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BANGKOK – The coronavirus pandemic has increased pressure on governments to address the housing shortage and allowed authorities more freedom to convert empty offices, urban experts said Tuesday.
Last month, the South Korean government said it will add 114,000 public housing units in the next two years by buying vacant hotels and offices and converting them into residences.
Singapore is pushing forward a plan to remodel the old offices in its central business district (CBD) with new incentives to convert leftover parking spaces into residences, shops, restaurants and covered farms.
“Governments and developers across the region are looking to convert commercial space into housing,” said Justin Eng, associate director of research at real estate consultancy Knight Frank Asia-Pacific, adding that it is still “sporadic.”
“These trends had been in motion before COVID-19, but now they have accelerated,” he said, with government incentives as an added benefit.
As governments around the world have imposed movement restrictions during the pandemic, developers and authorities are struggling with fewer office workers.
Eight out of 10 workers in Singapore preferred to work from home or have flexible arrangements, a survey in October showed, which could leave many offices and parking lots empty in the city hungry for land.
But the plan to encourage office conversion would be more feasible to convert hotels and service apartments into residences, Eng told the Thomson Reuters Foundation.
“Changing an office to residential would take longer and cost more. The additional costs may not make the change of use financially viable,” he said.
A spokeswoman for the Singapore Urban Development Authority said they had received “a number of proposals” for the plans.
“With more people working from home during this period, the need for CBD to have more mixed uses with more resident population becomes more acute,” he said.
Converting old or unused commercial spaces into homes is not a new trend. A plan in New York City that was launched in the mid-1990s offers tax breaks for such conversions.
In the past decade, offices were the most common structures to become rental units in the United States, according to research conducted by property rental website RENTCafe.
But this approach may not work well in India, where the government announced in July a plan to create more affordable rental housing, as quality office space is in short supply in major cities and property prices are still high. said Anuj Puri, president. for Anarock Property Consultants.
Instead, it may be “much more feasible” to convert unused offices into storage spaces for e-commerce businesses that have seen a boom in demand during the pandemic, he said.
Conversions of offices into modern manufacturing facilities, such as 3D printing, vertical schools or urban farms are a much more viable option, agreed Tony Matthews, professor of urban and environmental planning at Australia’s Griffith University.
In addition to being difficult and expensive, converting offices into housing can also have “negative social consequences,” he said.
For example, Britain’s plan to rebuild old offices and shops with simpler approvals created some 65,000 apartments, but was “catastrophic” due to lack of transport and public services and social isolation, he said.
“At first glance, it seems like a good idea and efficient use of space and resources. In reality, the experience is often quite different,” said Matthews. -Thomson Reuters Foundation
