across as blatantly unethical. But since the government is too scared to regulate anything, what do we do?
Good points. I say raise the taxes on large apartment property owners who don't offer affordable housing or have a large percentage of vacancies, and simultaneously, the government can offer said property owner an option to sell to the government at a price well above the property value, just like the government used to do for buying up property to run highways through.
We overthrow sus azz govt
They could set them up as ultra-cheap rentals by installing basic dividers and amenity blocks, like in student dorms. Not for living forever, but would take the pressure off low-earning renters.
who do you want to do this?
One of the reasons the homeless are on the streets is they actually feel safer there, than in the homeless shelters(!).
What does that tell you?
there are dangerous people who prey on the homeless, steal, rob, assault etc etc.
You don't want to bunch them together, you cannot supervise them adequately that's why people need safety and privacy.
It's not Disneyland out there in homeless shelters and it's not just happy college time either.
I see so many posts like this and people who are living in comfort just don't bother to educate themselves about the real risks and dangers that happen to someone who ends up homeless, usually due to circumstances.
We owe it to society to properly research the topic and not just indulge in college related nostalgia. Sorry to be harsh, I'm sure you meant well but this is a crisis and we all need to make informed contributions and not just indulge in wishful thinking. BTW the reason homeless sleep during the day is they feel safer in daylight where there are more people out who would witness anything happening, they are often awake all night being vigilant so they aren't robbed or assaulted. Horrible isn't it? Children should not be subjected to this but often are. We are our brother's keeper and we need to care more. IMO
watching this video made me realize how broke and unattainable housing is for me and will continue to be! I guess everyone I see in NYC are millionaires for the fact people can afford to pay 5k+ a month for a studio apartment in the city. I make 70k a year in construction NYC and I can barely get by paying rent by myself.
Then move to a cheaper place. I know it's easier said than done. You know why you earn 70K in NYC instead of 50K? It's because the cost of living is higher.
So how would he be any better off by moving to a lower cost of living area if his salary would be lowered and he comes out about the same at year'@ end? That only helps if you have a work from anywhere type of job where you can move where cost of living is lower but your company continues to pay you the same salary!
@conniesaratoga3194 and the crazy thing is I do love somewhere cheaper in N.J and I commute but literally doing so I lose MORE than half my paycheck because I pay taxes on both sides plus I'm single paying the highest bracket 🤦🏾♂️
Mind you, I own multiple businesses, and yet it feels like I'm barely getting by, I pay 525 right now in jersey for a room. But if I move to NYC to be closer to my businesses I would have to probably dip in my business income to support my rent in nyc and that's something I DON'T want to even consider
@@song1861 construction would pay that much even in buffalo. that's only 35/hr . if you have construction skills you can get that now .
@@conniesaratoga3194 not true
Never made sense pre-pandemic to have so much of the workforce waste so much time & resources in needless commutes & working in a cell sized cube. Everything is sent via email anyway even if the person sending it is 5 feet away. It’s just a control mechanism for a poorly trained & incompetent management staff.
To be honest, middle-management should’ve died off the moment everyone started using email. The entire idea of a middle manager was to collate information and move it up the chain email does that has been doing it for decades middle management needs to find something to do in order to justify their existence, which is why there’s so much emphasis on return to work.
Technology allows hierarchy to flatten a bit, but filtering and leadership from middle management is still crucial to effective production. Otherwise you end up like the Russian military where a handful of colonels and generals end up enforcing routine personnel planning and discipline that sergeants should be handling. Or the shitshow that Twitter under Elon Musk is undergoing with nobody between the c-suite and the sysadmins.
"Nobody does things in the real estate world out of the goodness of their heart"...a bit surprised to hear that out loud, though not a shock as it feels very obvious. Between that and crappy zoning laws, I'd think touches on a few of the major issues.
Some countries in Asia have retail in office buildings, each floor has different retailers I think might be good idea
I like this longer form content that is more indepth, thanks CNBC.
