Office-to-Co-Living Conversions: A Solution for Downtown Vacancies and Affordable Housing
Patrick Callahan
With a shortage of millions of housing units across the U.S. and office vacancy rates at a decades-high 20%, researchers from The Pew Charitable Trusts and architecture firm Gensler have proposed a new approach to address both issues: converting vacant office spaces into dorm-style co-living residences.
Their report suggests this type of housing could offer affordable options for students, young professionals, and retirees while helping to revitalize downtown areas affected by the shift to remote work.
- Housing Shortage: The U.S. needs an additional 4 to 7 million homes to meet current demand.
- Office Vacancy Rates: The office vacancy rate in major U.S. metro areas is currently at 20%, an all-time high not seen since the early 1990s.
Cost effectiveness of Co-living Conversions
Converting offices to co-living is estimated to be 25%–35% cheaper than standard office-to-apartment conversions.
- By placing kitchens, bathrooms, and laundry in the center of each floor, where plumbing is often already installed, developers could fit up to three times more units than typical apartments.
- Affordable Housing Potential: The study reveals that in cities like Denver, co-living units could rent for around $815, significantly lower than Denver’s current median rent of $1,771. This lower price point would make units affordable to individuals earning well below the area median income.
Potential residents include students, service workers, veterans, newcomers, and others looking for affordable housing in the city. Institutions could even lease entire floors for specific purposes, such as student housing or supportive housing for formerly homeless individuals.
Financial and Regulatory Hurdles of Coliving Conversions
The report notes that private equity investment alone may not support such projects, and co-living conversions may need modest-rate loans, tax credits, or public subsidies. Regulatory barriers also remain: zoning codes in many cities still require parking minimums or prohibit shared living spaces in commercial zones.
