Let us consider adaptive reuse. You can probably relate to the sensation of walking into a small business establishment, say an accountant’s office or daycare center, and immediately recognizing that the building you’re in was once a private home. The dimensions and layout were clearly not meant for commercial use. Such examples abound in smaller towns and cities, particularly along thoroughfares that have gradually morphed into commercial spines. And while they technically constitute adaptive reuse projects, the adaptive parts are minimal at best.

The demands of adaptive reuse go well beyond converting an old parlor into a conference room. These undertakings often stretch the creative boundaries of even the best building professionals. Some of the most eye-catching examples include converting warehouses into office space, shipping containers into homes, and churches into restaurants, to name just a few.

Beyond that, the importance of adaptive reuse is typically framed in terms of historic preservation and conservation of resources. And in our post-COVID era, it has taken on graver implications.

Responding to the need for more housing

America’s housing crisis runs deep. The country’s 5+ million deficit of starter homes and other affordable housing options largely stems from the 2008 Great Recession, a milestone that “broke the U.S. housing market,” according to Ali Wolf, chief economist at Zonda. In the ensuing years, the rate of new homes built annually never rebounded to even half that of pre-recession numbers (peaking at 2.1 million in 2005). Ever since, markets have continually struggled to make up ground. And then came the pandemic.

For what it’s worth, housing starts did increase in 2021 to where experts believe they need to be (1.6 million annually) to keep up with population growth and eventually close the gap on the housing crisis. But that rate of growth was short lived. Notably, the pandemic prompted renewed discussions about adaptive reuse, specifically the prospect of converting vacant office buildings into housing.

U.S. cities are awash in so-called “zombie” buildings. This classification kicks in when vacancy rates and underused space drive overall utilization in a building to 50% or less. In response to this crisis, last June the International Code Council (ICC) formed an Adaptive Reuse Working Group to explore how the International Existing Building Code (IEBC) could better support office-to-residential conversions. Comprising about 30 industry leaders–architects, engineers, code officials, et al.–from all corners of the U.S., the group’s first order of business was to determine what design professionals felt were the biggest feasibility hurdles to making these conversions commonplace.

“Cities across the country have underutilized urban assets. They have high vacancy rates, in some communities over 30%; high enough that many of those properties are not financially self-sustaining,” says Mike Malinowski, a practicing architect, code and regulatory consultant with AIA California, and working group member. In September, his group issued a survey to gain insights from experts in the field. Upon analyzing the results from over 200 respondents, Malinowski isolated responses from those who had actual experience in performing office-to-housing conversions (roughly 50%) and identified the three biggest challenges that respondents cited: cost, financing, and building codes.

He says the first two were expected, but the third was a surprise. “Building codes themselves are a factor,” he says, but he assumed others would rank higher. “There’s a laundry list of other issues like the shape of the floor plate, building height, existing elevator sizes, plumbing, utility infrastructure. It’s a long list of challenges that these projects face.”

The embodied carbon benefit

Malinowski’s CV also includes consulting work that informed CALGreen’s new embodied carbon reduction regulations and compliance pathways, which went into effect last July. One of the pathways specifies building reuse, which demands at least 45% of a building’s structure and enclosure get reused. When it comes to converting any commercial property to housing, “the embodied carbon benefit is huge,” he says. Under CALGreen, reuse projects are “basically a Get Out of Jail Free card.”

Still, Malinowski admits that when CALGreen’s other two compliance pathways–performing whole-building lifecycle assessments or procuring environmental product declarations–come to bear, overall, the newly amended code “probably won’t save many existing buildings” on its own. What’s needed to tip the scales in favor of greater adoption of adaptive reuse are incentives for developers and building owners.

One case study (or cautionary tale if you prefer) where this has occurred is the city of Calgary. The Canadian city recently re-launched its Downtown Calgary Development Incentive Program (launched in 2019), which offers funding to downtown property owners, with reimbursements of $75 per square foot, to help them convert vacant office space–which once comprised a third of the city’s office real estate–into residential units, co-living developments, and other market-driven uses.

