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Someone has to foot the bill for empty offices (economist.com)
40 points by JumpCrisscross 13 days ago | hide | past | favorite | 91 comments

> Die-hard sofa-surfers can be persuaded back to the office with new rooftop pools, pet-friendly concierges and Michelin-starred canteens.

No amount of perks are going to make an office more comfortable than my home. I don't care how good the coffee is or how many pizza days they have, it's not going to make up for wasting an hour or more of my life every day commuting.

I'll never willingly go back to the office.

Ditto. I'm not a sofa-surfer, I'm somebody who doesn't need the office to feel content or have a social life. You can have catered food 3x a day, a top of the line gym, a race track, zipline, whatever you want, and I couldn't care less. I have my home and my family and I have zero desire to leave it for work reasons. Hopefully you have more leverage; I'm not confident my currently remote employer will keep things remote forever. But I've definitely decided that after this job I'll never work an office-based job again if there's anything I can do to help it.

Well, if you had all that cool stuff, I would certainly come in to work to enjoy it on occasion.

But I'm still going to need to come back home whenever I need to get work done.

Not to mention the amount of CO2 emissions from the ritual of driving to a place and back every day, then to a lunch and back. That seems to not be mentioned in this dialog.

Early on in the industrial revolution, companies would send work to their workers for home work. Making cloth and whatnot.

I'm guessing this batch of "pro office" articles is just paid adverts / propaganda from members of the commercial real estate industry to shift perspectives.

If companies were willing to invest, they could do a decent job, but they usually have an open concept with rows of tables and cheap office chairs.

nice to be rich or live somewhere where you can have a nice office space in your home. I've never lived anywhere where my home was better than my office for work. My last job I had 4 workstation class machines at my desk. 2 Windows boxes, one Mac Pro, One Linux workstation. 3 monitors. I don't have room for all of that at any place I've ever lived. In fact I barely had room for 1. Add to that a PlayStation and/or Xbox Dev kit and space for its display.

to each their own

can't wait to get back to the office.

and I'm not willing to go live in some non walking friendly suburbia for a large house.

> nice to be rich

You don't have to be rich at all to have a nice office, you just need the flexibility to not have to be required to live in one of a handful a major metro areas where work is located.

That's why we're in a housing boom, because you can pay 50% over asking for more than 2x your living space, and reduce your monthly housing payment 20% or more.

I'll have saved enough from moving to afford all of the office equipment you describe just in the difference between my old rent and current mortgage... not to mention that every tech company I've worked at would gladly provide that setup to remote employees that needed it.

My home office consists of a laptop, wireless keyboard/mouse, a monitor and a table to put it on. That's all I need. I could even get by with just the laptop if I wanted to or had to. I make good money but I'm nowhere near rich by US standards.

I get it though, everyone has different preferences and/or requirements.

> I’ll never willingly go back to the office.

I think there are alternatives to coming together in person than forcing everyone into an office, which if done with enough enthusiasm would be more productive and enjoyable for everyone.

Teams might be better having mandatory lunches once in awhile at a nice restaurant instead having mandatory onsite office time. Better the team’s performance, the better the restaurant.

Think about the money that having an office costs, and then think about how it could be better spent on team based experiences and growth activities.

When rents were high: I must be paid market value for this property that I bought for 8% of its current value!

Now: Someone must foot the bill for this!

I was recently having the opposite discussion re residential real estate: where I live, there are artifical limits on how rent can be raised, even between tenants. Whatever one's opinion of that policy, it limits the upside of a landlord, but they keep their exposure to the downside.

I'd be curious to know if there are any common restrictions on commercial real estate that limit the upside in the name of some public interest, same as rent control. If this is the case, there may be more of a case for limiting the downside too.

Overall, I do agree with you, and what seems to be the common sentiment here, that investments are risky and the risk should be borne by the investor. But it becomes less clear when the investor is made to pay for some other policies out of their upside.

My policy preference for both commercial and residential real estate is that all rental contracts must include a 1% ownership transfer per year. That way if you rent a place for 20 years you own 20 percent of it. Yes it will shrink supply on the margins and maybe there needs to be some carve outs but I’m sick of seeing restauranteurs etc make a neighborhood cool and then get kicked out with all the value having accrued to the landlord.

Does that mean that if you rent a place for 51 years, you have a controlling interest and can set your rent to zero?

No, when multiple people own an asset the controlling shareholder generally has to act in the interests of all shareholders. The way this might work is that the minority shareholders would be paid out on a property sale.

