Cities convert empty offices into apartments to address housing shortages

Property developers in Washington DC and New York City are currently undertaking the largest volume of office-to-apartment conversions in the United States, encouraged by tax incentives. Similar to trends seen in Paris, this shift is a direct response to a decrease in the demand for office space following the pandemic.

Data from a report released last year indicated that 8,310 converted flats were in the pipeline for New York, while Washington had 6,533. Los Angeles followed in third place with 4,322 units, and Chicago recorded 3,606.

Nina Albert, the deputy mayor for planning and development in Washington DC, stated, "We set a goal of introducing 15,000 new residents downtown by 2028 and we are now on track to doing that." She noted that while some significant building demolitions might occur, most projects are office conversions, supported by hundreds of millions of dollars of private investment.

To facilitate these projects, the DC Department of Buildings, which is part of the Council of the District of Columbia, has relaxed planning restrictions. Similar measures have been adopted in New York City and the UK, where tax cuts and eased rules have spurred a boom in conversions. A report from property firm Knight Frank found that such projects in London were 60% higher than levels seen before Covid.

In Paris, Cubin hopes French authorities will similarly reduce taxes and regulations to boost conversion rates. He explained that current laws classify a converted building as a new structure, imposing strict requirements for fire safety, wheelchair access, and car parking spaces. He stated, "Just how the government deals with the tax question will decide whether France will be able to convert 2% of its vacant offices or 18 to 23%."