A report from the Brookings Institute argues that office-to-residential conversions are one potential remedy to the housing crisis in some circumstances, but the public interest in conversion and the potential beneficiaries must be clearly defined in order to justify any public financial support. The report identifies the five common arguments made by proponents for converting offices into housing, then evaluates the myths and realities of each argument using data from cities across the United States. It concludes with six recommendations for what cities should do about conversions and what other long-term strategies they could adopt.
Common arguments in favor of converting offices into housing include the advent of many remote-work office jobs, the argument that having too many offices are bad for a downtown business district, the need for mixed-use developments to support a diverse range of businesses in downtowns, the decline in local tax revenues, and the prospect of converting vacant offices to housing to solve the housing crisis.
After analyzing the strengths and weaknesses of each of these common arguments, the authors argue that office-to-residential conversions are not a panacea, but rather one tool in a much broader toolkit for downtown revitalization. They conclude with six recommendations for local leaders, which include:
- Make it easier to build new housing on vacant and underutilized lots in downtowns and surrounding neighborhoods.
- Provide tax incentives for conversions only when they are also available for new construction.
- Only consider public funding for conversions in the form of forgone tax revenues, not direct subsidy, and ensure any subsidies are tied to public benefits.
- Identify opportunities for office conversions in all districts, and not just downtown.
- Make it easier to build new buildings and change existing ones.
- Leverage downtowns’ locational advantages for a range of other strategies to revitalize them.