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Covid-19 an opportunity to tackle our housing crisis

The upending of normal life by Covid-19 offers Aotearoa an opportunity to rethink the use of our buildings, writes Cat MacLennan

Amsterdam’s famous canal houses have endured for centuries as a result of the adaptability of the buildings.

When they were first constructed around the three massive waterways built in the city in the early part of the seventeenth century, the buildings served the dual functions of downstairs workplaces and storage areas for merchants, and upstairs residential quarters.

In the four centuries since then, the renowned narrow buildings have been repurposed back and forth between residential and commercial spaces.

And Amsterdam to this day continues to explore the boundaries of urban innovation. In 2014, the city unveiled De Ceuvel – 1250 square metres of office, studio and commercial space constructed on the polluted land of a former commercial shipyard in Amsterdam’s industrial north. Sixteen old houseboats were used as the core of the design and row boats were repurposed as outdoor seats. 

NSDM Wharf is another example of Dutch vision, with an industrial harbour area the size of ten football pitches being repurposed for studios and then becoming a magnet for festivals, dance parties and exhibitions. A third innovative urban project is eastern Amsterdam’s IJburg, which consists of floating houses moored off reclaimed land.

The upending of normal life by Covid-19 offers Aotearoa an opportunity to rethink our use of buildings and also to take steps towards solving our housing crisis.

The Level 4 lockdown has meant that hundreds of thousands of New Zealanders who normally travel to work in offices every day are instead working from home. The benefits of this are obvious after only four weeks. Working remotely means that lives have been saved because there are far fewer traffic accidents.

The slashing of the number of vehicles on our roads has meant a corresponding drop in pollution. At the end of the first week of the lockdown, Niwa recorded huge plunges in traffic pollution and emissions in New Zealand’s largest cities. In Christchurch, there was a 79 per cent drop in the amount of nitrogen oxide pollutants at the Riccarton Road monitoring station. Wellington’s central business district saw a 75 per cent decline in pollutant levels, while in Auckland nitrogen oxides measured in Queen Street were down by 51 per cent.

The fact that in 2020 so many New Zealanders commute every day to office buildings to do work they could do just as well at home, shows that workplaces have not fully adapted to technology which became available three decades ago. Now is our chance to change that.

Overseas the picture is the same, with images circulating on social media showing dramatic improvements in visibility as pollution clears in Delhi, Hong Kong, Bangkok, Beijing and Sao Paulo. Of course, the reduction in pollution is not simply due to fewer cars on the road but also because of the shuttering of much economic activity.

Working remotely also means that workers have far more time to spend with their families. People who spend an hour each day commuting now have five extra hours a week for family, exercise and other activities. Those whose commute normally takes two hours a day have 10 additional hours.

For workers on the minimum wage or slightly above it, this is a significant change. They commonly work 60 or 70 hours a week to try and get by, because their wages are so low. Long working hours combined with lengthy commutes mean that they have very limited time with their families.

More time with their children, partners and other relatives is something they crave. Remote working also means that workers save the money they normally spend on commuting, with this adding up to a significant sum each year.

A future with fewer workers on roads and public transport would mean that less money would have to be spent on building and maintaining more motorways, and on providing buses, trains and other forms of public transport.

A permanent move to working from home would also offer major cost savings for businesses. Rents make up a significant proportion of the cost of running a company. That is highlighted by the difficulty closed businesses are facing at present in seeking to make rental payments when they have no income. With staff working from home, businesses would either no longer need offices, or could make do with much smaller and cheaper premises.

In the United States, it is suggested that Covid-19 might collapse office rentals by accelerating the trend towards Americans working from home, in the same way that the advent of online shopping slashed mall returns. 

Global Workplace Analytics calculates that 56 per cent of American have jobs involving at least some tasks which could be done remotely, but in 2018 only five million employees – 3.6 per cent of the United States workforce – worked remotely half-time or more. However, regular remote working has increased by 173 per cent since 2005 and Global Workplace Analytics forecasts that 25 to 30 per cent of the American workforce will be working remotely multiple days a week by the end of 2021.

The firm estimates that American employees save between US$2500 and $4000 per year by working remotely half-time, with the savings consisting mainly of travel, parking and food costs. On top of that, half-time telecommuters save the equivalent of 11 work days a year in time that would otherwise be spent commuting.

For businesses, a typical employer would save an average of US$11,000 per half-time telecommuter each year, with the primary savings resulting from increased productivity, lower real estate costs, and reduced absenteeism and turnover.

In New York, investment banks and professional and financial services firms are considering whether they can get by with less office space in future, after Covid-19 forced them to trial remote working.

Of course, working from home is not feasible for many people. The essential workers who are keeping New Zealand and other nations going during the Covid-19 crisis generally carry out tasks which require them to be in a workplace.

In addition, at least 400,000 New Zealanders live in stressful, crowded homes or do not have homes at all. Some live in cars or garages. A majority of them are Pasifika families. 41,000 people are severely housing-deprived, meaning that they are without shelter, in temporary accommodation, sharing accommodation or surviving in uninhabitable housing. One third of those people are Māori.

