The pandemic is over but downtowns are still hurting. As people continue to work remotely, office buildings suffer historically-high vacancy rates. Restaurants and shops that formerly had steady customers struggle to stay afloat. The declining value of commercial properties is stressing public budgets as well as private owners.
But fortunately, many cities are seeing these vacant or underused buildings as a golden opportunity to transition from the office/retail monocultures that have characterized many downtowns in the past using commercial-to-residential conversions. In addition, some of the vacant or near-vacant downtown properties are selling for a fraction of their pre-pandemic value, making this an ideal time for far-sighted developers to make a huge difference in the future of cities.
Building conversions make more efficient use of existing downtown infrastructure. Conversions maintain the energy already embedded in existing buildings and avoid the additional greenhouse gas emissions required for new construction. These converted commercial buildings also help create the residential densities essential to supporting retail, entertainment, and cultural venues as well as building downtowns that are friendly to walking, bicycling, and public transportation. In other words, they can help bring dying downtowns back to life.
In prior pieces in Ecocities Emerging, I wrote that older, pre-air-conditioning office buildings were preferred for residential conversions because they often have smaller floor plates, greater use of openable windows for light and ventilation, and are more likely to qualify for tax credits available for the restoration of historic structures.
But some developers are finding ways to convert newer, existing buildings, including ones with large floor plates. In one design, 150-square-foot micro-units line the perimeter of each floor to take advantage of natural light and air. These units are big enough for a bed, desk and closet. The interior of each floor holds the bathrooms, kitchens, recreation areas, and living room space, features that presumably do not demand access to natural light and air. This interior location also facilitates conversions by avoiding the relocation of water, sewer, and much other pre-existing infrastructure.
Admittedly, this layout is reminiscent of college dormitories, a design that not all graduates may remember fondly. But office-converters are betting that the lower rents ($500-to-$1,000-per-month), will more than offset the inconvenience of semi-communal living, particularly in big city downtowns where the rent for traditional residential units may be out of reach for those just entering the work force. As one possible indication, post-Covid, downtown Chicago is the fastest growing neighborhood in the Windy City.
Some cities want to attract and retain families as well as young people in their downtowns. Kids need schools, kid-friendly public space, and three-bedroom housing units. So say some experts including Brent Toderian, the former planning chief of Vancouver, British Columbia. To make that happen, Vancouver requires 35 percent of all new apartments to be two- or three-bedroom with at least ten percent three-bedroom. The city also gives bonus density when developers provide and/or fund daycare and schools. These requirements seem to be working: about 7,000 kids now live in downtown Vancouver.
One architect argues that larger-floor-plate commercial buildings lend themselves to residential conversions because they provide loads of extra floor space for amenities. In Lower Manhattan, Pearl House, a 1970s office tower has been converted to 588 residential units, including 30 two-bedroom units. Even though this conversion does not adhere to the three-bedroom rule of thumb, it fills its ample interior floor area with amenities that seem attractive to families with kids, including a playroom, sports simulator, arts and crafts studio, and maker space. Similarly, the conversion of the former Pfizer corporate headquarters in Manhattan will offer 100,000 square feet of amenity space for its 1,600 apartments.
For decades, cities have been urged to diversity their downtowns in order to create 24-hour neighborhoods where people can reach employment, stores, recreation, and cultural events, ideally without the need to own or use a car. Some cities had some success with that. Many did not. But, as with other crises, the decline of the commercial real estate market may be creating a golden opportunity to remake downtowns into vibrant places where people want to live as well as work.
Notes
Mortice, Zach. 2025. Struggling Downtowns Are looking ti Lure New Crowds. Bloomberg – CityLab. Accessed at Downtowns Like Chicago’s Loop Could Stage a Residential Revival – Bloomberg.