Anecdotal I admit, but I have a large group of friends who are currently shopping new employment because their company is looking to have them back in the office full time and they don't want that, they want to continue working from home and it is now a line they are drawing in the sand.

In the past 4 weeks I have received 6 resumes for people looking for remote work because they much prefer to live outside the city center and have more room for activities, and they don't want to go back to commuting for hours per day or sitting in traffic.

I'd say after reading about this phenomena in other media, it's fairly common for tech workers right now. I understand the frustration of management to a certain degree, "what do you mean you don't want to come work in this beautiful expensive office now??? We have coffee, video games, etc!"

But the reality is I NEVER wanted to drive an hour for ANY office. I did simply because I had little choice. Now that I have a choice, I'm going to maximize it. It really is all about the travel time for me. I enjoy being in an office simply because it tends to make my day fly by... and I usually return home with great stories to share. But, the cost is way too high (time is money).

When I worked for Overstock, the CEO made such a big deal about this beautiful edifice he had erected.... The Peace Coliseum, it's called. The thing is, no one ever ASKED him to build it. As an engineer, I was quite satisfied at our old rented office space. But I get it, often when you're at that level, the edifice is an extension of your ego.

That is the former CEO, and yes, he was very disconnected from reality most times.

If there is a collapse in the market for office real estate, given the shortage of housing in various US markets, I would not be sad if some of these large office buildings were converted to mixed residential & commercial use. Yeah, being able to live in the same building as where you work and just take elevator or stairs to your employer's office would be an expensive luxury option that probably only upper-middle and upper classes could afford. But, it would take some pressure off less fancy housing options like regular apartments, duplexes, and single-family houses. It wouldn't address the problem of investment corps snatching up any and all residential real-estate they can in the face of other fiscal policies. But, when in your local market, a 1500 sq ft 1960s construction house with little-to-no insulation, yard filled with sun-scorched weeds, and in need of 10s of thousands of dollars repairs to the building envelope goes for half a million dollars cash sight unseen in less than a week after it goes on the market, any policy change that improves the supply and demand equilibrium helps those who just want to live in the available housing supply.

I highly doubt that could be done profitably. The water infrastructure support alone (increased water usage for showering, laundry, dishwashers) might kill it when you consider the sparse "office" kitchenette on every other floor and centralized shared restrooms (without showers) as they're currently designed. Then of course there's HVAC controls, external/internal wall insulation concerns, noise reduction issues, additional wear & tear on elevators through significantly higher usage... You get the idea.

I lived in an ancient finance building that was converted to residential in the 80s. All the layouts were bizarre, twisting around to give every unit the barest slice of window. The bike storage in the basement was a vault with a 24" thick door that was just left there because it would have been impossible to move.

Converting a modern building would be very expensive. Converting a hotel on the other hand -- perfect. They already have plumbing and fire separation. An open plan office is just a shell.

This would be very expensive since commercial office buildings and residential units are vastly different in terms of construction, building codes, utilities, and layouts. Sure, you could chop them up into artist studios and lofts, but they would be extremely expensive.

Oh absolutely. The collapse in the market for office real-estate would have to get particularly bad for the owners of those properties go for that option. The owners of these properties are in the business to make money. If nobody wants their property for offices anymore, they will have to find some new use for their property that they can profit from. The condos/studios/lofts/whatever resulting from a conversion would indeed need to command high rates to make such a conversion worth it. Like I said, the housing created by such an option would be an expensive luxury probably only affordable by the upper-middle and upper classes.

However, given the (IMO probable) positive effects for less-than-rich, I would not protest such an outcome.

I can’t speak to the conversion costs, but let’s pretend there’s a creative solution (modular construction?).

Converting office space to mass market housing could be a huge long term win. Cities like NYC and SF already have a huge shortage of overall non-luxury units which has caused rents in previously less expensive further out neighborhoods to spike. These neighborhoods aren’t super exciting to live in now so they’ll naturally be more affordable to start. Hopefully over time by mixing housing and residential in these central business districts they’ll become more vibrant w/ an economic engine that runs on nights/weekends too.

If commercial vacancies really do spike it may be better for cities to incentivize these conversions rather then let their midtown’s stagnate.

I think if somebody gets creative about it some of that cost can be reduced. Likely the big drivers in cost are going to be running utilities to support different uses (kitchens, showers, etc.) Maybe a new type of living space can exist where kitchens are shared? Or where there is a gym with private spa-like shower/changing space on a lower floor. I'm not saying these are good ideas (I certainly wouldn't live in that sort of place now), but maybe somebody can figure it out.