Working from home is not a feasible option when a house is overcrowded, lacks a reliable fibre connection, and is damp and moldy. If there are small children and grandparents present during the day, finding a quiet space to work can be impossible. Pressure to carry out jobs remotely would simply disadvantage these workers further.

It is unclear exactly how many kiwis have been working from home since the Level 4 lockdown began. Business NZ estimated at the start of the move to the top alert level that at least ten per cent of the country’s workforce would begin working remotely – around 200,000 out of a workforce of two million.

That higher-than-normal number of remote workers can be expected to continue to be the case in this country for some time to come, as the Government will want kiwis to maintain social distancing even as the toughest lockdown restrictions are gradually relaxed.

Just four weeks has been enough time to demonstrate that there are many benefits to working from home. Now, we should work out how this can be done permanently.

This is because, in addition to the benefits discussed above, remote working also offers New Zealand the chance to tackle its housing crisis. If tens or hundreds of thousands of kiwis work from home in future, firms will no longer need nearly as many office buildings.

That offers the potential for such structures to be repurposed into housing. 

There are many examples of this already being done and the fact that such transformations have been occurring for a number of decades means there is much we can learn from what has gone before.

In the early 1990s, London and Toronto both had high office vacancy rates. The Canadian city took a proactive approach to the issue by playing a key role in assisting with redevelopments to residential purposes. More than 9000 new homes were created in Toronto, while London’s stance of local authorities being supportive but not proactive resulted in fewer transformations.

New York in 1995 initiated the Lower Manhattan Revitalisation Plan to permit and underwrite the conversion of office buildings into apartments. Subsidies were provided and the project focused on creating studios and small apartments for first-time renters. More than 60 office buildings were repurposed between 1995 and 2005.

In Washington DC, the Montgomery County Coalition for the Homeless in 2008 bought an office building and transformed it to provide supportive housing for those previously on the streets. The city’s inclusionary zoning laws helped get the project off the ground, because of their incentives to build affordable housing.

Windows were punched into the structure to ensure enough light in the units and facades at either end were transformed into meeting places for the community. The project created 32 affordable units, while retaining retail space on the ground floor.

In 2010, two office towers which had previously housed the Environmental Protection Agency were transformed into 535 apartments, with 108 of the homes being affordable.

Factories, warehouses and churches in Washington have also been repurposed for housing. The Flats at Union Row were created by transforming old warehouses into 59 townhomes and 216 condominiums, ranging in price from US$270,000 to $1 million. A helicopter factory, a bread factory and a laundry have similarly been converted into residences.

When it was found in 2016 that Fairfax County in Virginia had 20 million square feet of vacant commercial real estate, planning rules were amended to allow the properties to be transformed for educational purposes, including schools and childcare facilities. Alexandria approved the conversion of an office building into condominiums.

In Pittsburgh, a 7400 square foot former office building in the heart of the cultural district was redeveloped to provide 60 workforce and affordable apartments for people earning between 60 and 120 per cent of the area’s median income. The project was funded using money from federal low-income housing tax credits, local public agencies, the Pittsburgh Cultural Trust and philanthropic foundations. It won an award as a national housing model.

Across England and Wales, in the years between 2015 and 2018, eight per cent of new homes were created by repurposing office buildings. In some areas the percentages were far higher: office to residential conversions accounted for 73 per cent of new homes in Stevenage and more than half of the additional housing stock in Harlow, Hounslow, Newcastle-under-Lyme and Basildon.

However, this was done partly at the expense of affordable housing, with England introducing rules in 2013 to allow developers to convert offices into residential spaces without building any affordable homes. Between 2015 and 2017 30,575 housing units were created from offices, but the policy resulted in a potential loss of 7500 affordable homes. 

In Sydney, the old Water Board Headquarters was transformed into a boutique hotel and apartment block.

In this country, Wellington has been repurposing unused commercial spaces for more than 25 years. The old Hannahs’ shoe factory was turned into an apartment block in 1996 by the Wellington Company, which then converted eight office buildings into apartments and student accommodation.

Other Wellington transformations include McKee Fehl’s conversions of three office blocks to student housing and the repurposing of the former ANZ building into a 390-room hall of residence. A seven-storey office block on The Terrace was converted to 54 apartments and the former Department of Internal Affairs, Conservation Department and Inland Revenue buildings are all now residential spaces.

Of course, there are many issues to overcome in converting office buildings into housing. These include affordability, ensuring that apartments will be high-quality and provide a good standard of living for families, access to outdoor spaces, and planning and resource management issues.

But, by forcing many people to work from home, the Covid-19 crisis has given us the opportunity to reduce pollution, give workers more family time and address our housing crisis. We should take advantage of that gift.

The world wide web was invented in 1990 and became publicly available in August 1991. The fact that in 2020 so many New Zealanders commute every day to office buildings to do work they could do just as well at home, shows that workplaces have not fully adapted to technology which became available three decades ago. Now is our chance to change that.

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