The program, along with the Gensler-developed algorithm used to evaluate each building’s feasibility, has been heralded for “cracking the code” of office-to-residential conversions. There’s just one problem. The process for evaluating these assets is evidently quite stringent, resulting in a majority of unused office buildings being deemed “unsuitable” for conversion. In turn, that same incentive program also helps fund the demolition of office buildings in the name of increasing “economic activity, vibrancy and safety” in the downtown area. If you’re hearing the wind blow ‘urban renewal,’ you’re not alone.

“It can take up to 80 years to recoup the carbon impacts of the demo and construction process itself, in operational savings,” Malinowski says. “So, when a community as large as Calgary adopts a model that says 70% of urban office buildings should be torn down because they’re not suitable, well, that’s something I’m pushing against.”

When any vacant office building is evaluated, things like building codes, mechanical systems, and other logistics will weigh heavy on potential stakeholders. But at the end of the day, costs, not carbon, are what drive market decisions. Malinowski would like to reverse that thinking. “In a carbon marketplace, these building reuses would be owed money because of the climate benefits they bring. If you put the money behind what really matters, these projects would pencil out much better than they do if you just look at them in terms of construction costs.”

Making adaptive reuse part of a city’s fabric

“From a design perspective, almost any building can become housing. It’s just a question of economic viability,” says Karin Liljegren, founding principal of LA-based Omgivning Architecture. Liljegren’s entire career has been enmeshed in adaptive reuse projects, as well as advising on policy reforms in service of them. She got her start in this line of work in 1999 when Los Angeles first introduced a new adaptive reuse ordinance, which was then limited to the city’s downtown business district. In the ensuing decade, that ordinance resulted in the creation of more than 14,000 housing units or hotel keys.

Today, Los Angeles has more than 60 million square feet of vacant office space. “That’s not even including retail or underutilized office buildings, of which there is still plenty,” she says. The pandemic certainly exacerbated that figure, which means if current trends prevail, there is little to no hope of that real estate regaining more than a fraction of its pre-pandemic market value as commercial office space. But there is hope.

Within the next six months, the city is poised to release an updated adaptive reuse ordinance that will cover all of Los Angeles, and be closely aligned with California’s Housing Elements law, which requires all local governments to “adequately plan” for local housing needs. This also translates into enacting regular policy reforms that incentivize the creation of new units. This revised ordinance “is making the process by-right” to qualify for development and conversions, Liljegren says. “You usually need to get entitlements for everything, which can take years. So right off the bat you’re speeding things up.”

Assuming a citywide ordinance accomplishes its goal of penciling out more office-to-housing conversions, Liljegren cautions against overthinking things. “A lot of the algorithms out there used to evaluate buildings I think are really a disservice to adaptive reuse. They’re taking a lot of buildings off the table.”

Urban revitalization through adaptive reuse

At stake here is providing enough housing for more and more people in need. New construction alone won’t solve the ongoing crisis, so adaptive reuse must be part of the discussion. The U.S. has close to a billion square feet of vacant or underused office space. You do the math.

There is also the question (and potential dividends) of urban revitalization. But those on the advocacy side want to ensure efforts like the ICC’s Adaptive Reuse Working Group and others don’t inadvertently repeat the urban renewal blunders of the mid-20^th century, when whole neighborhoods were razed – like Poletown in Detroit or Rondo in St. Paul – to make way for highways or other architectural gestures that haven’t exactly aged well. Liljegren expresses some relief that things like sustainability, cultural identity, and the housing crisis have become key talking points when any serious discussion about urban revitalization occurs. “The language has expanded,” she says.

On the logistical side, Malinowski says what’s needed are “better tools” to assess potential risks and rewards of scaling up these conversions. We need funding to accurately study the risk equivalencies of converting these spaces into housing, he says. “Because it is worth it.” He believes existing building codes don’t reflect our current predicament. “Some of them are based on studies and some of them came from a bunch of people that got together 30 years ago” and devised sections of the code “without any science or data.”

“These projects are not easy,” he says. “But when you tear down a building, there’s no going back.”

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