It's like how sometimes it just doesn't make sense to refactor code because it is fundamentally designed for a different purpose. Sure you can grind it out but will it be any better or cheaper than starting fresh?
Once we start talking easing housing code requirements, especially if it's done in the name of increasing access to housing, the conversation becomes about just how much conversion is really necessary, and how little can be done to break even. And there's a big continuum.
If one end of this continuum is a standard college dorm setup, the other is literally just letting people camp out in an otherwise-unmodified office floor. In between are probably SRO-level accommodations, building four-wall cubicles with open ceilings for sunlight and ventilation (sometimes traditionally covered in chickenwire).
As grim as this sounds, it might actually be preferable to the current practice of allowing tent cities to proliferate downtown. The idea of an office tower slum is incredibly dystopian, but if the alternative is the properties becoming write-offs, it may be the most likely outcome.
It's hard to get more contemporary cyberpunk than an organic community nesting in an ex-Facebook office building.
So it seems this scheme is much less about helping some poor homeless person and much more about some rich investor keeping some money.
Of course the specifics of the building matter a lot, but it's certainly cheaper than ground up net new development.
And even if the conversion leads to abnormal units per modern standards, it will still get occupied at the right price.
Seems a no brainer to rezone most office space to residential. Free market will figure it out. You can bet buying these commercial properties at firesale prices will open up a profitable path to residential
Everyone’s underwater a there isn’t a good solution without massive price decrease (crash) or commercial space demand re-invigorates.
This is what recessions are useful for. Underwater mortgages still need to be serviced. There might be a deal in providing assistance to the lender in exchange for financing conversion.
The mortgages will fail for most new office space, because the underwriting used unrealistic assumptions about rents.