In Chicago, Michael M. Edwards, who runs the Chicago Loop Alliance, a business organization, has seen the trend back to downtown offices stall. He began returning to his office in the spring of 2020 and recalls cycling the streets past covered buildings and empty skyscrapers. As he boarded the train, he noticed the silence, the absence of all the well-dressed businessmen that usually accompanied him.
Mr. Edwards is excited about a plan the city has begun to develop that will use office conversions to create 1,000 housing units, 30% of which are affordable, along LaSalle Road, a big business road. Mr. Edwards argues that with more people living in the city centre, more people can more easily commute to downtown jobs.
He notes that this drive to bring more housing downtown is part of a recent trend: About 40,000 people live in downtown Loop, up from just about 13,000 a decade ago. Apartments in the Loop are renting at higher rates than they were before the pandemic, showing that people are interested in living in that bustling downtown.
Mr Edwards, who used to live in the Loop, said: “You’re in the middle of everything. “It’s a 10-minute walk to work, so suddenly you have two hours to commute.”
In New York, too, some property owners are calling more strongly for conversations about transitioning homes. They note that companies are increasingly looking for new offices with luxury amenities – Grade A spaces – in what real estate agents are calling “flight to quality”. That leaves millions of square feet of lower-class spaces, often built before the 1980s, likely to be vacant.
“Some of these buildings will become ghost buildings,” said Bill Rudin, whose family business owns and operates commercial and residential properties. “The market is telling us all that we need to do something else, imaginative, disruptive, but proven successful.”
Lower Manhattan offers a model of the possibility of turning a commercial neighborhood into a partially residential area. Faced with financial difficulties in the early 1990s, New York State passed a tax relief program, known as 421-g, that encouraged the conversion of old offices into housing. As a result, nearly 13 million square feet, or 13% of Lower Manhattan’s office real estate, was converted into residential space between 1995 and 2006.
