Outdated Offices to Much-Needed Housing – How Troy is Leading the Way
(Elizabeth Schanz, Oct. 9, 2023)
Troy, MI – With the workforce changing to a more virtual model following the COVID-19 pandemic, many office units have opened up across the country leaving many communities to think of new development opportunities for these spaces.
One issue that is prevalent across the country is with housing, and once solution starting to emerge is turning office buildings into homes. The Oakland County Planning, Zoning and Land Use “Planners Gathering” addressed how the community of Troy, Mich. is working on development projects to convert unused office spaces into livable housing units. The project’s primary functions are to accommodate a growing community, help elevate the housing crisis and to enhance the economic value of these properties.
“Remote work is here to stay,” said Brent Savidant the community development director for the City of Troy. “The other thing that’s very clear with the data is there’s less demand for office space today than there was pre-COVID-19.”
Savidant highlighted the need and opportunities for office-to-residential housing projects. He said in Troy there are currently 278 office properties totaling over 17 million square feet of office space. However, today the vacancy rate for these units is at 25.3 percent as of quarter one of 2023.
Two office conversion projects already taking place in the city of Troy are located at 275 Kirts and 2690 Crooks, which are both zoned areas along Big Beaver.
The 275 Kirts project called “Forum Flats” is transforming the 102,000 square foot office building into 90 units and the parking lot next to the building “had the development potential for two additional four-story building” with 55 units each, totaling 200 housing units for the project.
The 2690 Project, “Lindsey Center,” is an 88,000-square-foot building converted into 62 apartment units and the vacant parking lot was transformed into a 5-story building with 94 units totaling 156 units for the property.
Additionally, Savidant said there are 8,081 apartment units that are either constructed or being constructed across the entire City of Troy. Savidant said the way to help ease the housing crisis: with fewer people able to afford homes because of higher mortgage rates and home prices with less housing inventory, is to “build more housing.”
This is where the office-to-residential housing transformation comes heavily into play.
Savidant said the “stranded assets” of vacant office units in combination with high housing demand create a “critical storm of opportunity” for the community to create a greater number of units that are sustainable, conserve time and have the potential to benefit the community and renters economically with the potential to make money off of unused space.
“The planet is burning. 90 percent of construction and demolition debris is generated by demolition and only 10 percent of construction debris is generated by new construction. So if we save these buildings and they don’t go into the landfill we save products from going into the landfill,” Savidant said.
Savidant said renovations to already-standing properties lead to more sustainable development. He noted new construction “produces 11 percent of global carbon emissions” and renovation instead preserves “embedded carbon.”
Other positives Savidant addresses for office to residential housing renovations include the ability to work on construction throughout winter months because demolition is not necessary. This capability has the potential to increase the speed in which projects are complete.
“This concept is not a magic bullet that’s going to cure all (of) our vacancies. It’s one option that helps relieve the pressure that we talked about earlier. It’s not going to solve all our problems, but it can certainly help,” Savidant said.
Similarly, Savidant said, “Only 20 to 25 percent of office buildings are suitable for conversion.” There are many standards and factors that have to be considered and corrected in order to make the conversion from office space to residential units feasible.
Some of these factors include:
- The structure of floor plates. Double-loaded hallways (units on either side of a hallway) “yield twice as much rent” as single-loaded hallways. Narrow buildings will have less space.
- Daylight. The deeper the room less natural light will enter, a characteristic of wide buildings. The ideal building width Savidant outlined is about 65 to 70 feet wide.
- Residential style windows, for instance, bay windows, double hung, are not typically found in office units. Architects have to develop how to create natural light, such as floor-to-floor windows, which can often be costly.
- Mechanical, Electrical, Plumbing. Often for conversions, pipes need to be adjusted as well as in-unit adjustments for heating and cooling.
- Building codes. Apartment buildings and office units fall under different codes and have different standards for fire alarms, walls, and ventilation.
Savidant said other things to consider are amenities, location, walking distance to other places and the building’s age.
Even with many areas to address and tackle, Savidant noted that Troy is one case among many areas that are using housing conversions as a means of development. He referenced a study done by RentCafe’s analysis of Yardi Matrix data that found that in 2022 Los Angeles, Calif., Alexandria, Va. and Baltimore, Ma. were some of the top cities for apartment conversion from office space with 692, 435 and 395 apartments respectively. In terms of future development, Detroit, Mich. was named number 6 in 2022 with 2,327 units under review.
Savidant said communities should look at opportunities they have for office to residential development. He advocated for communities to examine their policies and zoning in regard to making these projects accessible, find opportunities to speed up the process of development and establish a culture that finds unique approaches to these types of projects.
