I'm confused. Why is this program necessary? If building owners are sitting on vacant space because the demand for office space has dropped, while the demand for housing continues to rise, aren't they already incentivized to convert to residential space just based on the market conditions? Not sure why the city has to subsidize the property owners.
Most office buildings are not architecturally feasible to convert to residential. In fact, because of zoning laws, many/most can't even be converted.
Would you live in an apartment 15 feet wide and 50 feet deep? No. That's why most office buildings dont work
You have to redo all the mechanical, plumbing, electric, and then entirely refinish the building. Its literally cheaper to build new than deal with the nightmare that is to convert an office.
I work in CRE - every single office to multi deal i have seen the developer has war stories. And the units are 40-100% more expensive in cost than other apartments.
Office buildings are like an infectious disease. You could let them die. But if you have an urban infill city environment and more and more office properties become ghost buildings, then that disease will spread. All of the restaurants and other businesses nearby that rely on the foot traffic from office folk, they will die. You will see more riff raff. More homeless. More crime.
Many office assets need to go to 0 in asset value before the private market is willing to take the risk of those conversions.
Remember, loans are close to 10% for construction. And equity returns are higher.
> Would you live in an apartment 15 feet wide and 50 feet deep?
Yes, if that's the alternative to being enslaved for life. How can people still not understand that there is a massive part of the population who need to be able to purchase their living space to not have to rent for life or take on life-long debt that they can't afford. How can people not understand this? Yes, it's better for a young worker to be able to purchase a shit apartment that is a converted office building and start building his or her future, than pay rent for years and years and have nothing to show for it.
This is a true "let them eat cake" situation. Imagine if we didn't allow people to eat because we didn't think the food was good enough. That's what's happening with housing.
I definitely agree about this ownership vs rental dynamic and my first property was a long and narrow townhouse with 1 wall of windows and a couple of tiny ones on the other side (probably closer to more 25 x 75). My concern with these conversion proposals is that they will only be for rent and not ownership and that they will be priced the same as everything else…too damn high.
It’s probably cheaper just to allow new construction. Boston has plenty of underdeveloped land that could be converted to multistory residential, but the city’s zoning laws forbid most new residential construction.
>Would you live in an apartment 15 feet wide and 50 feet deep?
For laughs, I just measured the width of my home's hallways and rooms. I don't see why 15x50 feet apartment isn't doable especially for a bachelor/new couple starting out. Assume an apartment with a 3 foot wide, 50 foot length hallway, subtract another 2 feet width for walls/piping/whatever, and then you can hang 5 rooms that are 10x10 feet from the hallway. Enough for a living room/common area/kitchen/2 bedrooms. Might get a bit cramped but very usable.
I assume I'm missing something here since this doesn't seem to be too bad.
All of your windows are on one of the 15 ft walls. You would need to have the lights on all day in many of the rooms, no opening a window for fresh air, limited escape options in case of emergency. Perhaps some of these concerns should be weighed against the reality of housing shortage and homelessness, but ample windows throughout is the standard for residential today. That’s why modern office tower conversion involves cutting the center out for a light shaft.
I've read that one of the biggest problems is that while the demand for office space has dropped, the cost to convert to residential is so high that building owners can't break even on a reasonable timeline so they have little incentive to convert. I'm not an expert at all, but I think that in addition to building out the new floor plans you pretty much have to redo all the plumbing and electrical and I believe in many places the rules for emergency exits are different between the two building types. I think in some cases it would actually just be cheaper to tear the entire building down and build a new one from the ground up.
I think many owners have the mindset that if they're going to lose money either way they'll stick with the devil they know and hope for a miracle rebound. It sounds like this program is offering tax incentives to help offset those conversion costs to make it much easier for building owners to break even after a conversion.
CRE is WAY higher in the top tier areas of SF, for the obvious reason that historically high startup capital outpaces all other residential price pressures.
> Couple that with the fact that office rents are higher per square foot than residential rents are, and you see why developers aren’t champing at the bit to get new projects underway. Van Nieuwerburgh gave me an example from San Francisco, where Juul’s old headquarters—down the block from Twitter’s improvised dormitory—is for sale for $150 million. That’s a lot less than the $397 million the embattled nicotine vape company paid for it in 2019. But at $400 a square foot to buy and another $400 a square foot to renovate, he said, the conversion would still produce a building with rents too high even for San Francisco. In other words, offices may be down, but they’ll have to fall a lot further before adaptive reuse becomes a bargain.
>Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
>Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
>When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
I don't sense any combative tone - the statement was describing the state of things in a truthful manner.
I find your tone ("they need to calm down", "take a break from social media") much more condescending and passive-aggressive. Maybe you are projecting your own feelings onto others? Therefore, maybe the advice you're giving to them is actually advice you want to give to yourself?
Note that this is merely an observation - I have no way of knowing as I don't have access to your mind, and I don't care either way, so feel free to label my comment as combative, too, if you wish.
You might still be upset from our previous exchange in another thread about Hanlon's razor, so you found another comment of mine to try and pile on ("Oh no, that's not true, I just decided to participate in this 4-day-old conversation!")
I don't recall any of our previous conversations, and 4 days is not a very long time on HN front page.
Please try to see communication as sharing more than a battle. It doesn't matter who's right, what matters is to share knowledge and help each other converge to something resembling the truth. Life is much more beautiful from that perspective. Have a good day, too, but sincerely, not in a snarky way.
Well I expected you to deny it, but it's quite obvious, especially with how combative and upset you were in our previous exchange.
But trying to carry on vendettas in other threads isn't healthy or productive, so I suggest you don't seek out other comments of mine to pick fights ;)
I'm sorry you feel that way, especially considering how much effort I put into writing a neutral and non-combative reply. It seems to me that you see hostility even when there isn't any.
I appreciate that you've softened your tone from your earlier hostile remarks.
But getting upset at a previous discussion and then looking up threads of mine to pretend to scold me isn't neutral, it's unhealthy.
This will be my last reply; I'd appreciate it if you don't stalk my comments to try and carry on a grudge. If you would like to get the last word, and try to carefully craft a response to make it appear that isn't what you were doing, you are more than welcome.
You seem to be convinced that I'm stalking you for some reason, and you have crafted a reply that is supposed to make any and all of my words moot.
Regardless, I do not speak to make anything seem to anyone or to have the last word - I speak because I want to communicate. And I'd like to communicate to you that I am most certainly not stalking you. I don't appreciate being accused of it with only evidence being the fact that we had a conversation before, but I understand paranoia and the distrust of everyone it causes in the soul, which is the reason I'm spending my time typing this out in the first place.
Again, I hope you find your peace, or ask for help from appropriate people if you can't. Nothing more than that.
Because they're wildly over-leveraged because they were squeezing out every last drop of capital. Landlords are economic parasites who provide very little value to the larger economy. Kinda hoping cities just start eminent domaining the properties, there will never be a better time.
