Could Silicon Valley’s unused offices be repurposed for homeless citizens?
Silicon Valley office space vacancies remain high post-pandemic, despite nationwide rates leveling out. Would it be beneficial and realistic to kill two birds with one stone by converting empty offices for unhoused residents? While it has been successfully enacted on local individual bases, repurposing office space is not without drawbacks and reasonable criticism. Multiple perspectives from various press below.
Across the United States, we are facing an excess unused office space problem. The Wall Street Journal describes this issue, only worsened during the recent pandemic.
Office leasing tends to be highly dependent on the health of the economy. During recessions, companies often cut costs by laying off workers, meaning they need less space. Rising interest rates also hurt office landlords because they tend to push down property values.
The last three recessions all led to a drop in office occupancy, according to data from Moody’s Analytics.
Thanks to more office supply and companies squeezing more employees into smaller spaces, the share of U.S. office space leased today is far lower than it was at the start of the 2001 recession or the subprime crisis. While office demand continues to be strong in many Sunbelt cities, vacancy rates in cities like New York, San Francisco and Chicago rose during the pandemic, in some cases to the highest levels in decades.
Read the whole thing here.
In the Silicon Valley, downtown Class A office vacancy rates are at 16.3%*, according to Colliers’ Q1 2022 U.S. Office Outlook report—despite their acknowledgement that:
Following close to two years of pandemic-driven correction, signs of stabilization emerged in the second half of 2021, with positive net absorption for two successive quarters… Stabilization is set to continue as more employees return to the office in the second and third quarters.
Read the whole thing here.
*Suburban all classes: 10.2%. Suburban class A: 11%.
Earlier this year, San Francisco observed spiked-up office vacancy statistics. SocketSite summarizes the latest findings:
Having inched down to just under 20 percent at the end of last year, the effective office vacancy rate in San Francisco ticked back up to a pandemic high of 21.7 percent in the first quarter of 2022, representing 18.7 million square feet of vacant office space in the city, including 5.3 million square feet of space which is technically leased but sitting vacant and 13.4 million square feet of un-leased space, according to data from Cushman & Wakefield.
Read the whole thing here.
Local legislators have proposed an innovative solution to San Jose’s homelessness and office space glut issues. Ray Bramson of the San José Spotlight examines the Neighborhood Homes Act and implications for housing construction:
Senate Bill 6, known as the Neighborhood Homes Act, creates an opportunity to replace vacant or underutilized office or commercial property with new, multi-family affordable housing developments. While it won’t force developers to build housing over retail, it does get all of the local zoning and land use issues out of the way to clear a path for a considerable number of new homes.
Read the whole thing here.
The Mercury News details the advantages of this solution, highlighting how an East Bay building was repurposed for the homeless community:
“There’s just a ton of opportunity out there to use some of these less-than fully occupied buildings and reposition them as part of our broader housing solution,” said David Garcia, policy director for UC Berkeley’s Terner Center for Housing Innovation, who recently co-authored a report on the subject.
Even so, converting an office building into a place to live is an expensive, labor-intensive proposition – and not all buildings are suitable candidates.
But the San Pablo project, a partnership between Contra Costa County and a local developer, makes sense as a way to breathe new life into an old building while also getting people housed more quickly and for cheaper than new construction, according to those involved.
“This is really an innovative way to start to build housing as quickly as we possibly can,” said Lavonna Martin, deputy director of health services for the county.
Read the whole thing here.
However, these (and similar) ambitious attempts to utilize existing office buildings for homeless housing are not universally praised. Some view these projects as fiscally or logistically unfeasible, as explained in an NBC News article:
[Architect Strachan Forgan purports that] even though San Francisco commercial office buildings are emptier than they have been in decades and the city is estimated to have 8,000 homeless people, it's unlikely that any of the empty offices will become homes for anyone at any economic level, even though more housing is desperately needed in general. Forgan, who both works on office-to-housing conversions and struggles to find employees who can find affordable housing to work at his firm, said it's too difficult to make happen…
Even in cities like San Francisco, where homelessness remains a major challenge and office vacancy is relatively high, developers, property owners and city officials don't think conversions make financial sense in the long run.
"There's definitely an incentive for cities to continue to promote vibrant central business districts that are centered around employment," said Manan Shah, an architect in Oakland, California, with Gensler, a firm that has worked on and studied such conversions for years. "We would need to see a long-term trend and vacancy was high for a number of years for somebody to take the time to go through the conversion process."
Read the whole thing here.
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