Can Empty Offices and Hotels Help Alleviate the Housing Crisis?

Adaptive reuse has long been deployed to turn warehouses into city lofts and abandoned churches into historic homes, but the ongoing pandemic has created opportunity for a more seismic shift in the way we repurpose and rethink all types of spaces—from workspaces and hotels to homes and schools. 

Over the past six months, COVID-19 has both exacerbated the preexisting housing crisis and created an unexpected glut of empty offices. Back in August, Moody’s Analytics reported that "national vacancies [in commercial real estate] will rise past historic highs within the next few years," with the vacancy rate hitting a whopping 19.9% in 2021.

Other sectors, like recreational and hospitality real estate, are facing a similar reality. A late-August analysis from the American Hotel and Lodging Association reveals that about 65% of hotels remain at or below 50% occupancy—not to mention the economic fallout of four out of 10 hospitality workers being out of a job. And most worryingly, international nonprofit The Aspen Institute reports that some 30 to 40 million Americans may be facing eviction in the coming months.

So the million-dollar question is: Can vacancies in the commercial and hospitality sectors be leveraged for other needs? 

Of course, the solution won’t be as simple as that, but a growing number of initiatives do aim to convert disused buildings into desperately needed housing. In late June of this year, California Governor Gavin Newsom announced Project Homekey, a continuation of the state’s efforts to protect the homeless population during COVID-19. It allocates $1.3 billion for the state and counties to purchase hotels, motels, vacant apartment buildings, residential care facilities, and tiny homes to serve those experiencing homelessness.

"We’ve long dreamed about scooping up thousands of motel rooms and converting them into housing for our homeless neighbors," says Governor Newsom in a release. "The terrible pandemic we’re facing has given us a once-in-a-lifetime opportunity to buy all these vacant properties, and we’re using federal stimulus money to do it. Hand in hand with our county partners, we are on the precipice of the most meaningful expansion of homeless housing in decades." In late September, Governor Newsom announced an additional $137 million in funding for Project Homekey.

Though the results of Project Homekey remain to be seen, the model isn’t entirely novel. In Branson, Missouri, Plato’s Cave is a former Days Inn that has been recently converted into 170 affordable studio and one-bedroom apartments that rent at $495 and $695 per month, respectively. It’s the first phase of what is anticipated to be a six-building affordable housing complex with over 400 renovated apartments. 

While hotel-to-residence conversions take advantage of existing infrastructure, like readily adaptable plumbing and ventilation, office buildings are also being adapted in major cities like New York and Chicago. Brooklyn Borough President Eric Adams, for example, is in support of converting empty offices into affordable and market-rate housing. 

Smaller-scale changes have begun to take shape, too: In the Streeterville neighborhood of Chicago, the owner of the 57-story Optima Signature tower, which is primarily residential with commercial suites typically used as coworking spaces, has converted some of the building’s office space into classrooms for learning pods to use during the pandemic. The "micro-schools" will have Wi-Fi and regular cleanings, and are available to non-residents.

The adaptive reuse of buildings not only fills immediate needs, but also has benefits from a sustainability standpoint. According to the Gensler Research Institute, "Reusing existing structures—rather than building anew—usually results in lower environmental impact," and regular structural grids and open floor plans—a mainstay of many office buildings—tend to be some of the most flexible, easily converted spaces. Even if portions of a building need to be dismantled, "deconstruction, rather than demolition, often saves 95% of a building’s materials."

The coming shifts in the urban fabric have a precedent in the period spanning the 1960s and ’80s, when U.S. manufacturing moved abroad and prompted factories to transition into artists’ studios and lofts. In places like New York City’s SoHo district, 19th-century cast-iron buildings turned into live/work spaces for the likes of Donald Judd and Dan Flavin. This neighborhood-wide evolution ultimately re-characterized the area as a hotspot for art and entertainment, and later a booming retail corridor—in part due to the high quality and flexibility of existing building stock.

As evidenced by the projects already underway, we could be looking at another large-scale conversion of underused spaces. For educational and residential facilities in particular, adaptive reuse has real potential. 

"There are multiple under-utilized offices and vacant storefronts we could activate for mini cohorts or learning pods," says architect Kami Kinkaid, K-12 practice leader at Perkins & Will. She emphasizes the flexibility of open floor plans and clustered seating, as well as the ongoing importance of spaces like public libraries that provide communities with free high-speed Internet and, importantly, distraction-free environments. The general consensus is that adaptive reuse has the potential to be a real solution for our post-pandemic reality, as long as builders keep affordability, equity, and safety a top priority.

Related Reading: 16 Amazing Adaptive Reuse Projects That Will Make You Look Twice