American Cities Have a Conversion Problem, and It's Not Just Offices

Image

Image

It would be a great idea to convert an old office building in Lower Manhattan into apartments. The 31-story A.I.G. building has many windows and is shaped to accommodate extra corner units. It could house 800 to 900 apartment units in a city that has too few housing options. One office, not too different from this, has been converted into housing across the street. Another is in the works.

The problem with 175 Water Street is that it has an issue: offices in the Financial District are exempted from some zoning regulations which make conversion difficult -- as long as they were constructed before 1977. This one was constructed six years late in 1983.

Richard Coles is the managing partner at Vanbarton Group. The company has been responsible for both of the conversions on the other side. Vanbarton also owned 175 Water and considered converting it. Mr. Coles stated that a simple stroke of the pen would be enough.

This idea, as well as the rest of Governor's housing plan, died this spring in the State Legislature. Vanbarton sold the property when it concluded that no changes were coming.

This city block is a sign of a much larger problem than merely the failing office sector. The city in question has not evolved despite the fact that so many things have changed -- the needs and wants of its residents, the economic climate, the rise of threats such as the housing crisis, or the effects of climate change.

Healthy cities need to build new things, and renovate old ones. They also do regular transmogrifications, transforming existing building blocks to something else. Loft apartments are created from factories. Waterfronts that were once industrial are now public parks. Warehouses are now restaurants and start-up offices.

This pandemic forced American Cities to temporarily make these transformations. The cities turned sidewalks into restaurant, parks into hospital, and streets into open space. On a larger scale and for a longer period of time, they'll need to transform offices into apartments, hotel rooms into affordable housing. They will also have to turn curb parking into bicycle lanes, roads into transit routes, and office parks into actual neighborhoods.

Ingrid Gould Ellen is a professor at N.Y.U. who teaches urban policy and planning. She said that the last few years taught her the importance of flexibility and the ability to be surprised by the ways we use space.

Over the years, this flexibility has been eroded.

American cities are experiencing a problem with conversion.

The rules are a thicket

This problem is a complex of interrelated problems.

The zoning codes are becoming more and more restrictive. We have added speed bumps, such as environmental reviews and meetings with the public, to development. These are often used to protect narrow, societal interests.

Today, we ask a lot more from buildings than in previous decades, such as that they are accessible, durable, earthquake and hurricane proof, and that they provide public space. While each new goal is worthy, it increases the gap between what regulations require today and buildings built decades ago.

We've also developed more rigid ideas over the years about the built environment. For example, we believe that housing will continue to increase in value, and that politicians are responsible for ensuring that this happens. Property owners even have a veto right on any changes that occur around them.

What is the cumulative effect if you wish to convert an office into a home office or your porch into a private office today? The building code prohibits it. Or, the zoning. Or your neighbors. Or an old state law phrase. Or, the politicians who were asked to change this phrase declined to do so.

Emily Talen is a professor of Urbanism at University of Chicago. She has studied the zoning or "mother lode of city laws".

Image

In many cities, these rules specify how many parking spaces are required per 100 square feet for pawnshops (different than the parking space needed per 100 square feet for furniture stores). These rules specify the architectural flourishes that builders must use, the minimum amount of land a house can occupy or the sizes of the individual apartments in an apartment complex.

Many mandates today are no longer in line with their original intention. (Keeping slaughterhouses far away from houses?) (Avoiding people living above wood-burning stores that could catch fire)

Professor Talen stated, "You've lost sight of the kind of city that you are trying to achieve with all these rules."

Conversions are hampered by these rules. A hotel in New York must have a rear yard of 20 feet. A residential building, however, requires a 30-foot rear yard. Does this mean that developers should chop off the backs of hotels in order to build housing? Why do we make such a distinction between the buildings that people use for short-term sleeping and those that people use permanently? In most American cities, there was no distinction like this a century before.

Why would we allow one building to be converted into housing, but not another?

Lower Manhattan's 1977 threshold (and 1961 for other parts of New York) is important because the zoning laws in that area allow office buildings to be bigger than residential ones. The result is that only half of the A.I.G. Buildings can be legally converted into housing.