Excellent idea. Also all of the vacant malls. They can incorporate stores ,apartments and other resources like post offices and library's.. it could be mini communities.. use all that waisted space maybe rents would go down some with a huge influx of properties.
It's so hard because many turn to drugs to take the edge off their circumstances then they have more problems. So there needs to be programs to safely address this. You don't want drugs and drug dealers in the picture but you need to offer safe solutions too for everyone. These are long neglected problems and now they've multiplied and causing social insecurity for everyone.
It’s about time this needs to be done all over the world ❤
Except Singapore. They already solved their housing crisis.
Affordably for a range of incomes from the lowest.
In August of last year I started cleaning a commercial office. It has 4 floors and every night I'd see cars there and lights come on/off. I swore someone lived on the top floor. I finally confirmed. It's creepy and odd because the lower floors are medical facilities but for sure it's an apartment upstairs.
You sure it wasn't just a security guard who spent long shifts?
I always wondered how many people do that and how difficult or easy it would be to get away with it.
It’s just the stepping stone to the “15 minute cities”….
This kind of got me thinking. For people who know about city finances, they always say that cities love to have businesses in them much more than houses and apartment -- and this is because businesses pay more and require fewer services. So a hurdle to a better expansion of WFH in our culture is that cities have a reason to protect employer's RTO goals rather than doing the right thing and encouraging them to do right by their companies and incentive WFH or hybrid schedules.
If you think about it, maybe the fact that so few services are needed for businesses is a good sign that needing everybody to huddle in an office together is kind of pointless and doesn't really add a lot of value. Think of all the money that companies would save by having their headquarters as a PO Box, and not having to pay for bloated rent and bloated property tax.
Portland, where I live has so much empty office space and a large homeless crisis.
The buildings are the solution to PDX's problem!
All the city council has to do is look up for once and see the empty buildings!
The real problem is the prices on everything especially rent and groceries. Inflation has gone down substantially so why aren’t these prices reflecting it as well?
Because it was never inflation. It was greedflation.
@@andrewzcolvin lol true
Not having enough resources is never the problem. It’s corporate greed and bureaucratic bs and the regular people always suffer.
Times are changing. Makes sense to convert from commercial to residential in certain markets as the free market adjusts . I believe the free market is the best way to go. Government can provide incentives, zoning changes, and opportunity zones.
I used to think everybody went broke during the Great Depression and other major crashes but they didn’t… Some made millions, I also thought everybody went out of business during these times but they didn’t, some went into business, there's always depression/recession for some people and there's always a good time for others, it's all about perspective.
First step is discovering loopholes to generate gains during volatility, It is very possible to retire big time from the current market condition without having to hold assets long term.
The issue is people always have the “I’ll have to do it myself mentality”. Unapologetically, that’s why they get heavily affected during a crash especially with the longest bear run ever in American history. Most folks aren’t equipped to manage this crash and it’s impending opportunities well enough, so it only makes sense to seek proper guidance during these times, that’s what Financial Consultants are for. Been using one ever since the pandemic in 2020 and I’ve been barely affected by crash.
@@mcginnnavraj4201 If that isn't the harsh reality, what is? This financial consultant you are following must be doing something right, Please who is he/she?
Salvatore Fortunato Sofia is the Consultant that oversees my portfolio. She's been able to gain some reputation and online recognition with over 3 decades in service, so it shouldn't be a hassle to find basic info.
Thank you for this tip. It was easy to find your coach's webpage by looking up her name online. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
We as Americans like bailing out Corporate America and the wealthy. Give tax incentives to the wealthy to covert their commercial holdings to residential units.
You will pay for those incentives
@@steve_m2473 Agreed. Like I said in my statement, we give tax breaks to the wealthy, gleefully. Tax breaks for the rich….incentives for the wealthy to create economic activity. Student loan debt relief is consider bailouts for people that have their hands out. That won’t create economic activity.