Even if you have to tear down and rebuild, rezoning and conversion here seems much more politically achievable than up-zoning existing residential areas. On the one hand, you have to fight current residents who would be displaced, as well as their neighbors who don't like change. On the other hand, you have the ability to make the land valuable still by repurposing it for residential instead of having an empty wasted tower.

I guess it's an opportunity cost calculation of convert vs. rebuild. Some affluent areas where the inventory of fancy lofts is low would likely support it, while lower-income areas it would be best to demo and build a giant tower of micro apartments.

I doubt anyone with upperclass wealth will consider moving into a retrofitted office building. The quality of the housing will not be equal to a modern tower. Even running water and waste water will be very problematic. The complete lack of amenities of modern towers built for housing, gym, pool, recreation center, balconies... Depending on location parking could basically be impossible or they have to convert limited office parking into resident parking.

IMO we are more likely to see these become "luxury apartments", which means the expense of luxury minus the actual luxury.

Our building in SF is doing this. All the units are "live work" and previous to the pandemic many were rented out as offices. Now most have been changed over to residential.

This already started happening in some European cities such as Amsterdam. Other places are seeing a huge number of small office locales for sale, such as those you might have seen accountants or lawyers.

I am quite interested in seeing how the pull by employees for more WFH plays out. There is lots of discussion of quitting by people over it, but how many actually will?

I can see that deciding the future of offices. Do employees hold firm on these demands or just return to the office grumbling?

> Do employees hold firm on these demands or just return to the office grumbling?

My career long experience has been that with any major hits to quality of life at a company: not every employee follows through, only the good ones.

While the switch to WFH might be a new issue, there have been continually waves of quality of life changes at companies durning different stages of growth. An obvious one is direct cuts to benefits, but others include rapid decrease in perks offered, change in vacation policy, change of office location etc.

In my experience good employees are quick to change whenever the signal from employers changes from "we respect you are want to reward you" to "we obviously don't care, or can't afford to care".

This happens all the time in startups that lose their trajectory. Snacks disappear, flexible work hours become more rigid, bonuses shrink etc.

So long as there are competitors out there who still offer these perks, good employees will leave often within a few months of the change. This causes a cascading effect where there are less good people on the team, so more and more people leave. Even if you don't care about perks, you care about good team mates.

I have seen multiple companies where after a major shock like this nearly all of the best and brightest are gone within a 6 month window.

What's funny about WFH is that the people that like it, like it so much they'll take a lower total comp to WFH. In the case of all the other perks I mentioned, a company has to pay more to keep them (and top talent). Sometimes it's just not possible to do this. With the return to office you're effectively spending money in drive out your top talent.

I'm sure plenty of companies will still do it, but I also suspect many companies that are looking for an edge will get an easy win by remaining remote friendly.

This is something that has come up within our company (we are still waiting on official guidance). I love WFH, for all the reasons you've read in other posts.

If we have to return, I won't quit. That's reckless, imho. But my resume will be updated and I will be open to remote positions. Many of my colleagues feel the same way.

> If we have to return, I won't quit. That's reckless, imho. But my resume will be updated and I will be open to remote positions. Many of my colleagues feel the same way.

This is what I assumed it would mean. Not that people would spontaneously quit, but that there would be some 30% of the workforce looking to be out the door.

The reason I wanted to be clear about that is I have heard stories about people quitting on the spot.

I believe the delay in my company releasing their plan for return to office has a lot to do with IT. We are having issues with finding enough folks as is. I couldn't imagine what it would be like if 30% put their notice in.

I would assume that number would be substantially higher for at least IT department type workers.

Studies are showing closer to 55% than 30%

>>Do employees hold firm on these demands or just return to the office grumbling?

Many such employees from this vocal minority will be cajoled back by employers allowing 1 WFH day. Perhaps more senior employees will be offered 2 WFH days, which to be fair would cut long commutes down by 40% per week.

In most such scenarios it seems companies will still require enough capacity for "peak" usage and instead of sharply reducing footprints will perhaps only delay their office expansion plans as they grow their staff.

One issue that isn't addressed by hybrid work models is the cost of living, availability of space, and neighborhood character. Those seeking a more suburban life or rural life can make that happen with fully-remote jobs, and in doing so, they can also find cheaper houses, get more land, and have a community that is different from what an urban location offers. But if you still have to to the office a few times a week, then that means you need to live within a commute distance - which limits the kind of lifestyles employees can have.