It may sound silly, but older buildings can be converted into homes, and the requirements for light, air, and yard are relaxed. The city gave them a little bit more flexibility.

It is rare that this happens.

It's clear that over the past century, zoning code has only grown longer and more complicated, said Sara Bronin. The original 1916 New York code was 14 pages. It is now nearly 3,500 pages.

Phil Wharton is a New York developer. He said, "I have a term for that buildup." I call it a kludge.

No is the norm

This story is not just about laws and formal regulations, but also about the politics and cultures that have developed alongside them.

For example, city transportation officials are not required to convene public meetings to discuss each bike lane or to consult with nearby property owners when deciding on bus routes. The cities have the power to change public spaces and streets for the good of all. But it happens often that the same thing occurs -- either a neighbor says no, a local politician says no, or someone threatens to sue. The city gives in (or spends years trying to avoid it).

Noah Kazis is a law professor at the University of Michigan. He said that informal forces can be just as powerful and difficult to change as legal codes. It's possible for legislators to change a law that limits the density of residential building, but it is a much bigger task to eliminate the notion that homeowners nearby have the right to veto the density.

Urban renewal is partly responsible for this cultural resistance to change and deference towards neighbors. This is also due to Americans' increasing reliance on property as a means of building wealth. The more people rely on property values rising, the more likely they are to resist any changes that might hurt them.

Professor Kazis suggests that Americans are also becoming more conservative in their views on change, as the society has become richer.

If you look back 70, 100, or even 150 years ago, it was generally accepted that the design of housing or neighborhoods was not up to standard. He said that people didn't even have plumbing. "How you fix it might be up for debate, but whether or not to fix it was kind of a no-brainer." It's no longer true.

The number of possible changes that we all can agree on has decreased.

Individuals and cities have also found that inflexibility is profitable, or at least economically feasible. Property values and tax revenue are boosted by scarce housing.

Eric Kober, former senior fellow and long-time official at the Manhattan Institute and the New York Department of City Planning, says that people in cities like San Francisco or New York realized they did not need to grow and develop new things to prosper. He said that the fiscal reality of cities like San Francisco and New York influenced people to say no.

He said, 'It is a box we've gotten into.' We may not be able to find a solution until something very bad happens.

He said that the pandemic, homelessness crisis, and high office vacancies are not yet a thing in New York.

Image

A good example: the pandemic offered nonprofit developers an opportunity to convert shuttered hotels to affordable housing. Breaking Ground, an affordable housing nonprofit, believed it had found the perfect property. The Paramount Hotel, in Midtown Manhattan was near Breaking Ground’s homeless clients, and in a neighbourhood where they hadn’t been able afford real estate for years.

Eventually, the deal fell through due to objections by the local hotel workers union. There are no more bargain hotels. None of the hotels in Manhattan has been converted into affordable housing.

Brenda Rosen, president of Breaking Ground, said, "There was an opportunity here -- a limited-time opportunity -- that we and others likely missed."

The city opened an emergency shelter at the Paramount in the first half of this year.

We are at a different time

The rules that allow office conversions in Lower Manhattan are from an era that has echoes today. The financial district was hit by a recession in the mid-1990s. Wall Street lost banks due to mergers, and modern offices were being built elsewhere. The fear was that there would be a surplus of old, vacant buildings in what used to be the most valuable real-estate in America.

The city's reaction at that time sowed the seeds for the transformation of the Financial District into an area where more than 80,000 residents live today.

Image

Image

Carol Willis is an architectural historian who runs the Skyscraper Museum. She said that there used to be a belief among the public that they could trust their government.

She said that today, "we are in an entirely different moment."

As the built environment became less flexible, the way we live has changed in a completely opposite direction. Now, many people want their home to function as an office and their offices to look and feel like a home. They also want spare rooms to work like hotels. Many people today consider nearby stores to be an amenity, and not a nuisance.

Amit Patel, a designer at Dialog, who has worked on many conversion projects, said: 'The way that we live isn't about separating these things out - they're more integrated.' The difficulty is that the physical infrastructure we live in cannot keep up with our activities.

To solve this problem, we must first agree that a city that is more agile will be better.