@@lifewarrior64 overpriced for you but not for the renters
The plan of apartment 526 reminded me of my grandparents railroad flat on 10th Street and Avenue C inManhattan in 1950.
Very comprehensive analysis of a very real problem
I love this idea. This could also be a trial for affordable housing and universal housing
Wouldn't it be great. Practically however, will fund the office conversion crusade? If taxes are raised, companies and families will move to localities not charging taxes to fund these building conversions.
Hire Japanese Remodelers... They can turn anything into proper living spaces!
Lol... affordable housing. Good luck with that. No one in power wants affordable housing
@@apollo2728
Economics 101...
Scarcity drives up pricing... Availability does the opposite!
Converting just 3 buildings would net about 1000 apartments and keeping it at a family of 2... The knock on effects you can imagine the rest
The capitalist elites wont allow universal housing, that gives a lot of freedom and negotiation power to workers. They need them living paycheck to paycheck.
Multiple use buildings need to be considered. Other countries do it already.
Likewise, we need to seriously look at zoning laws. Can we strike a few of the unnecessary ones from the books?
Additionally, we need to start looking at secondary cities that have similar issues. Phoenix AZ comes to mind. How to address this?
And lastly, can we standardize anything? It's cheaper to build standardized units, rather the one of a kind places. Need to look at "assembly line" techniques moving forward.
Mixed use have been done for decades in the US.
yeah but a lit of suburbs areas ban them for some stupid reason
@@saynotop2w desperate times call for drastic measures. Overseas they have multi use properties and complexes.
@@suedewuede9341 Exactly!!!
I live in a neighborhood that already has mixed use buildings.
But I’ve read that in most major cities luxury complexes are mostly vacant, yet rent prices keep rising. By that logic, how is converting office space into apartments going to actually create an affordable housing market?
Great video, thanks so much!
CNBC could also look at some really awful office "conversions" done in Croydon, London, UK by the AA Homes & Housing and associated Anabow Services Ltd companies. They demonstrate how these conversions should NOT to be done.
We need this to create affordable housing in Chicago. In Northern Illinois, they won't even add you to the waitlist for *affordable* housing because the *waitlist* is so long- like yearsss long. And you can only really get on it if you're already houseless, but you have to have a mailing address, and chances are you just never hear from them at all. And that's not touching on the total lack of support for people who can't work at all. When jobs don't cover basic human survival needs, we need to force change.
Its been happening since 2020/21 in South Africa as a result of "you know what" and the subsequent shutting down of businesses or consolidation of companies.
The only thing that a city could do is pass a law that would allow residential living in a commercial area if the landlord chooses that option and not by for force
What is never addressed in these videos are all the vacancies in cities like New York. These vacancies are due to investors, especially foreign, looking for places to park and launder their money. There are thousands of such properties in markets with huge housing shortages.
Either the owners rent them out to people who will actually live in them or there should be a prohibitive tax levied on such behavior.
The revenue received could then help subsidize housing for those that honestly need it. People who live and work in these areas, but can't afford to live in them...
Please, it’s also our local richer Americans that will gladly buy up entire buildings, refuse to rent them out, and then claim them as an “asset” during tax season so they can receive a tax write off, thus making even more money than they originally would’ve.
@@milehighgambler Smart move. They're just using the tools and laws available to them.
@@milehighgambler Just for clarification, I did say investors, then mentioned the word foreign after....
@@bwofficial1776 right, but when poor people use those same tools you guys call it “welfare”
@@milehighgambler Welfare is buying buildings and using the tax code?
Offices and malls are going to be a problem. Technology is only going to make them more obsolete and a waste of space while we have a huge demand for housing.
Some abandon/for sale malls are bring made where each old store is either 1 or 2 maybe 3 apartments in a room or with the big stores a 4 set and they keep the rest of the inners about the same and turning it into an indoor park with maybe some small housing in parts they could not have a park with plants and the really small halls get the mini stores in them. Then turning the unused parts of the parking lot into more temporary stops for overnight truckers/those with campers. Some small malls are being turned into more strip mall style and given a refit of building into the mall where the halls were leaving the biggest entry parts for another big store.