When it was announced that we were downsizing our offices and everyone was given the option to WFH if they wanted. One of my coworkers has been building his retirement home in a remote part of Maine. He immediately began looking for reliable remote high speed internet options to accelerate his timeline.

Being able to move into his retirement home early would dramatically reduce his cost of living because he would sell his current home and actually hasten his retirement by a number of years.

I don't know. I know a VP Engineering who negotiated a 2 week office / 2 week remote WfH arrangement at his homestead in Oregon. I think people can negotiate if they have the leverage to do so, be it collective action with many "lowly" employees or individual, high-status employees.

Given that my first proper programming job is going to be remote, I feel like I'll not only be less productive since I can get distracted but also unable to really meet the clever and interesting people that I'll be working with (I.e. a Jitsi call is not a proper conversation in my books at least).

As far as problems go it's a fairly "first world" one (as the saying goes), but it is something I think about.

My first programming job was remote (the company had a tiny office at the time) - this was almost 20 years ago to this day. Distractions weren't a problem for me, the main issue was fear of asking questions (i.e. spinning my wheels because I was afraid to appear dumb.) Once I got over it, started asking questions on Lotus Sametime (chat system) - things got better. My only advice to you is...don't spend too long spinning your wheels!

Wheel spinning is good advice! Working alone allows for concentration, not distraction. It also sometimes forces you to reach for resources which are close to figure stuff out. Reading is an old friend!

> I feel like I'll not only be less productive since I can get distracted but also unable to really meet the clever and interesting people that I'll be working with ...

Honestly it's what you make of it. One of the teams I work on presently consists entirely of remote staff now. I originally worked in the office but no one else did, now we're all remote.

The team is by far one of the better ones in our org and everyone gets along really well. It took me a while to warm up to everyone but some of the newer members eagerly engaged the group and have embedded themselves much more quickly.

I don't doubt I can be creative and write good code - I'm a good programmer, and I'm working on something that I'm interested in (I'll programming language implementation to keep it short), it's more of a thing where I like the idea of bouncing ideas off people and kind of maintaining a good separation of ideas - both things I'm not very good at when I'm basically alone at the desk.

The point about networking is quite cynical but I'm working in a fairly nepotistic sector (but well-compensated) so a few connections can go a very long way.

A Jitsi call is totally a proper conversation. You learn by working with developers more capable than you, by getting advice, and most of all by planning feature and solving bugs. None of this needs an office.

The "not getting distracted" thing can be a problem though. It's not for me, simply follow work hours. It's also less an issue I feel when you work closely with another (remote) developer. There will be PRs to review and PRs to deliver, that should motivate you easily. But for the record, you can also get distracted in an office - maybe more easily even.

Your comment hints at something I think will be a major factor in tipping the scale for all-remote or all-onsite: office culture

I know a lot of people twist their noses at the mention of an office culture (it does appear most when it is negative), but the value of positive-culture cannot be underestimated. Teams that bond well work best. Can people bond over video calls?

These are going to be interesting times.

I can definitely bond I just need cues that the call doesn't give me

Your fear assumes that working in an office is going to be the opposite of those things: more productive, less distracted, better socializing. At my first job, all of those were true. My coworkers were rude and unfriendly; I personally find any noise from other people distracting; and I focus better at home because I can take breaks as needed (like lie in bed for a few seconds if my back hurts).

I think if you’re lucky to work with smart people just being in the environment can be fulfilling and enjoyable for the atmosphere even if you’re not directly learning anything. But for actual learning I don’t think the office environment adds much. Pair programming is useful but today’s remote tools are way better than crowding around a desk.

This is a logical fallacy. Studies show that there are fewer distractions at home.

Also, anecdotally, my team lead and tech lead see no discernible difference in their ability to help teammates, and our interns are just as productive and participate in just as many help sessions.

Well if studies show that his home work environment is less distracting than his office, i guess he can't argue with that.

I suspect communication happens better at the office. Not necessarily formal communication - you can do that with a video call or an email - but the other stuff. That snippet of conversation you heard over a cubicle wall or in the break room, that told you about an infrastructure change that your code needed to handle? You're not going to hear that at home. That co-worker who saw you in the bathroom and asked how it was going, and you whined about the bug you were trying to find, and they gave you a suggestion that saved you two days? That's not going to happen at home.

I am tired of hearing about "snippet of conversation you heard over a cubicle wall" nonsense!

NO! We all wear noise cancelling headphones to avoid that so we can ... work, so this is 100% total bullshit.

I'm getting the opposite from my co-worker who spent a year out of the office, complaining about how out of the loop he was. And he's a manager.

