Seattle’s Downtown Revival: The Challenges and Opportunities in Office-to-Residential Conversion


Key Takeaways:
1. Challenges in renovating office buildings into residential spaces include high costs and compliance with different building codes.
2. Seattle Mayor Bruce Harrell proposes easier approval for office-to-residential conversions, but skeptics say it’s not a cure-all for the city’s housing issues.
3. Commercial to residential conversions could offer limited availability, with viable buildings constituting just single-digit to 11% in large US cities.
4. Mixed-use spaces could be a solution, combining work and living spaces in the same building.

Seattle, a tech-hub, is trending towards office-to-residential conversions amidst rising housing costs and the norms of remote work. As more office buildings in Seattle remain partially occupied or downright vacant, the city is exploring opportunities for revitalization through housing conversions.

The Role of New Policies in Revival Efforts

As cities strive to generate tax revenue, proposals to facilitate these transitions are surfacing. Seattle Mayor Bruce Harrell, earlier this month, suggested exempting these conversions from design review standards and Mandatory Housing Affordability (MHA) requirements. Such leeway could fast-track the recovery of Seattle’s downtown area.

However, seamless conversion comes with its own set of challenges, including complying with new building codes and undertaking extensive renovations to make the spaces livable.

The Hurdles of Conversion

The cost of turning commercial spaces into residential ones is quite substantial. Commercial buildings designed for office use require major renovations to create livable spaces, including the addition of kitchens and bathrooms, and alterations to improve natural light. Adherence to residential building codes and energy standards, often different from commercial ones, pushes up this cost further.

“The problems with office conversions go well beyond MHA and design review. Converting office to residential is a distraction from the bigger issue — it no longer makes financial sense to build housing in Seattle,” cautions Kevin Wallace, president of Wallace Properties.

Others, like Al Levine, a former director of affordable housing at the Seattle Housing Authority, compare the concessions offered by Mayor Harrell as a temporary fix to a bigger problem. Levine opines that a comprehensive approach with additional city subsidies would be the key to further progress.

Limited Scope and Design Alternatives

Admittedly, the availability of appropriate buildings for such conversions is limited, resting between single-digit to an estimated 11% in big cities. Thus, the trend remains a fringe one at best.

However, mixed-use spaces can open new doors. This model combines residential and commercial spaces in the same building, reducing costs and catering to the needs of a remote work culture prevalent in the tech workforce.

Seattle’s first post-pandemic, mixed-use conversion, The Queen Anne Plaza building, is currently under review by the city. Last year, the city’s Office of Planning and Community Development even held a contest for innovative solutions to make office spaces more residential-friendly.

On a larger scale, nationwide examples like The Wray in Washington, D.C., and the Millennium on LaSalle in Chicago demonstrate successful office to residential conversions. It remains to be seen if Seattle can replicate these models and effectively overcome the attendant challenges.

As the city eyes property rejuvenation amid a new remote working era, understanding the intricacies of these conversions becomes vital. A nuanced approach, accommodating the tech-savvy population’s needs, may help Seattle conquer its post-pandemic property crisis and pave the way for an innovative downtown culture.

Jonathan Browne
Jonathan Browne
Jonathan Browne is the CEO and Founder of Livy.AI

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