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OrangeSlimeSoda t1_j60zdvu wrote

Realistically, converting office spaces into residential spaces (even if you can get past the zoning issues) would result in the office spaces becoming basically dormitories rather than actual housing. Office buildings simply aren't built to allow plumbing access to each office, for example, so communal bathrooms will be needed. Can you also imagine the mess that a communal kitchen would create? Upkeep and cleaning costs would go up. Many landlords may likely have clauses in their mortgages that their property can't be used for any purpose other than for office purposes; even if you can get around that, the potential damage that could be caused would make any refinancing institution balk.

EDIT: To expand, issues with the plan include:

  1. Structural issues: the buildings simply aren't suited for residential living. With how office buildings are structured, converting floors to dorms is a far more cost-effective and time-saving measure than to convert to a proper housing unit with a bathroom and kitchen space. It would be little better than temporary housing while new buildings are built (which is a good thing) if the City could even pull it off. But good luck getting a commercial landlord to agree to it.

  2. Legal: if a landlord doesn't want their building converted to residential use, the only thing the City could do is to seize the property which, under the Fourth Amendment of the Constitution, the government cannot do without providing adequate compensation. Can you imagine the cost to the City of either paying tens of billions for a temporary solution, AND having to pay for years of litigation? By the time the suits are resolved, new housing could be built.

  3. Health and safety: imagine the hygiene issues that would be associated with living in a dorm situation like this. Office buildings also aren't equipped to handle the kind of waste that residential buildings can. On top of this, can you imagine the safety issues? I wouldn't want to be woman living in a dorm-like situation like this.

  4. Contractual: many mortgage lenders will require that a property be used for a specific purpose, and it could be a default under the mortgage if a landlord converts it from office use to residential. A lender is unlikely to allow this conversion because (a) dormitory tenants are far less stable and less likely to provide regular rent revenue for the landlord to repay the loan; and (b) residential tenants cause greater wear-and-tear on the building and are more likely to cause damage (like a sewage issue or a fire).

The time, effort, and cost required to fight landlords and lenders and then convert is better served pursuing an aggressive re-zoning plan, at which point building new housing projects wouldn't take much more time than Adams' conversion plan, which is a short-sighted band-aid solution that doesn't stand up to a basic level of scrutiny.

Well, why would landlords want to just sit on empty buildings? Well, 2022 was the first year in which tenants have tried to get employees to come back into the office, and office occupancy hovers at just under 50%. As things get back to "normal", we will probably see a ceiling of office occupancy at 60%. But that doesn't mean that the space is useless. If lenders agree to it, those spaces could be converted to a variety of purposes - they could be used for classroom and education, medical uses like doctor and dentist offices, health purposes like fitness and dance studios, etc.

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brownredgreen t1_j610it1 wrote

What do YOU propose we do with empty office space in Midtown? Empty for the long haul as WFH shifts the landscape?

Its easy to be a critic. Its better to offer solutions.

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OrangeSlimeSoda t1_j6118e5 wrote

There's no easy solutions; that's why there's a crisis. But that doesn't mean I shouldn't point out the problems with converting office to residential. If you close your ears to criticism, you'll just keep blundering into problem after problem.

Obviously this is a consequence of 20 years of administrative and municipal negligence. It's like climate change - anything we do now will take years to pay dividends. Here's a panel talk by experts in the field given at Fordham's law school late last year where they go into various issues contributing to the housing crisis: https://www.youtube.com/watch?v=I9703JH3AX8&ab_channel=Fordhampcsinfo They basically don't think that converting office to residential is a feasible solution because you can't get the private sector on board with it, and these projects require a concerted effort by both the private and public sectors.

If office building owners don't want their property used for residential, what will the City do? Seize the property? That will mire the City in years of costly litigation, and by the time it's settled, new housing buildings could be halfway done.

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LikesBallsDeep t1_j61h2mu wrote

Noone's forcing anything.

If you own an office building now and are losing a shit ton of money because it's mostly empty, this would just allow you (and maybe offer some incentives/zoning and code waivers) to convert it into apartments/condos so that you can stop losing a shit ton of money.

If you as the office owner prefer to keep it as an empty office and continue losing a shit ton of money, that's your god given right. It's also stupid, but being stupid is also your right.

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ehsurfskate t1_j64jxb4 wrote

There is ALOT you are missing and assuming with your assessment here.

First off is you are assuming there is no cash flow at all for these office spaces. There is and return to office continues to tick up. If it keeps going and if there is an event like a white collar recession employees will be more willing to go in and will have less bargaining power.