Oh, yeah. He was complaining about the noise, pre-Covid.

So your last paragraph seems to be a bit overstated. It may be true for you, but you state it like it's true for everybody, and it's not.

Another point to consider: while one alternative is butt-in-seat mentality, WfH shifts the infrastructure, space, and social/professional networking costs onto employees while increasing domestic efficiencies, cutting commutes, emissions, and transportation costs. It does seems like turning employees into contractors, to a degree, like requiring Lyft/Uber drivers to provide their own vehicles and eat the maintenance and depreciation costs.

I agree with your sentiment to a degree, but I disagree with your implication that any expense spent on work makes you a contractor. Almost all workers have to buy their own clothes, bring their own lunch, and find their own time to sleep and pay for medical needs. Personally I would even buy my own laptop for work if it means I don't ever have to go to the office.

I muddled the point. Not as a contractor literally, but as a "sharecropper" who must provide more things themselves instead of work providing them.

> Personally I would even buy my own laptop for work

This reduces your income if work would pay for it. This reminds me of some jobs where employees have to buy their own uniforms, equipment, etc. as the point I almost made.

> This reduces your income if work would pay for it.

I agree; I guess my personal point is that I don't remotely care about anything as much as I do the ability to wfh. After that is salary, after that is other comp. Offer me a fully-remote job at an acceptable salary and you've got me very interested. In contrast I've flat out turned down recruiters, including FAANG, when I asked about remote opportunities and they say they maybe will do a hybrid model in the future.

At the end of the day if I'm making a good salary and can work wherever I want to in the US/world, nothing else matters to me too much.

Giving employees the choice to work remotely or come into an office is the best approach. There are tradeoffs to each, and it should really be up to the individual to decide what is best for them.

I work for an engineering company, we lease our class A office space in a small professional office complex. We did share the building with an insurance company, they had approx. 50 employees in the building, but they left about a month ago. They decided those 50 employees will be WFH from now on, never to return to the office. The building is very quiet now. The management company laid off cleaning staff, turned off the water feature, and sold the art off the walls.

Running a business takes on risk in return for reward. One of the risks of being a landlord is having no tenants. News at 11.

Buying or building property with the sole purpose of lending it out is an investment, a gamble, a calculated risk.

Same scenario but smaller scale: an individual purchases a domestic property with the purpose of renting it out as accommodation. Due to unforeseen circumstances the area becomes undesirable and they become unable to rent the property, what happens?

They go underwater on the mortgage. The landlord doesn’t get bailed out, they have the property foreclosed on by the lender who goes to recoup some of _their_ investment.

Why should office landlords be treated preferably in this case? This is the risk involved in being a landlord; It’s not a guaranteed money spinner.

Yeah, people who own them. Like people who rent servers pay for the servers that are not being used. Or people who travel pay for their apartments that they don’t use.

Is anyone seriously expecting us to pity lendlords?

This reminds me of the dotcom times. My mom worked in accounting for Harmonic Inc. when they signed a long-term lease for an enormous campus. That was a risky move during a time in the Valley when prices were high and vacancy rates were low. Much of the campus stayed vacant for sometime.

IIRC, what do they call the primary cause of recessions? OXPC - Over eXpansion of Productive Capacity

In residential real-estate, which is more inelastic, it makes intuitive sense that supply (inventory) and demand (occupancy + influx - outflux) moves prices more vigorously; look at SF and NYC.

Someone means the building owners.

"Someone" always, eventually, means the taxpayers.

Not even going into the office ever. The management and credit theif managers are going to put up a huge fight and okay room of mind games about that tho.

I suggest this „someone“ to be whoever would have profitted if these offices were full.

We need to stop privatizing gains and socializing losses.

> We need to stop privatizing gains and socializing losses

Nobody here is advocating this. The article is about measuring how the costs and benefits could get allocated in various scenarios.

Doesn't the office tenant profit while they are occupying the space? They profited more by having more employees and filling more space. (butts in seats, a common measure of corporate size/growth)

The building owners built the buildings to suit the demand of their tenants.

The office tenant is paying someone else to take care of the details of managing real estate, which is a task requiring real managerial skill and should be compensated. The tenant is willing to pay for this because they do not want to spend time and resources dealing with it themselves, their time is worth more doing something else.

So who should pay?

The property owner/manager? They are wholly dependent on the commercial real estate industry for their profit.

The tenant who was previously dependent on property owner/manager to provide space?