The Mall in Pierre (Pier) South Dakota is going to individual rooms but where they can still use the inside, 2 or 3 of the places have an entry out front Tokyo Sushi, then the old K-Mart now a Hobby Lobby, and a Carls Appliances that was a JC Pennys before the old owners screwed up jacking up rates for the non local stores with that and a different chain clothing store near Pier 1 going away, allowing for a better sized Pier 1. The mall is 1/3 dead but that is due to the one side of the small indoor strip mall they are on near the Hobby Lobby that is basically its own store with no way into it from the mall so nobody wants to be on that side even if there are some small stores like a Micro Radio Shack and old GNC for rent perfect for small business.
This is amazing!
More housing is badly needed. Also more compact cities.
No. If you deport all the illegals, problem solved. And you'll solve the strain on resources at the same time.
I imagine the plumbing needs of apartments are greater than office space, since a single office of many workers usually only has 2 bathrooms. And only 1 breakroom, which may or may not have a kitchen sink.
There are also issues with the windows. Modern office buildings are built with more interior space to less exterior wall footage. Old office buildings needed windows for ventilation which makes them better suited to conversion.
This is a great idea. I have a 30 min commute to work and still have to pay $950 per week rent (albeit split between two people - it’s a two bedroom apartment). It’s a pretty new and fairly nice place, but it’s also small, so there’s no way it’s worth this much.
OBVIOUSLY…it IS!!!! YOU are PAYING it!!!!
It is "worth" whatever a tenant is prepared to pay. You are paying it, so you already decided it was worth it.
That’s the new trend that’s booming especially in downtown cities and/or nearby neighborhoods close to downtown!
Another problem that makes office buildings more abundant than apartments is the law. Many cities have laws that discriminate against apartment landlords especially in the north. Office buildings don't have such discriminatory laws. Therefore office buildings make more profit and they got built more. If you want to incentivize more apartments, stop creating new laws that make running apartment buildings less profitable.
You have to consider new apartments, housesor even reworked one like this are always more expensive then old ones because of higher and more recent cost.
My office in SF is being converted into luxury housing, it's interesting considering how close it is to the tenderloin and how the housing need is not for luxury housing.
bx7....don't you know why? if there were no need for luxury housing they wouldn't build/convert it.....there is no money in affordable housing therefore investors won't touch it.
The word luxury is slapped on all new apartments now days. Like seriously 300sqft is not luxury that's a shoe box. I recently bought a 515sqft condo and it's at the minimum size limit to where I don't need to go outside to change my mind. Still I got it for a price I couldn't say no to in the PDX market.
Before I even watch, how AMAZING ❤, THIS IS AWESOME
Bro, all the homeless need is a bed and a roof above them, they don't care if there is one toilet in a building or if there is any expensive decorative conversion that does not contribute to living conditions in any way but only to look nice.
Is it any cheaper to rent a small office or retail space, than an apartment, especially in cities like NYC? I mean like the kind of offices that people like solo practice attorneys or similar small business owners use when they need a work space. Does anyone ever rent one and secretly live there and lie about running a business out of it? How easy or difficult would it be to get away with, or would it even make financial sense to do it? Of course, they'd have to figure out the bathroom and cooking situation, but they can get creative.
The toughest part of conversions is you’re taking 30,000 sq ft with plumbing for only 2 bathrooms to now 20-40 bathrooms, showers, kitchen sinks, etc, etc.
It’s almost better in some cases to tear down the building and build a new apartment building from the ground up rather than modifying the existing structure.
Need more of this ❤
It's time for every major city in the US to zone and build Megabuildings, like those in China. We're talking 10,000+ unit buildings for people to live in, mostly dorm-style single units in the 200 - 400 sqft range, putting price options in the $400 - $800's.
They could make them into room shares too with shared bathrooms. It's be easier to convert and cost way less.
