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Saving America’s Struldbrug Office Towers with Housing? 

6 min read

Four years after the response to COVID-19 emptied downtown high-rise office buildings of workers, leaving some towers furnished shells empty of life or commerce, why hasn’t the prophesied breakthrough of office-to-residential conversions appeared?   

After all, the case for conversion is compelling. Post-COVID office buildings are pathetically underused, and the balance of power between employees and employers has permanently tipped to hybrid or flexible work. Workforce housing is desperately needed, and mayors are wringing hands, twisting arms and floating new taxes (all to little effect so far). Shifting the downtown from an eight-hour monoculture to an 18-hour multiculture (work-live-play) will breathe social and economic life back into urban cores that depend on giving people experiential pleasures irreproducible via Zoom or the Amazon box. Compared with new construction, retrofit or substantial rehab is not only much greener, but it can also be much faster, and it mutes the otherwise fierce NIMBYs (Not In My Backyard).  

After all, obsolete and empty brick buildings have long been a staple raw material of affordable residential conversions ever since the 1970s. Grande-dame hotels, warehouses and factories were designed and built for flexible internal reconfiguration, with high ceilings, tall windows, big wood beams and regularly placed structural columns – all of which made the conversion to residential manageable. Roaring 20s Modernist buildings went ultra-vertical before the rise of spine-and-curtain-wall construction, so they narrowed as they rose higher, resulting in naturally articulated contours, yielding more window area per square foot of interior. If well-located and strongly built, these can be converted into luxury residences.  

Why then are the big office boxes not rebounding? 

Costs: Postmodernist office high-rises adapt poorly to residential. Postwar high-rises, in love with sleek curtain walls, are cursed with big floor plates, thick concrete infrastructure spines and reticulated floor plans. To introduce atria, courtyards or air wells is no mean feat. This further entails snaking horizontal piping into newly created kitchens and bathrooms throughout the structures – or embracing the as-yet experimental opportunities for modern modular to make its appearance in American residential development. A few brave developers, notably the ambitious startup Bluelofts, have attempted such reconfigurations in Dallas and Cleveland, but the resulting floorplans are idiosyncratic, angular and possibly awkward to live in. 

The pioneer of retrofitting offices into residential was the 2018 conversion of New York City’s Woolworth Building, when completed in 1912 was the tallest building in the world. Not only were its top 26 floors converted into large luxury apartments (the bottom 29 remaining office and commercial), but as an architectural cherry on top, the developers wedged a multilevel penthouse into its green-copper pyramid. In 2022, after an eight-year full gutting, the 1931 Art Deco Irving Trust Building was converted into 566 condos. Chicago’s Tribune Tower, a century-old landmark in the Loop, exploited its funky stone setbacks and changing floor sizes to create 56 different layouts for 162 condos, with a ‘carved-out’ courtyard. All these depended on great locations, big iconic structures and lots of money – rare without policy help. 


The policies and politics of office-to-residential conversions are still scrambled. Although many mayors want to see workforce housing appear, the zoning laws and residential building codes they administer were already creaking before COVID, and hollowed-out offices heighten the anachronisms. New York City’s residential code requires natural airflow and large operable bedroom windows, the better to escape fires, which make many large-footprint conversions physically and economically difficult.   

In a paradox only a politician could rationalize, the very cities that most need incentives because their downtowns most dramatically and damagingly emptied continue to pile on taxes or surcharges, such as that levied on the ‘embodied carbon’ used in any new construction or substantial rehab. The developer is hit with a ‘sins of the father’ penance for perceived climatological wrongs of earlier decades. London requires ‘whole life-cycle’ assessments of carbon intensity and California imposes caps on ‘embodied carbon’ from any new construction or substantial renovation of commercial buildings larger than 100,000 square feet. Because the only way to avoid creating more ‘embodied carbon’ is to do nothing, taken to its logical end, that yields the paradox of empty high-rises that no one can afford to revive – immortal but permanently decrepit, urban struldbrugs.   

As empty obsolete malls dot urban ring roads, stranded high-rises join the urban landscape. The markets must clear, but four horsemen stand in their way: 

Pricing. Developers want to convert the economically derelict into workforce housing, but the bugaboo is that current costs, listed above, exceed economic value. For that, acquisition costs must go down and repositioning incentives must go up. 

Precipice. Markets are clear when only prices get low enough, and prices get low enough only when creditors get desperate. Though the pandemic’s economic bite was worst in 2021, multi-year office leases have stretched that pain out, and the precipice is approaching fast. Just short of $1 trillion in commercial mortgage debt is maturing in 2024, with another $3.7 trillion behind it for 2025 and beyond.  

Place. Change will come first to the most desperate cities and the likely if unwilling pioneers will be blue megacities with imploding downtowns. Last summer San Francisco issued a Request for Interest to owners for conversion ideas for underutilized buildings. In April, Chicago’s LaSalle Reimagined Initiative announced that four reimagined office properties were “being advanced for City financial assistance.” 

Plebiscite. Elections have consequences. Chicago’s mayor won’t face re-election until 2027.  San Francisco’s mayor will face the voters this November.   

Let’s see what this year’s municipal voters do. 

David A. Smith is founder and CEO of the Affordable Housing Institute, a Boston-based global nonprofit consultancy that works around the world (60 countries so far) accelerating affordable housing impact via program design, entity development and financial product innovations. Write him at [email protected].