Podcast Summary: "Why Can’t We Just Turn the Empty Offices into Apartments?"

Search Engine Episode Release Date: April 18, 2025
Host: PJ Vogt
Edited by Sruthi Pinnamaneni

Introduction

In this classic episode of Search Engine, host PJ Vogt delves into a pressing urban dilemma: the persistent shortage of affordable housing juxtaposed against a surplus of vacant commercial properties. The episode explores why converting empty offices into apartments isn't a straightforward solution and examines the multifaceted obstacles that impede such transformations.

Listener's Inquiry

The episode is sparked by an email from Julia in Santa Rosa, California, who poses a compelling question:

Julia (04:53): "When we have such a shortage of housing, why does it seem there’s no reason to convert vacant real estate into residential properties?"

PJ Vogt echoes Julia's confusion, highlighting the paradox of abundant empty offices amid soaring rental prices and a dire lack of affordable apartments.

Zoning Laws and Their Historical Impact

To unravel Julia's question, PJ consults Bill Fulton, a seasoned zoning expert with a background as a journalist, mayor of Ventura, California, and urban planning director in San Diego.

Bill Fulton (10:27): "The planning director in San Diego oversees the long-term plans for all the neighborhoods, how big the buildings can be, what infrastructure has to be included. You get into big fights with the neighbors over whether there's going to be more development in their neighborhood, that kind of thing."

Bill elaborates on the rigid nature of zoning laws, which historically segregated land use to protect public health and, controversially, to enforce social and racial boundaries. He explains that single-family zoning, prevalent in cities like Los Angeles and Berkeley, was initially a tool to exclude non-wealthy and non-white populations, thereby maintaining socio-economic homogeneity.

Bill Fulton (12:25): "If you removed zoning, many of those single-family homes would be redeveloped to higher density and there would be a lot more housing available."

The episode details how these zoning restrictions have led to limited housing stock and inflated property prices, as they prevent the development of multifamily dwellings that could alleviate the housing crisis.

Physical Obstacles to Conversion

Moving beyond zoning, the discussion shifts to the architectural challenges of repurposing office buildings for residential use. Most contemporary office spaces, characterized by large, windowless floor plates designed for open-plan work environments, are ill-suited for conversion into apartments.

Bill Fulton (22:19): "The floor plates are huge. So, a typical floor plate is maybe 50,000 square feet. So that's very hard to convert to apartments because there's so much interior space that would be without windows."

However, older buildings with smaller, more compartmentalized spaces have seen some success in conversion, as their structures are more adaptable to residential layouts. Additionally, the episode highlights shopping malls as emerging candidates for redevelopment due to their vast, contiguous land ownership and simpler teardown processes.

Local Efforts and Property Owner Obstacles

PJ connects with Raeesa Dolorosa, Division Director for Economic Development in Santa Rosa, to gain insight into local efforts to transform vacant properties.

Raeesa de la Rosa (32:15): "We have a ton of things that have been entailed in downtown. In the downtown alone, in the building permit process, we have 870 permits. Developers have applied for something. We have 419 in construction, and we have 131 final. So we have a lot of units that are in the pipeline."

Raeesa explains that while there is momentum towards redevelopment, numerous obstacles persist. Property owners may lack incentives to lease or sell vacant buildings due to financial strategies like tax loss harvesting or portfolio optimization. Additionally, the high costs associated with financing and constructing new housing make conversions economically unfeasible for many developers.

Community Opposition: NIMBYism vs. YIMBYism

A significant barrier to redevelopment is community opposition, commonly referred to as NIMBYism ("Not In My Backyard"). Residents often fear that new developments will alter the character of their neighborhoods, decrease property values, or bring unwanted changes.

Raeesa de la Rosa (35:30): "Neighbors and NIMBYism tend to be the biggest obstacle. Sometimes neighbors have a very short-term view and miss the long-term benefits."

Through vivid descriptions of public hearings, PJ illustrates the intense resistance faced when proposing zoning changes or new developments. Clips from meetings reveal a spectrum of objections, ranging from unfounded fears about attracting undesirable populations to concerns over increased density disrupting community harmony.

Demographic Shifts and the Future of Urban Development

Bill Fulton offers a nuanced perspective on overcoming entrenched NIMBY attitudes, pointing to inevitable demographic changes as a natural catalyst for progress.

Bill Fulton (38:58): "Most of those people are older, and eventually that constituency will begin to disappear. There's a huge generation gap between older homeowners, mostly white, who resist change, and everybody under 40 struggling to buy a house."

He posits that as older generations pass away and younger, more diverse populations become the majority, the demand for affordable housing will naturally drive zoning reforms and greater acceptance of multifamily developments.

Comprehensive Solutions Beyond Conversions

In conclusion, Bill emphasizes that addressing the housing crisis requires a multifaceted approach rather than relying solely on converting vacant offices into apartments.

Bill Fulton (42:03): "We've been under producing housing in the United States for 30 years. It's probably both... over the next 10 or 15 years, we're going to have to do everything. It's not just converting office buildings. It's tearing down old malls and replacing them with housing."

The episode underscores the necessity of diverse strategies, including flexible zoning, incentivizing property owners, fostering community support, and embracing innovative architectural solutions to expand the housing supply effectively.

Closing Thoughts

PJ Vogt wraps up by reaffirming that while the challenges are significant, the combination of changing demographics and comprehensive urban planning strategies offers hope for a future where the scarcity of affordable housing is mitigated through thoughtful redevelopment of existing commercial spaces.

Notable Quotes with Timestamps:

• Julia (04:53): "When we have such a shortage of housing, why does it seem there’s no reason to convert vacant real estate into residential properties?"

• Bill Fulton (10:27): "The planning director in San Diego oversees the long-term plans for all the neighborhoods..."

• Bill Fulton (12:25): "If you removed zoning, many of those single-family homes would be redeveloped to higher density..."

• Bill Fulton (22:19): "The floor plates are huge. So, a typical floor plate is maybe 50,000 square feet..."

• Raeesa de la Rosa (32:15): "We have a ton of things that have been entailed in downtown..."

• Bill Fulton (38:58): "Most of those people are older, and eventually that constituency will begin to disappear..."

• Bill Fulton (42:03): "We've been under producing housing in the United States for 30 years..."

This episode of Search Engine provides a comprehensive exploration of the housing shortage issue, dissecting the layers of zoning laws, architectural constraints, property owner incentives, and community opposition. By integrating expert insights and real-world examples, PJ Vogt offers listeners a nuanced understanding of why the simple solution of repurposing empty offices into apartments remains elusive and what pathways might lead to more viable outcomes in the future.