Is the tech industry to blame for making WFH a viable alternative, should tech share in the cost?

Should the pensioner invested in corporate bonds fairly take a haircut?

EDIT: Not arguing your point, but there is some nuance that should be brought to light.

I think this is a fair point: say I sign a 5 year lease (no idea what industry norm is), I am presumably getting a discount over whatever the month-to-month or daily rate for rent would be, and accepting the risk that I need to find a way to use the property to make money throughout the lease period.

If I'm the building owner, i probably debt financed the building, and I'm taking on the risk that i can get enough cash flow from tenants to pay my mortgage.

If I'm the mortgage holder (this is my basic understanding) I've turned rue mortgage into some kind of security and sold that to an investor who is taking on the risk that the property owner will pay the mortgage. And there may be shareholders or other parties taking on the risk that whoever owns the securities will remain solvent and pay their pension or whatever.

So it's not super obvious where and how the buck should stop. I own an condo that I rent out. Guaranteed I am in the hook for it - i have no recourse for a tenant that doesnt pay other that maybe an eventual eviction, and the bank will make me sell it if I dont pay my mortgage. I'm the weakest point in the chain above, and that's why I'll have to be responsible. I suppose in exchange for that I'm exposed to more upside than the bank or the bondholders. But it's not clear to me that I'm the one beneficiary who should bear all the risk.

Weren't the two COVID bills passed by congress, each > $1trillion, a socialization of the losses incurred by folks? Wasn't the point of the $1400 (or whatever) checks and extended unemployment benefits intended to make up for losses incurred due to COVID?

REIC's own a lot of office space. A lot of shares of REIC's are owned by retail investors, 401ks, state pensions, etc. Our economy is highly networked.


The fact remains we should not socialize losses.

Insurance and reinsurance exist.

If a single named security falls through the floor because they couldn't pivot from B&M to E-comm, there is no insurance that is going to pay out for an investor's loss (securities fraud aside). Likewise, if you made a bet that's going sour (office space), you are going to eat that loss.


"Insurance" in the financial market is hedging.

Words mean things! Insurance is when you pay someone else to manage the risk, hedging is when you do it yourself. Excuse my pedantry. Agreed that hopefully funds invested in office investment vehicles did not overexpose themselves in reaching for yield (because, heh, offices are sure things, right?), but, you know...

> Words mean things!

Do they? I've always found connotation to be an intimate and flexible concept, and serves as a limiting factor for true communication. Wittgenstein agrees, I think :)

I can pay a hedge fund to hedge my risk.

I'm not aware of the mechanics of how that works. I have a state pension account from a previous job. Does my state pension manager buy an insurance policy? Please explain.

If you're willing to pay, you can get basically anything insured.

https://www.pbgc.gov/ as an example, but a bad one since it (to my understanding) socializing pension fund default.

do you mean REIT (real estate investment trust) which have special tax treatment in the us?


>” A market correction would probably slap [banks] in the face without knocking them out. Instead, more of the bill will fall on equity holders, not least pension funds and insurers which, in their hunt for returns in an era of low interest rates, have been loading up on property for years. The sooner they admit that losses are coming, the sooner they can try to limit the damage.”

So holders of that debt...

Churches and malls were converted to residential buildings. Why not office space?

It would be a lot of work, e.g. just the plumbing for residential (kitchens and bathrooms in every unit) would be very different from plumbing for offices (a few central toilet rooms).

Electric, HVAC would be similar.

However, still could be possible in some buildings and ultimately be worth doing. For other properties it might be cheaper to raze and rebuild rather than try to fit residential space into a commercial-plan building.

Completely agree with other posts that the risk of loss should be squarely on the owners/investors. Property is an investment like anything else, and may lose value. And I'd guess commercial property is riskier than residential.

Just converting a very small share of buildings to mixed commercial-residential might be enough to adjust for the reduction in office demand.

It's been done but very often "class A" office towers lack things which are needed for residential use, like windows that open, balconies, locations in the concrete walls and floor slabs for water and sewage pipes. Even basic things like if you take a floor of an office tower and turn it into 700 sq ft condos, how are you going to ventilate the bathrooms? Retrofit can be very costly.


I have seen some instances of older 1910s to mid 1930s era office towers in NYC retrofitted to (very high end, very expensive) condos.

Yep. It's not practical. It's often better to bulldoze, rezone, start over, and build high-density vertical housing. It's totally SimCity. :)

so? Maybe get some more employees into the public service and if the funds go bust make sure that noone ever can try to play the game by making land public for eternity (land != buildings!).

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