What would be the necessary steps to turn more offices into housing?
A Walk in the Loop: Turning More Offices into Housing in Chicago, a Businessman’s Journey Across the Urban Labyrinth
Michael M. Edwards is a businessman in Chicago who runs the ChicagoLoop Alliance. He started going back to his own office in the spring of 2020 and recalled biking down the street past boarded-up buildings and empty skyscrapers. When he took the train, he noticed the silence, the absence of all the suited-up businesspeople who used to commute alongside him.
A plan by the city to create 1,000 housing units with the help of office conversions along a major business thoroughfare is something Mr. Edwards is excited about. With more people living downtown, Mr. Edwards argues, more people could easily commute to downtown jobs.
He notes that this push to bring more housing downtown is part of a recent trend: Roughly 40,000 people live in the downtown Loop, up from just about 13,000 a decade ago. Apartments in the Loop are renting at higher rates than they were prepandemic, indicating that people are interested in living in that downtown bustle.
He said that he lived in the loop and that he was in the middle of everything. After a 10 minute walk to work, you have two hours of commute time back.
Real Estate Investments in the West Side of Atlanta: An Investing Tech Giant Takes a Lead on the Road to becoming the Next Silicon Valley
Some real estate owners in New York are very aggressive in their communication about housing conversion. They note that companies are increasingly looking for new offices with luxe amenities — Class A spaces — in what real estate firms are calling a “flight to quality.” That leaves millions of square feet in lower-class spaces, often constructed before the 1980s, that is likely to sit empty.
When Microsoft President Brad Smith announced in February 2021 that the tech giant had purchased a 90-acre plot of land in Atlanta’s westside, he laid out a bold vision: The company, he said, would invest in the community and put it “on the path toward becoming one of Microsoft’s largest hubs” in the United States.
The announcement, which was met with enthusiastic coverage in local media, promised the construction of affordable housing, programs to help public school children develop digital skills, support for historically Black colleges and universities, new funding for local nonprofits, and affordable broadband for more people in Atlanta.
Two years later, Microsoft made changes to its hardware portfolio and eliminated 10,000 jobs as part of a series of cost-cutting efforts. A Microsoft spokeswoman confirmed to CNN that there was a pause in development of the Atlanta campus.
“All the promises of, ‘We’re going to put a grocery store here, we’re going to bring jobs to the area, we’re going to have a pipeline between the schools and Microsoft to create jobs,’ all that seems like it’s out the window,” she told CNN. “But the consequences are still being felt by the neighborhood.”
During the past decade, many cities across the country sought to become tech hubs as the industry boomed. In order to bring jobs and other benefits to their communities, state and city officials competed with Silicon Valley giants to bring offices, data center, and warehouses to their communities. In perhaps the biggest example of this, 238 communities submitted bids in 2017 to be home to Amazon’s second headquarters, with some offering major tax breaks or even to rename land “city of Amazon.”
The rise of remote and hybrid work had been a major driver in tech giants cutting back on their real estate investments, Yasukochi said. Then came the recent cost-cutting measures.
According to local news reports and recent corporate announcements, Facebook-parent Meta, Microsoft,Salesforce and snap has each shuttered offices or announced plans to cut back on real estate. Some tech companies have said they’ll let leases expire or go fully remote. Meta CEO Mark Zuckerberg said his company is “transitioning to desk-sharing for people who already spend most of their time outside the office.”
In San Francisco, for example, some businesses are worried about the effects of remote work and tech office closings, as well as the effect of those pullbacks in New York City.
“Tech had pretty much gained market share to become the top industry leasing office space across the US, and that started back in 2012, 2013,” said Colin Yasukochi, the executive director of the Tech Insights Center at CBRE, a commercial real estate firm. The finance and insurance companies overtook the tech industry in terms of office leases in 2022, according to data by CB Richard Ellis.
“Really, over the last couple of quarters, you’ve seen the tech industry decrease its leasing activity pretty significantly,” he added. The biggest impact that has been seen is the decline in leasing activity in the tech industry.
Google Takes the Lead on the Edge: Facebook Collapse in Quarry Yards, Georgia, Following Microsoft’s Microsoft Purchase of Amazon’s Second Headquarters
Some promise has been found in Quarry Yards, but dashed hopes have been found at the site. In 2017, Georgia officials included the formerly industrial area on a list of sites where Amazon could build its second headquarters, as part of its pitch to the e-commerce giant. Amazon ultimately went with other cities, but four years later, another Seattle tech giant scooped up the land.
The purchase description from Microsoft stated that Quarry Yards was a place with wide, tree-lined streets but broken sidewalks. Microsoft said there is no grocery store, pharmacy or bank in the area.
The community consists of elderly, black neighbors, according to Hope. These residents, she said, have been worried about gentrification and displacement for years as housing prices and property taxes surge in the metro Atlanta region.
“Just the announcement of Microsoft coming into town” brought new buyers and developers into the area, she said, exacerbating these longstanding concerns. Home values in the neighborhood increased at a faster rate than Atlanta’s over the course of a year, according to data from Zillow.
But residents also had cautious optimism about the benefits Microsoft promised to the community, according to Hope. Now, the community is left with higher prices but none of the promised improvements or economic opportunities. “We’re not going to see any benefits and only deal with the consequences,” she said.
“As we continue to shape our future workplace experience, we’re working to ensure our real estate investments meet the current and future needs of our workforce,” Ryan Lamont, a Google spokesperson, told CNN in a statement. “Our campuses are at the heart of our Google community, and we remain committed to our long-term presence in Washington state.”
In a Kirkland City Council meeting held just last summer, representatives from Google teased a slew of community benefits from the build — including infrastructure improvements, such as the creation of bike lanes and pedestrian trails, as well as a more than $12 million investment in affordable housing. The planning process between Google and the city had been taking place since the fall of 2020.
The Chieftain: a San Francisco café and restaurant open since the first pandemic of the 20th century in the post-Pandemic Era
San Francisco, which has more to with Silicon Valley than any other city, is showing signs of stress from the shift to remote work and office closings.
The city’s office vacancies hit a record high of 27.6% in the final three months of last year, according to a new report.
Mark Nagle, the owner of a 21-year-old Irish pub and restaurant in downtown San Francisco called The Chieftain, told CNN he has witnessed a “cascade of closures” of tech and corporate offices in his neighborhood recently — including the shuttering of a Snapchat office just down the street.
He said that they are in a great location downtown. His business is surrounded by empty retail space and lots under construction.
The number of workers in the area has not rebounded since the beginning of the Pandemic, and neither does Nagle’s business. Nagle said that in addition to workers stopping by for a drink at the end of their days, nearby companies would frequently hold events and meetings at The Chieftain, but that those have also largely dropped off.
“You’re making do with less and it’s made the business so much more unpredictable,” he added. We are one of the fortunate people who can keep their doors open.