The second is you are assuming it would be more profitable to go residential. There are huge construction costs to make this transition, plus downtime where the building is empty and design costs. Residential is also less money per sf by ALOT.

The last and most important point is the value of commercial space versus residential. If you convert a building not only do you lose SF to get legal light and air plus egress for each unit, you lose huge value on the sf you do keep. This drops the value of your overall portfolio which you use to gain credit and borrow with (to the tune of tens of millions). These buildings are not all about cash flow for owners. They are giant stores of wealth for credit and borrowing.

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LikesBallsDeep t1_j667e6f wrote

You are stuck in 2019 world.

The old trend line of office space value is permanently gone. Adapt or perish.

Anyway, this is about allowing those that want to to do the conversion.

If you are right, nobody will want to, so no harm done, right?

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ehsurfskate t1_j677lji wrote

I’m not stuck anywhere and in my profession change and churn equal profit, I also work from home 3 days a week so not sure what you are on about.

I’m not sure why you are assuming it’s permanently gone either. Just as it changed to more wfh it can change back again. I hope it doesn’t but if we hit a recession and people need work they will go into the office if required.

I’m not saying it should not happen. I hope it does. I was just adding some context to the wide eyed people of this sun who may not know much about the commercial real estate market inner working besides - yay wfh new paradigm and yay more housing

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cavalryyy t1_j63kis1 wrote

I’m super on board with the idea of the conversions, but I’m curious how do you think they could handle the “everyone but me” mentality? Afaik it’s not like we have 60% of office buildings completely full and 40% completely empty. So if you own an office building and you hear that all the government is trying to get all the offices near you to close down, then by saying “okay everyone but me should close down, I’m going to stay open” you can usurp all their business.

Of course, it becomes highly irrational when everyone has this mentality, but it’s the same reason that people speed in traffic and cause more traffic. If everyone agrees, then everything’s great. But if everyone agrees, then the best strategy for me specifically is to not agree. But then this is true for everyone, so in reality no one (or a lot of people) decline.

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LikesBallsDeep t1_j64bt96 wrote

Sure, there's a bit of playing chicken with your competition.

If you and every other office owner are in the same boat, the question is do you convert first and lose less money waiting, maybe get more incentives, tap into the housing market when supply is still tight, or do you wait till your competitors do it and remove their office inventory from the market, maybe making yours more attractive again.

I think market dynamics have their faults but they're pretty good at finding that balance through pricing pressure, so I don't actually see this dilemma as a major concern. Or at least, it's not a reason to move forward with these conversions as an option.

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newestindustry t1_j614ly9 wrote

>If office building owners don't want their property used for residential, what will the City do? Seize the property? That will mire the City in years of costly litigation, and by the time it's settled, new housing buildings could be halfway done.

If the office buildings are empty, as they are now, why wouldn't the entities who own them want to allow for conversions to residential? Do you think they're going to wait around forever for office tenants who aren't coming?

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OrangeSlimeSoda t1_j615jpd wrote

We're currently seeing carrot-and-stick attempts by office tenants to compel their employees back into the office. Office occupancy was at about 47% at the end of 2022, and probably won't go above 60%. What we will likely see is re-negotiated leases to the benefit of commercial tenants. We might see some of that space converted to other uses - yoga studios, medical offices, classrooms, etc.

There's a bunch of reasons why office landlords won't want their offices converted to residential. First, the cost of converting them into a dorm-like situation would offset the benefits. Second, their lenders might bring a lawsuit against them depending on what their mortgage says. Third, there's a bajillion liability issues that comes with it, in particular ensuring the physical safety of tenants (I can't imagine many single women would feel safe living like that). Fourth, there's a far greater likelihood of damage being done to the building if it's used for residential purposes. Fifth, existing commercial tenants won't like sharing the building with residents living in what are effectively dorms.

As I mentioned in another comment, trying to compel office landlords to convert will be an expensive and time consuming process. I think that that energy and cost is better served in an aggressive re-zoning effort, which is one of the major impediments to building affordable housing in the City.

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newestindustry t1_j617n4v wrote

>There's a bunch of reasons why office landlords won't want their offices converted to residential.

All of these hinge on the offices being converted into dorms, which I have never seen anyone but you suggest will happen.

>As I mentioned in another comment, trying to compel office landlords to convert will be an expensive and time consuming process.

I think letting your office space sit empty while you look for nonexistent tenants is also an expensive and time consuming process.

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OrangeSlimeSoda t1_j619f7d wrote

> All of these hinge on the offices being converted into dorms, which I have never seen anyone but you suggest will happen.

