Many offices are sitting empty following the rise of working from home, while cities around the world face housing crises. Building new housing is extremely carbon intensive. Could converting unused offices into housing help solve both problems?
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00:00 While many of us are now back in the office, working from home is here to stay.
00:05 For instance, 35% of US workers who can work from home still do.
00:10 But vacant workspaces aren't a new problem.
00:14 Long before the pandemic, aging offices were already becoming less desirable.
00:19 Because there had been for about the last 10 years a trend that we called flight equality.
00:25 Steven Painter, an architect at one of the world's biggest firms, focuses on adaptive reuse.
00:31 People weren't renewing their leases in older buildings, they were going to the new ones that were being built.
00:36 Because they offered the kind of amenities, the kind of locations people wanted.
00:40 All these empty offices aren't just a waste of space, they mean less rent for owners, lower tax revenue, and the decline of entire neighborhoods.
00:49 We have beautiful buildings, we have the wonderful plazas, we have sort of all of the physical assets.
00:55 We just have vacant buildings, and so you don't see that vibrancy.
00:59 You used to, you know, kind of look down these key corridors and you would see just streams of people, you know, coming down the street.
01:06 And you don't see that as much anymore.
01:08 Lily Lungloey is a planner in San Francisco, another city addressing high vacancy levels.
01:13 Almost 95% of our tax revenue comes from business tax from downtown.
01:20 About 80% of our GDP came from downtown companies in 2021.
01:25 It is our economic engine, and so it needs to thrive so the city can thrive.
01:31 Roughly a third of offices are vacant in the city, the third most expensive housing market in the U.S.
01:37 At the same time, the construction of new housing is causing a whole different host of problems.
01:43 Construction accounts for 13% of global energy-related carbon emissions, more than five times that of the aviation industry.
01:51 In order to meet climate targets, but also other sustainability targets, we will need to actually stick with what's already built.
02:01 Pernilla Hagbert researches urban sustainability at Stockholm's Royal Institute of Technology.
02:07 Even if this new production of housing and buildings is done with very energy-efficient and optimized technologies, this won't be enough.
02:18 We will also need to reduce the total amount of new production.
02:24 And this is what brings us to Frankfurt.
02:27 Here, an office tower built in the 1990s will soon be reborn as around 150 furnished apartments.
02:35 Benjamin Albrecht, the developer's regional European head, believes it's the way forward.
02:44 The environmental factor is obvious since the building's shell is already standing.
02:49 The shell alone usually accounts for about 50% of emissions during construction, a fairly significant portion.
02:58 But it doesn't only save on emissions.
03:01 Revamping an office building can be up to 30% cheaper and construction can be done in half the time.
03:07 But it varies. This one wasn't much cheaper than a new build, but faster.
03:13 I think the time factor is really critical. It allows us to start generating rental income from the property pretty quickly.
03:21 Repurposing an old building to serve a new function is called "adaptive reuse" and can extend a structure's life.
03:28 Think of turning old factories into artists' lofts or warehouses into ubiquitous street food halls.
03:34 But retrofitting an existing structure is a lot more complicated than planning everything from scratch.
03:39 As developers have found out, apartments and offices aren't always a one-to-one fit.
03:44 It depends on when and where they were built.
03:48 Modern open-plan offices weren't built for living in.
03:52 First, you have to divide up large areas while ensuring rooms get enough sunlight.
03:57 And you can't just have one big bathroom for a whole floor.
04:00 Each room needs ventilation, heating and power, too.
04:05 And for all you know, the old building is full of asbestos.
04:10 I call them the surprises that always pop up with conversion projects and push costs up.
04:17 Though I will say, we were pretty lucky with this project.
04:21 Steven Painter, the adaptive reuse specialist, has even developed an algorithm to measure whether offices are good candidates to be reincarnated as housing.
04:33 So it looks at over a hundred different aspects.
04:36 Some of the key ones are things like the distance between the elevators and the windows.
04:41 You want your one-bedroom apartment to have a nice bedroom with a window and a nice living space with a window.
04:47 And then have maybe the kitchen and the bathroom at the back.
04:51 That's great.
04:53 A lot of office buildings actually have way too much space between the elevators and the glazing to make that happen.
04:59 This means to end up with shiny new apartments, many conversions essentially rebuild everything except existing foundations and facades.
05:07 These constraints make many offices just too much work to convert.
05:11 According to Painter's research, roughly 30% of offices are ideal candidates.
05:16 If you look at the U.S. market where we're doing all of this work, there's about 100 billion square feet of office space.
05:25 And if you convert just the vacancy, about 7% of that, you could create between 6 and 7 million new homes.
05:32 But just turning offices into apartments isn't going to be enough.
05:36 Neighborhoods that are just office blocks can be a bit inhospitable.
05:40 Crawling with finance bros by day, morphing into ghost towns outside of business hours.
05:45 Ensuring people live, not just work there, could change that.
05:49 Like in this district of Frankfurt.
05:51 Once filled just with offices, now it's residential.
05:55 It would have been interesting to be there on a Saturday afternoon.
05:58 You'd be totally alone. All of the infrastructure was unnecessary.
06:02 The tram was still running even though it was empty.
06:05 Frankfurt rezoned the area, turning parking lots into green spaces and kindergartens.
06:11 More apartments and shops are under construction.
06:13 In the end, there will be 6,000 apartments here.
06:18 Now that the area is livelier, offices have actually become more attractive, so it's easier to rent them out.
06:24 The Canadian city of Calgary, which started working with Painter to revitalize its downtown in 2021, is a case in point.
06:34 Calgary had about 38% vacancy in their office market.
06:38 And that was at the time one of the worst in the world.
06:41 They very quickly actually put a program together, which gives you $75 a square foot to convert the building.
06:47 And moved all of the red tape out of the way to make these projects move more quickly.
06:51 The first five projects are now under construction.
06:53 It represents about 750 new homes.
06:57 And they have 10 more approved.
07:00 Much of this housing will be affordable and built with families in mind.
07:05 However, adaptive reuse often has even more red tape than new builds.
07:10 Painter says that'll have to change.
07:16 So if you take Toronto where I am as an example, there's a rule in all of downtown that you cannot remove office space.
07:23 It's protected as employment lands.
07:25 That was created in the 70s and it just never got updated because there was no need to change it.
07:30 Well now there's a desperate need to change it and it's kind of holding up these projects happening.
07:35 Such arbitrary regulations are quite common.
07:38 And approval for conversions often takes as long as it would for a new build, even though the structure's already in place.
07:46 According to recent studies, cities all over the map have lots of office space that they can potentially convert.
07:53 Frankfurt did it with careful city planning.
07:57 And the more that's learned implementing such projects, the greater the savings.
08:01 Many property developers have already expressed an interest.
08:04 Cities like San Francisco and Calgary already support this very promising approach.
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