Hacker News Reader

> Sadly, office buildings are constructed quite differently from residential buildings, and it really is hard to convert them over.

That may be true, but not sure why it's relevant. If someone wants to take on the cost of doing so for an ROI, why not have the regs in place that allows it?

If doing so causes some other _harm_ (environmental, whatever), then sure lets address that but not allowing something because "it's hard" seems an odd take.

I have lived in apartments where basic commercial needs were within walking distance, and it was fine for that period in my life. I'd love to not have to drive or be driven to do that now, even with my SFH. There are several mixed-zone communities in my area where are all booming (not in the same building, but I don't see that as anything but the obvious next step).

>That may be true, but not sure why it's relevant. If someone wants to take on the cost of doing so for an ROI, why not have the regs in place that allows it?

It's relevant because the extent of the difference has significant impact on the cost of the conversion, which determines whether the ROI is likely to be positive or negative and so whether somebody is likely to went to take on the cost without additional incentive.

You had it there for a minute, but... The potential profitability of converting a tower is something only the buyer should be concerned with, not the government.

The reasons to not convert a tower =! The reasons to change zoning, which could reasonably include concerns over traffic or appearance.

>The potential profitability of converting a tower is something only the buyer should be concerned with, not the government.

I have no idea how you could possibly hold such a position, so I'm not really sure what to say. Do you think incentives don't matter? Do you think the government doesn't already heavily involve itself in real estate pricing beyond just zoning via numerous regulatory means and subsidies? Do you think that what gets built in a jurisdiction just isn't its government's concern?

You're a bit confused about how this works. If the gov changes an area with office buildings to mixed zoning then some will be converted and some wont because of cost. Market forces can decide what's cost effective in that case. It does not matter that some will not be cost effective to convert. There is also no damage done if magically none of them get converted...

>If the gov changes an area with office buildings to mixed zoning then some will be converted and some wont because of cost.

Unless, because of the costs, none of them are. And while that does no harm, if the purpose of changing the zoning was to get more housing, then it also does no good. The profitability of the conversion absolutely should be a consideration, because a tax abatement or something could effect change where simply altering zoning might not.

You're arguing the wrong direction, I think.

If the gov does not change zoning restrictions to something less restrictive, then the work will, by law, not be possible.

If they do, then it's POSSIBLE, but it's not up to gov't to MANDATE it.

Arguing that they shouldn't "loosen" the restrictions because the market _MIGHT_ determine it's still not worthwhile seems odd to me. Perhaps this is from a cultural bias.

The point of the article wasn't to make more housing required, it was to make it possible to do so. Perhaps in other countries/cultures/governments the incentives are different (market vs. gov), but this article is not that.

>but it's not up to gov't to MANDATE it.

>Arguing that they shouldn't "loosen" the restrictions because the market _MIGHT_ determine it's still not worthwhile

Neither of those arguments are being made. The argument being made is that if the government intends to effect change in the housing market, it must concern itself with the economics, because those economics are largely determined by government policy and determine whether new housing is actually likely to get built.

Once upon a time in new york, people built bleechers on their roofs to watch baseball games. Neighbors would potluck or sell home cooked food. There was enough housing for everyone, because they had very loose regulations.

If you really want to turn this into a multiday thread, then we can start with the different theorems of value; you will come to see how even theory proves it is a terrible idea to have government trying to manage for profit endeavors. But, if you just want the magic fix to the housing shortage, you should just run with deregulation.

I am equally clueless as to how you came up with this line of questions. Of course incentives matter, when did I imply they didnt? Of course the government is involved, which is why I said the reasons for not converting a building (the buyer) arent the same reasons why you wouldnt rezone (government), something there not clear?

>It makes more sense to leave them as non-residential space, even if vacant for awhile before finally being reoccupied, and then to separately build brand new purpose-specific high rise residential buildings (which will be nicer than a converted office building ever could).

Under what criteria? Also, a large ask, but if you might indulge me: posit circumstances in which it WOULD make more sense to convert.

> posit circumstances in which it WOULD make more sense to convert.

If office buildings had been built with conversion in mind in the first place. This would require smaller floorplates, more utility stacks, etc., and they wouldn't be as profitable as office buildings built without those constraints, but you would at least have better future flexibility in what kind of use the building gets.

But you can't just ignore that existing office buildings are not remotely like residential buildings, and would be extremely expensive to convert. So I suppose the criteria you might say is profitability; if a conversion won't turn a profit, no developer is going to do it.

>If office buildings had been built with conversion in mind in the first place.

No, respectfully, that's a cop-out. I'll give an example: New Jersey gets nuked; residents are successfully evacuated, but now they all need a new place to live, and suddenly it makes to do makeshift retrofits of Manhattan high-rises to house them, if temporarily. That's obviously at the far end of the spectrum. I'm looking for the line where we cross from "untenable" to "tenable".

The line is defined by profitability. And it's simply not profitable to do most of these conversions, as the conversions are extensive and costly and still don't yield units that are as good as purpose-built residential apartments. I'm not sure what part of that is confusing.

>The line is defined by profitability.

In what scope? Something that might not be profitable for a single company could be value-generating at a national level.

> as the conversions are extensive and costly and still don't yield units that are as good as purpose-built residential apartments

I understand that you've decided this. I'm saying that it's not a given, and asking you to free your mind a bit. How could the conversions be less costly? What compromises in design would people actually be willing to live with? What external conditions might lead to conversions making sense (including ones where potential profit is not the primary purpose of the build).

I GET that the people investing in real estate right now don't want to build anything but what they want to build. We're not obligated to confine our imagination to their ideal balance sheet.

>Under what criteria?

If maintaining the property value is a better move in your risk analysis, over making income from renters. Maintaining the value of your $100M+ tower makes a lot of sense if you are expecting commercial real estate to turn around soon. If you convert it, it will probably never be able to sell for more than a fraction of that and investors get hosed.

>posit circumstances

Massive deregulation in what qualifies as legal arounding housing would be one major chip. The other would be massive devaluation (which probably depends on the former point), such as massive amounts of housing going up in neighboring areas.

The solution to empty office buildings is to bring more workers to live in the city to use that office space.