This is why it’s the cities that need to run these conventions - when it’s left to the Private sector it just becomes another corporate money making scheme that barely solves the housing problem.
On the flip side - Cities need to STEP UP in removing red tape and producing mediocre results.
I agree. I'm happy for the free market to do it's thing with luxury items, but basic necessities should not be left in the hands of rich people chasing an extra million.
Really interesting discussion of the issues. The bouncing letters in the yellow boxes are painful on the eyes.
Sounds like what we should do is regardless of zoning, the floor plate of the building should be able to flow between zoning for easy conversions without requiring a lot of demolition and renovation. I know there will always be a lot but sounds like this won’t be a problem that will go away in the future and I’d rather us just demo a bunch of walls and hallways instead of cut out a center of a building or try to produce balconies where there weren’t any before. Should be like mixed use high rises with each floor being able to become any of the possibilities (retail, office or residential)
One problem with the conversion to residential is the weight difference between residences and offices. Residences are generally heavier than offices.
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9:31 a window shade on the far right building. 3rd from the top, 2nd on the left, goes from open blinds to closed blinds. Just a random little detail I noticed
was wondering when this would get started!
This is exactly what we need! More remote work should alleviate the housing shortage.
not necessarily, if there's restrictive zoning you're just going to move the problem, not solve it. The root issue here is that we simply just don't build enough housing in desirable city and suburban areas
Yes and yes!
Did you watch the video???
@mohammedsarker5756 Housing is expensive because it is scarce. If we do this over and over on a large scale, it will help to alleviate the housing crisis. That doesn't mean it's the only thing we need to do, but it's definitely low-hanging fruit.
Laws can be amended with changes. Internet has been killing office buildings. People need places to live, 😊
This is the best, also combining the office area and apartment still the best too.
I'm curious about the association fees in these buildings. As offices, businesses would be paying for security, upkeep, all the money needed for the maintenance and staffing. In San Francisco I knew people who lived in some high-rise apartment units, and their association fees, which is separate from rent, were often higher than what my rent was.
It's just about time maybe we should turn Universities buildings into apartments as well. Anything that can be done remotely it should be turn into livable space.
Yeah I learn how to do surgery through zoom
@@stevechrollo8074 just for your info, no surgeon learn to do surgery in a college they do followship in hospital. Close to %80 of colleges and universities buildings are obsolete nowadays and shutdown them down will even help reduceing admission cost.
I feel there will be another depression if inflation and prices don't go down.
Kinda funny how everyone keeps talking about a mild recession- you’d think people would have woken up by now- these places will become the new Hoovervilles
Inflation/gouging is down (except florida) but housing is artificially inflated as always.
@leafhopper8750 you say it's going down, and it doesn't seem like it with food prices and the price of rent going up and salaries are not.
They should rebuild them into apartments for the homeless to own. Help them get jobs and affordable medication and let them make affordable house payments and never kick them out so they can feel better about life and humanity.
I was in NYC when I was about 12, visited a person in a high rise, I got so sick, nauseated almost the whole time. For most of my life I lived in country or small towns. I cant imagine living in these. Went to central park, felt better. Do we evolved to our environments, I think so based on my experience. I would suggest forget the plumbing and install waterless toilets, incinerator, or freeze dried . No plumbing pipes. Could put residue in bags to place in special bins.( plumbers could be trained to service alternative toilets) So then only have to worry about drinking water, laundry and bathroom. Could build balconies for small trees, plants. As well on top make a urban forest for all residents to have. Im sure glitches along the way, but suggestions help bring other perspectives to use or not.
Maybe you could have office space and apartments in the same building?
Many of these properties do! Developers are interested in ‘mixed-use’ properties which combine residential with creative stuff like rentable office space, soundproof rooms for musicians, or even childcare centers in some cases.
Absolutely. I was stationed in Panama in the mid 90s & my barracks room was upstairs, while my office was on the 2nd floor.
mixed use zoning? that sounds socialist....