As New Orleans struggles with a lack of affordable rental units, could the answer be right in the CBD?
Nationwide many office buildings are sitting empty with remote work quickly becoming the norm for many companies. That has some calling for empty office spaces to be converted into apartments, but is that economically feasible?
“Well if it was it would have already been done years ago,” real estate analyst Arthur Sterbcow told WWL.
Sterbcow said converting office space into residential space is cost-prohibitive, specifically because of the costs of making the buildings residential plumbing and ADA compliant. It’s so cost-prohibitive that Sterbcow said it is generally more economical to buy up a block of unused commercial buildings, knock them down, and build new residential units in their place.
“Anyone who has tried to go back and renovate an existing home, a fixer-upper or a flipper, they know how much money you have to put into these properties to put them into service,” said Sterbcow who noted that the New Orleans metro isn’t facing the same remote work-related crisis in office space seen in other areas.
Turning empty office buildings into hotels was suggested as a somewhat more economical route, in part because the cost of renovation was such that it would prompt residential rents far above what is considered affordable.
Sterbcow argued there is already a massive opportunity to address the city’s housing shortage that’s just been sitting there, rotting while city leadership ignores the issue.
“I would knock these blighted houses down that are being ignored by people so fast it would make your head spin because that is what is suppressing some of the renovation in these areas,” said Sterbcow. “Absolutely first order of business, it would help minimize the crime problems and help reactivate the housing market in those particular areas.”