So it just makes more financial sense to find a smaller building to upsize or one in more disrepair to demolish and rebuild than to convert a perfectly fine office building.
If housing prices are still unnaturally high (putting pressure on other industries) then solve all the other issues beyond zoning: pro-NIMBY municipal policy, fire any politician/counselor who uses the phrase "rent control", eliminate height restrictions, streamline inefficient/byzantine development regulations and licensing, modernize and reform unions that slow housing development to preserve the original intended societal benefits of unions without the legacy cruft generating all the negative baggage, etc.
What?? Not saying the conversion is cheap but come on, the building is already there.
Residential: Bah; Dormitory: Yay!
In brief: [Charlie Munger—billionaire vice chairman of Warren Buffet's Berkshire Hathaway] has offered UCSB more than $200 million to build this dorm to his designs, which will cost an estimated $1.2 billion. The structure is a giant block in which almost none of the rooms have windows.
https://www.architectmagazine.com/design/buildings/the-munge...
Also, the Munger interview here is pretty funny: https://www.architecturalrecord.com/articles/15378-exclusive...
Then there's other code considerations like windows and fire exit distance requirements that become harder to meet once you start adding walls.
If you have to move all the floors, walls, utilities, elevators, and exits, how much of the original building are you actually leaving intact? Often times, even after doing all that, a conversion still isn't viable because there's just too much floor area and not enough windows to make any layout that isn't a 10k sqft single room studio viable.
They’re probably worth less per square foot than a bunch of smaller apartments, but they’re still worth way more than a typical N bedroom apartment.
You can always build rooms out of dividers, etc to break up the space.
The solution is dorm-style housing. Shared bathrooms to reduce plumbing requirements. Waiver of window requirements for internal rooms, possibly even units.
New York has a couple of these left, and they’re popular with young people first moving to the city. (Shared bathrooms. Units without windows are also popular, but they are illegal.) Unfortunately, it’s largely against code, and not for safety reasons.
And commercial buildings are often just knocked down and a new one built because that's cheaper.
It's lack of natural light and the size of the typical floor plate for offices that often render the projects impossible without significant structural rework.
This building in manhattan is in the range of ~$400/500/sqft to renovate existing offices to apts [1]. ANd that's with concessions from Adams in NYC to allow for windowless office rooms in the space.
Still likely better economics than a ground up rebuild, but likely only because the project can be completed and permitted much faster than a ground up project in big cities.
1 - https://gothamist.com/news/the-countrys-biggest-office-to-ap...
If one office among many is closing down, that puts these homes right in the centre of the action. That might make for a good residence and justify the cost. But if swaths of offices are closing down, as suggested earlier, there won't be any nearby work left. Why would people want to live in those converted buildings?
"the building is already there" can be said about any ghost town. Hell, in those ghost towns, many of those buildings are houses already. There being a building isn't a compelling enough reason to want to live somewhere.