Overview of the Research Initiative
The Brookings Institution, a leading public‑policy think‑tank, partnered with HR&A Advisors, Gensler, and Eckholm Studios for a cooperative agreement with the U.S. Department of Housing and Urban Development. Authors Cara Eckholm, Tracy Hadden Loh, Jonathan Meyers, and Steven Paynter present a study of six U.S. cities examining office‑to‑residential (O2R) conversion as a strategy to address housing shortages and promote sustainable urban reuse.
Why Office‑to‑Residential Conversion Matters
The COVID‑19 pandemic accelerated the decline of traditional five‑day office use, creating a surplus of underutilised office buildings. Simultaneously, U.S. cities face the “worst housing crisis of the post‑war era,” with high demand for affordable units. Converting office space can reduce embodied carbon by reusing existing structures, preserve historic architecture, and expand housing stock without new land development.
Six Case‑Study Cities and Key Findings
The research examined Houston, Los Angeles, Pittsburgh, St Louis, Stamford (Conn.), and Winston‑Salem (N.C.). Common motivations include diversifying urban uses, preserving historic cores, increasing density near transit, broadening tax bases, and advancing fair‑housing goals. For example, Chicago’s LaSalle Reimagined initiative aims for 1,600 mixed‑income units, while Philadelphia leveraged historic‑tax‑credit programs for 40 office conversions.
Demand as the Primary Driver
Across all cities, strong market demand for new multifamily units proved decisive. In high‑demand markets such as Los Angeles and Stamford, conversions proceeded despite limited policy incentives. Conversely, in locations with weak downtown residential demand, even generous incentives failed to generate significant conversion activity.
Policy Tools and Their Impact
Local governments use two main levers: (1) easing zoning, permitting, and approval processes, and (2) financial incentives such as tax credits, subsidies, or public‑grant programmes. Pittsburgh’s “by‑right” zoning change and tax‑abatement program illustrate how streamlined processes can stimulate activity, while Houston’s lack of parking requirements favoured hotel conversions over housing.
Sustainability and Carbon Reduction
Reusing office structures aligns with climate goals by avoiding new construction emissions. The California CALGreen standards specifically encourage embodied‑carbon reductions through adaptive reuse, highlighting the environmental upside of O2R projects.
Federal Role and Funding Landscape
Since 1977, the federal historic‑tax‑credit programme has cost $44.3 billion but leveraged $235 billion in private investment, underpinning most office‑to‑residential conversions studied. Additional federal tools—Low‑Income Housing Tax Credits, HUD vouchers, and a recent White House guidebook of 21 programmes—remain under‑utilised for O2R projects.
Challenges: Data Gaps and Market Uncertainty
A persistent obstacle is the lack of transparent, publicly accessible office‑vacancy data. Proprietary datasets, inconsistent reporting, and the rarity of publicly recorded leases create uncertainty for developers and policymakers, hindering accurate feasibility assessments.
Economic and Fiscal Outcomes
Cities that successfully convert offices report multi‑fold increases in property values and tax revenues, as seen in Lower Manhattan’s 1970s conversions. However, the feasibility gap—difference between production costs and market value of new units—must be closed through either strong demand or targeted incentives.
Lessons for Pan‑European Sustainable Housing
European cities facing similar office‑space oversupply can draw from these U.S. examples: prioritize clear, streamlined zoning; align financial tools with local housing needs; leverage historic‑preservation credits to lower costs; and ensure robust data collection on office markets. By focusing on demand‑driven conversion and integrating sustainability metrics, O2R can become a key component of Europe’s transition to greener, more inclusive urban housing.