Office-to-Residential Conversions Could Have Positive Environmental Impact

The recent heightened push for office-to-residential conversions that has been spurred in part by the higher levels of office space vacancy due to ongoing remote work schedules and coupled with the increased need for affordable housing, now has another reason to be subsidized — the environment. A recently released working paper by the National Bureau of Economic Research (NBER) “found the upgrading and converting so-called brown office buildings — energy efficient class B and C offices — into green apartments can decrease greenhouse gas emissions by 1.5 million tons, representing an 80% reduction,” which assumes that the resulting apartment buildings are 25% under the 2030 New York City emission cap under Local Law 97. However, financial feasibility without subsidies only pencils out for office conversions to market-rate residential in cities such as New York City, San Francisco, San Jose, Boston, Washington, D.C., and Denver where rents are high enough to overcome building purchase and conversion costs.