To complete his bingo card of feuding with regulators, Elon Musk is now battling the San Francisco Bureau of Building Inspection (DBI).
the play starts monday Forbes Report Twitter, the social media company owned by Musk, has converted rooms at its San Francisco headquarters into sleeping quarters for tired employees. By Tuesday, the DBI confirmed to reporters that it was investigating Twitter’s building code violations.
“We need to make sure that buildings are being used as intended,” said Patrick Hannan, a spokesman for the department. Say in email This Washington post“Residential buildings have different building code requirements, including those used for short-term accommodation. These codes ensure that people use the space safely.”
The inspection drew some enthusiastic responses from Musk, who suggested the city spend less time policing Twitter’s office space and more time preventing fentanyl overdoses.
So instead of keeping kids fentanyl-free, the city of San Francisco attacks companies that provide beds for weary workers.where are your priorities @londonbreed! ?https://t.co/M7QJWP7u0N
— Elon Musk (@elonmusk) December 6, 2022
But San Francisco isn’t the only city that’s making repurposing office space unnecessarily difficult.
Across the country, once-bustling central business districts are suffering a post-pandemic slump as inner-city workers have shifted to fully remote work or hybrid schedules.Office occupancy has reportedly dropped to half of pre-pandemic levels data Tracked by Kastle Systems.
At the same time, residential rent has returned to, and even surpassed, They’re at pre-pandemic levels in most cities.
This dynamic has piqued the interest of developers in converting vacant offices into apartments.
recent study Research from RentCafe found that there will be 28,000 office-to-apartment conversions in 2020 and 2021. That’s up from the years before the pandemic. These conversions are also growing faster than new apartment construction.
But it’s still a small part of it Nearly 800,000 apartments Built in the same period. Myriad regulations help prevent these conversions from becoming more common.
Light and air provisions in building codes are one of the most common hurdles New Policy Brief From Up for Growth. These codes often require bedrooms to have windows that open. This often cannot be accommodated in office buildings with “deep” floor plans with a lot of interior windowless space. One solution was to install an atrium in the middle of the building. But the Up for Growth report notes that these become dark tunnels after five storeys, necessitating the abandonment of leasable square footage.
Requirements about how close residential units must be to stairwells can also hinder the conversion of large single-stairwell office buildings.
Offices are also generally not zoned for residential use. Rezoning a property is a lengthy and expensive process and there is no guarantee planning officials will agree to a proposed change of use. Even if they did, repartitioning would introduce expensive additional requirements.
For example, in Washington DC, rezoning property Moving from nonresidential to residential use requires developers to offer some units in new buildings to low-income residents at below-market rates.
These policy headwinds are on top of the practical and financial barriers to office-to-apartment conversions. Vacancy rates are rising across offices, but few buildings are completely empty. That means developers will have to buy out existing tenants.
Office rents are also generally higher than residential rents, meaning that demand for office space has to be very low, while residential rents have to be high for the math to work.
The aforementioned Up For Growth report found that in Denver, only 12 buildings are suitable for apartment conversions, accounting for 6 percent of downtown office space.One Report Moody’s Analytics dismissed office-to-apartment conversions in April as a passing fad.
On the other hand, major New York developer Silverstein Properties trying to improve Investors pour $1.5 billion into office-to-apartment conversion.
Policymakers have also expressed interest in scaling back regulation to ease these transitions.
New York Gov. Kathy Hochul introduced an initial proposal in her budget proposal earlier this year to give Manhattan developers greater flexibility in light and air needs. New York City Mayor Eric Adams also backed the idea.One committee The meeting convened by Hochul and Adams should make recommendations on the rule changes that need to be made by the end of the year.
Even harsher, U.S. Rep. Debbie Stabenow (D-Mich.) suggested Subsidize office-to-condo conversions in exchange for some unit affordability.
None of this helps Musk or his employees comfortably nap. The billionaire’s battles with city regulators are a good reminder of how regulation makes downtowns so unfit.
