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Comment by indymike | Hacker News Reader

I've looked at the cost of converting office space to residential, and every time, it was slightly less costly than a tear down and rebuild - and in one case it was a lot more. And that's before you deal with parking. The other issue was taxes: the city would not get the same tax revenue out of the building and wasn't very interested in the project as a result.

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can you explain why parking would be an issue? Typically offices are more people-dense than residential. So converting office to residential should reduce the number of parking spaces needed.

The ocean of concrete around a typical suburban office building is very expensive to remediate. Downtown buildings often have integrated parking garages which create substantial expense when converting to residential. Also, family residences may actually increase parking demands in downtown properties (i.e. walk/train/etc to work means less demand for spaces then when 2 car families move in). If converting to residential was doable outside of extremely low value/tax incentive properties, every REIT would be converting their poor performing commercial holdings... It's just not simple, easy or rewarding right now.

Can you explain the "substantial expense" required to convert an office parking garage to a residential parking garage?

Typically, office building parking ratio is currently around 4 spots per 1,000 square feet (1). With two people sharing a 750 sqft 1BR apartment, there should be 50% extra parking spaces.

(1) https://www.commercialrealestate.loans/commercial-real-estat...

Typical != Local

We are not (or should not) be talking about an overnight change. Parking lots and ramps wear out over time and have to be replaced (ramps must be replaced for safety reasons, lots you can fill the holes with gravel and continue using if the market will allow). Likewise buildings reach the point where you can start asking if remodeling is better than tearing down (often to build larger). Cities should be changing over time, so remove one old lot/ramp/building and watch what happens. If parking is needed you will see that as existing lots/ramps fill and raise rates, while if it isn't needed you will see. And of course as you build larger that means more people which in turn gives transit a boost in rider which in turn means you can increase service making cars less needed. Every year every lot/ramp/building owner should observe the city compared to their real estate and decide if maybe it is time to do something different.

There's a reason that most re-development takes a long time. Most of that time is waiting for land values to drop to the point that redevelopment is the best way to restore property tax revenue. That process takes decades. The thought exercise here is what if there was a way to go faster and convert a building from commercial to residential? The article is about a developer who does this in NYC... where a lot of commercial real estate is at 50% occupancy... and is doing conversions very quickly.

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