Remote work policies implemented during the COVID-19 pandemic led to historically high office vacancy rates in New York City, creating a structural mismatch between office supply and demand in high-density commercial districts where housing demand remained strong. In response, the City was seeking strategies to encourage adaptive re-use of office buildings. The New York City Economic Development Corporation (NYCEDC) engaged ESI and Packard Beasley Consulting to provide management and technical support to a city-council-mandated Office Adaptive Reuse Task Force charged with developing strategic recommendations to encourage the conversion of vacant or underutilized office space to other uses, with particular emphasis on housing.
ESI’s scope encompassed four analytical components, conducted in close coordination with the New York City Department of City Planning:
- Evaluating a commercial and residential market analysis prepared by NYCEDC and recommending methods to extend the work;
- Conducting 26 interviews with nearly 40 industry experts, including brokers, property owners, engineers, architects, developers, and lenders, to gather intelligence on conversion feasibility and market constraints;
- Developing a series of future market scenarios benchmarking the range of possibilities for the office market based on projected supply-demand dynamics; and
- Building a financial feasibility model to assess the economic viability of converting specific office buildings to residential uses.
These inputs were combined to provide the city with insights about which regulatory or financial barriers were preventing the private sector from undertaking otherwise viable adaptive re-use projects, and which re-use projects were logistically or financially infeasible for reasons outside of the influence of city policy.
The analysis informed the Task Force’s recommendations to the City and State of New York on regulatory and zoning changes and financial incentives needed to secure the future of the office and residential markets. The work contributed directly to ongoing policy discussions about adaptive reuse regulations, tax incentives, and zoning flexibility as tools for expanding New York City’s housing supply.
ESI produced the Task Force’s final report, a designed public-facing document that shaped city and state legislative discussions on office conversion policy and has been widely referenced in the national adaptive reuse policy debate.