Because the cost of gut-renovating office spaces into fully-function housing units is cost-prohibitive. Merely from a physical standpoint, it would entail ripping down and re-erecting walls, re-wiring things, upgrading plumbing, providing gas, re-configuring things to work around elevator banks, etc. Turning them into dorms is the most cost-effective and expedient solution for a landlord.

>I think letting your office space sit empty while you look for nonexistent tenants is also an expensive and time consuming process.

The office landlords really don't have a choice. They are bound by legal obligations to their lenders, municipal regulations, and zoning laws to only allow their spaces for offices. It would be more expensive to convert the office space into a residential unit than to try to flip it to a different kind of office use.

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newestindustry t1_j61bisc wrote

OK well I'm gonna be real with you, I think you kind of just made this whole dorm thing up. NYC has been converting office to residential in Lower Manhattan for decades now, none of them are dorms.

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Needs0471 t1_j620vvv wrote

Yeah, this whole sub thread is just bullshit. It’s not like the task force that wrote the plan is ignorant of the very obvious challenges.

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Evening_Presence_927 t1_j64dimr wrote

This is the same administration that wants to forcibly hospitalize homeless people without expanding outpatient care. I wouldn’t put it past them to be that stupid.

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Revolio_ClockbergJr t1_j61monk wrote

> Merely from a physical standpoint, it would entail ripping down and re-erecting walls, re-wiring things, upgrading plumbing, providing gas, re-configuring things to work around elevator banks

These are all things they would do anyway. What else does “conversion” mean, if not these tasks?

Skip gas, do electric. Plumbing would be weird but nothing that hasn’t been done before.

Yes, dorms are more cost effective… until they sit empty like the offices.

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Evening_Presence_927 t1_j64drl2 wrote

I think they’re saying it would take far more resources doing that than simply tearing the building down and doing it from scratch. Office buildings are built to hold, well, offices, not apartments.

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LikesBallsDeep t1_j61hab6 wrote

Nobody's saying gut renos are cheap but.. have you seen the price of getting ANYTHING new built in NYC in general?

Very expensive can still be better than absurdly, astronomically expensive for a new build.

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brownredgreen t1_j6137gt wrote

I dont believe that the private sector is the solution.

I dont care if they are on board.

Housing, like healthcare, is a 100% MANDATORY HUMAN NEED

Maybe having MANDATORY HUMAN NEEDS being a profit machine for.rich fucks is a bad idea.

If building owners want their property to sit vacant, that's their decision, sure.

We should definitely pass a Vacancy Tax tho, to encourage them to get on board.

They wanna just pay absurd taxes on empty buildings paying them no rent? Their.choice.

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OrangeSlimeSoda t1_j614nrx wrote

I'm not arguing that housing is a mandatory right, but the plan simply isn't feasible because of (1) physical issues (i.e. how the building is built - and don't even get me started on the personal safety problems that this would cause) and (2) legal issues. If the private sector doesn't want to cooperate, then providing housing at all is far more difficult. The City doesn't build housing, but provides incentives for private companies to do it.

The State allowed a tax bill that provided a temporary tax abatement (not tax forgiveness, but abatement) expire without a replacement in 2022. That will further compound the crisis.

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brownredgreen t1_j615dx0 wrote

The City is capable of building housing tho, right? They have outsourced that to private companies via incentives, but they COULD right?

Trying to find a way for the Owning class to squeeze money out of.people trying to have a roof over their head, is gonna end badly for everyone except the property owners.

Doesn't seem like a good plan.

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akmalhot t1_j61ovyz wrote

have you seen nycha housing and management?

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parkerpyne t1_j61ikz0 wrote

>The City is capable of building housing tho, right? They have outsourced that to private companies via incentives, but they COULD right?

With what money? Neither municipal, nor state nor federal have any. The US at the federal level alone is approaching a trillion dollars in interest payments this year. It's the least productive way to spend money and yet, everyone constantly looks at the administrations to solve problems. Every time they do it, that slice gets bigger.

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damnatio_memoriae t1_j62njzo wrote

yeah but the property owners are the ones dictating the plan so it doesn't matter if it's a good plan or not, it's the plan we're gonna get.

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valoremz t1_j624s6j wrote

Can someone elaborate on why anything has to be done with empty office space? I assume that whoever is leasing the space is still paying for it even if employees aren’t coming in, no?

I’m genuinely curious. What should a government do about empty offices that are not being used but are being paid for? And if they’re not being rented, then doesn’t that simply mean the landlord is still on hook for the monthly mortgage and property taxes?

