this post was submitted on 20 Nov 2024
135 points (97.9% liked)
Housing Bubble 2: Return of the Ugly
333 readers
516 users here now
A community for discussing and documenting the second great housing bubble.
founded 7 months ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
So are you ready for the real kicker?
It's more often than not, cheaper to demolish office blocks and build fresh residential than it is to convert office blocks to residential. This is because utilities like clean water, grey water, and black water have been built to a commercial office demand specification that residential exceeds.
The rest of it depends on the specifics of the building like fire escapes, width of stairways, number of elevators, the electricity runs, networking, etc.
Even if it can be done to meet legal requirements there are other factors that would make the price for these converted apartments crater meaning they would be sold with little profit and therefore no developer would take on the job.
For example: Air conditioning has to be completely redone because whole floors will be connected in series so if one flat doesn't want to pay for AC usage and disconnects then the whole floor of flats doesn't get AC.
Another one is having windows that you can't open. No sane person would buy an apartment in a city with no openable windows. And windows are often designed in parallel with the cladding and external fascia.
In short, you're better off ripping the whole building back to the steel frame and concrete pads, adding extra capacity for utilities, then starting the exterior and interior from scratch. And at that point it'd be quicker to demolish the original building entirely and build something new. Remember, the longer a project takes, the more likely it will be delayed. And delays cost more money.
It's not impossible, but the stars have to align to find a building where a retrofit is both possible and economically profitable enough.
Just to tack on to all of your points, there are also different energy efficiency requirements for commercial and residential buildings. R-values on walls and windows are lower in commercial spaces (for a variety of legitimate and debatable reasons) which is why office buildings can have floor to ceiling aluminum windows while residential buildings generally have more opaque walls. Insulation requirements between units, between floors, and for mechanical rooms are also lower in commercial spaces.
Some office buildings cannot become residential spaces at all.
Ah yes I had forgotten about that one, thanks for adding it to the list.
It just goes to show why the costs of designing and constructing for mixed used needs to be offset by some form of tax on single use buildings.
I don't give capitalism much credit (pun not intended) but it is good at finding the most cost efficient way to do something. Regulations and taxation must be adjusted to align what is the right and correct outcome with what is cheapest. And changes to those regulations and taxation need to move atleast the same speed as the industry to keep commercial interests aligned with the public good.