Denver, like many cities, is facing a severe housing shortage that demands immediate attention. With housing options becoming increasingly limited, it is crucial to explore innovative solutions. One approach gaining traction is the conversion of obsolete buildings into residential housing. In this article, we will delve into the potential of property conversions as an effective solution to Denver's housing shortage.
The housing shortage in Denver has reached critical levels, impacting individuals, families, and the community at large. The root causes of this shortage, including population growth, limited housing supply, and rising costs, have created significant challenges for residents. Recent estimates indicate that Denver needs between 13,148 and 30,930 additional housing units to meet the current demand. This shortage has led to skyrocketing housing prices, making it increasingly difficult for individuals and families to find affordable homes. The consequences of the housing shortage extend beyond financial strain, affecting the overall quality of life for Denver residents.
Denver is actively pursuing office-to-residential conversions to address the housing crisis and capitalize on the potential permanence of hybrid work policies. The city aims to repurpose office buildings for residential use, recognizing the value of their existing infrastructure. Currently, a feasibility study is assessing the viability of converting vacant office spaces into critically needed housing units. This approach offers a solution to the shortage by repurposing obsolete buildings, creating new housing opportunities without encroaching on undeveloped land, and taking advantage of the infrastructure already in place. It also aligns with the evolving work landscape, where hybrid work policies are expected to have a lasting impact.
While office-to-residential conversions offer a promising solution to the housing shortage, they are not without their challenges and obstacles. The cost of conversion may range from $100 to $500+ per square foot, depending on the original layout, existing conditions, and exact scope of work. These high costs make widespread conversions challenging without substantial public funding.
Additionally, it's important to note that property conversions alone cannot fully address Denver's housing shortage. While they offer benefits, such conversions would only account for a small fraction of the needed housing units. For example, potentially convertible office buildings provide approximately 1.5 million square feet of space, equivalent to around 1,500 apartments. This represents just 11% of the low-end estimate of Denver's housing needs.
To overcome these financial challenges, innovative funding mechanisms and incentives would need to be explored. Public support and subsidies have been instrumental in successful conversion projects in other cities. Denver can learn from these examples and consider implementing similar programs to provide the necessary financial resources for property conversions.
However, it's crucial to adopt a comprehensive approach to address the housing shortage. Property conversions should be viewed as one tool among many. Denver should combine office conversions with strategies such as new construction, affordable housing programs, and policy reforms to create a balanced and diversified approach. By recognizing the financial challenges, exploring innovative funding options, and adopting a comprehensive approach, Denver can make significant progress in alleviating the housing shortage. Through strategic planning, collaboration, and creative solutions, Denver can create a more affordable and inclusive city for all residents.
Over recent decades, numerous cities have provided public support and subsidies for office-to-residential conversion, and evidence suggests that these interventions produced a public benefit. In post-9/11 New York, the conversion of 20 million square feet of office space into housing was part of doubling the residential population of Lower Manhattan. Downtown Los Angeles experienced a renaissance after the passage of an “Adaptive Reuse Ordinance” in 1999 that allowed conversions of older commercial buildings without adding parking, resulting in the direct creation of over 12,000 units of housing over 20 years. More direct financial subsidy includes the recent Calgary incentive program that provides $75 per square foot to convert offices into housing, or Philadelphia’s prior 10-year tax abatement that converted 8.2 million square feet from over 40 office buildings, increasing the Center City neighborhood’s population by 54% between 2000 and 2020. These experiences demonstrate the potential of adaptive reuse. But they vary considerably in their exact details, which merits careful consideration.
Implementing property conversions in Denver requires collaboration among stakeholders, including policymakers, developers, and community organizations. A notable milestone is the recent approval of a $10.4 million contract for the conversion of the Clarion Hotel. This project will create 108 income-restricted rental studios and 107 single occupancy rooms, addressing the housing shortage with new units and revitalizing the community. By fostering collaboration, streamlining processes, and implementing innovative financing mechanisms, Denver can encourage more property conversions. This approach will not only alleviate the housing shortage but also improve housing accessibility and affordability for residents. Through the transformation of the Clarion Hotel and the implementation of supportive policies, Denver can make significant progress in establishing a more sustainable and inclusive city for all its residents.
Despite the associated costs, the benefits of increased housing supply and revitalized communities make them a feasible option. By leveraging public support and innovative financing, Denver can overcome economic challenges and create a sustainable future where housing is accessible to all. It is crucial for policymakers, developers, and community members to recognize the potential of property conversions and explore ways to make them financially viable. By adopting a comprehensive approach and balancing housing solutions, Denver can create a more affordable, inclusive, and vibrant city for its residents. Let us embrace the potential of property conversions as a vital tool in addressing housing equity and ensuring that everyone in Denver has access to safe, affordable, and desirable homes.
Stay informed and get your questions answered by reaching out to Ashton Acree, a Denver realtor, at 303-817-3303 or [email protected].