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damnatio_memoriae t1_j62nsq8 wrote

leases don't go on forever. we're nearly three years into the covid era. certainly leases have expired in that time or been broken, and as time goes on, surely more will expire.

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AluminumKnuckles t1_j6173sp wrote

Would still be faster and less expensive to fit out a building with the necessary plumbing than constructing all new residential towers from the ground up.

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newestindustry t1_j6189xd wrote

This is common sense but all the smart guys here on r/nyc say otherwise.

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LikesBallsDeep t1_j61gt7g wrote

The only real issue with office buildings is probably natural light. All the noise about plumbing etc, like you can't run new pipes.

Even if you have to reserve the middle 10% of the whole building going vertically the whole height and convert that into a utility shaft for new plumbing, garbage chutes, etc, so what?

As for the natural light issue, yeah you might need to be a bit creative with the floor plans. But this is a city where people willingly live in 10 ft wide railroad apartments so I think it's possible. And if it's really a problem, again, reserve the no light middle portions for amenities, or hell maybe even some creative commercial.

Personally, given how loud midtown is, I wouldn't mind having my living room on the window side of a unit and the bedroom deep toward the middle far from windows. Dark and quiet is a better sleep environment anyway.

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cum-chatka t1_j63dnov wrote

It’s not like residential buildings aren’t usually also just rectangular with windows on the outside. Yes, converting will take a lot of effort but it’s a worthy effort

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ehsurfskate t1_j64edp0 wrote

As a building design professional I wouldn’t say knowing how to convert class C office space to residential in a manner that makes financial and practical sense is “common sense”.

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newestindustry t1_j64nf8e wrote

Damn, you should go tell your competitors who’ve gotten rich doing it in Lower Manhattan for decades that it’s impossible

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ehsurfskate t1_j64qt2t wrote

Didn’t say was impossible or that I haven’t done renos. We can make anything happen it’s just time and money that needs to be paid by the owner. Also those lower Manhattan Reno’s you are talking about are few in quantity and are very different buildings than the giant midtown office.

Financially design professionals like me would make a killing on these, these cost more to design than new builds in most cases. I can just say I work with these building owners and the financial incentive for conversions of giant midtown offices is not there. If it was it would already be happening on a massive scale.

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newestindustry t1_j64uhxv wrote

When you say "giant Midtown office", I feel like you are immediately thinking of the absolute hardest building to convert, but the plan is to make it easier to convert older smaller office buildings to residential. The stretch of Midtown that's specifically referenced in the article is full of tons of such buildings. This exact type of building has been converted to residential elsewhere in Manhattan.

As for the financial incentives—they aren't laws of nature, they're based on a status quo that everyone in the world knows doesn't exist anymore. They'll change and you'll make your killing. Get that paper!

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oledirtycrustard t1_j66ouiw wrote

hey dummy - those aren't high rise office bldgs

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newestindustry t1_j68wxh0 wrote

>When 70 Pine was built in 1932, it was the third tallest building in the world and served as the headquarters for the Cities Services Company in New York City. Today, the landmarked Art Deco building has been reborn as a modern residential building.

Might wanna Google stuff before you show your ass like this.

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NewNewark t1_j64faqo wrote

This is an idiotic post. Source: Currently living in an office building that was converting to housing. Not only do I have a nice bathroom, I even have an in unit washer/dryer and dishwasher

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Spirited_Touch6898 t1_j64bp9r wrote

>Office buildings simply aren't built to allow plumbing access to each office, for example, so communal bathrooms will be needed. Can you also imagine the mess that a communal kitchen would create? Upkeep and cleaning costs would go up. Many landlords may likely have clauses in their mortgages that their prop

What are you talking about, I know of at least a dozen buildings that underwent conversions. They usually convert them in to large luxury condos, and quite successfully. They have less than ideal floorplans, but overall its very good.

Here is a recent example:

https://onewallstreet.com/the-availability/

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TheAJx t1_j64cx77 wrote

> they could be used for classroom and education, medical uses like doctor and dentist offices, health purposes like fitness and dance studios,

The number of students in New York continues to shrink. The number of commuters in New York has shrunk as well which means the demand for doctors and dentists (people swinging by during lunch or after work) shrinks. Fitness and Dance studios . . . I guess so.

Overall there is not that much demand for commercial space now. I hear your point on the expenses of conversion, but what's wrong with dorm style housing?

There are a lot of people that already live in defacto dorm style housing anyway. Would it be that bad of an idea to offer something that is specifically tailored for that? I agree with you that commercial-to-residential conversions aren't the magic solution, but there is no one magic solution. I think these sort of conversions play a role. Dormitory style housing should be available in NY.

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