As a German housing disaster looms, much more must be done to repurpose legions of doomed office space

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In the early 1980s the Bürostadt Niederrad, in the western part of Frankfurt, still just about represented the future of modern office working. Conceived in the 1960’s as an office centre surrounded by nature, at its peak it drew in 25,000 office workers daily. From the nearby autobahn, its skyline WAS the embodiment of Frankfurt’s success, a concentrated jungle of high-rises committed to corporate productivity, largely unencumbered by bars, restaurants, retail outlets, or any other distractions for its daily inhabitants.

By 2006, fully 30% of its offices were vacant, and occupants of the other buildings tended not to boast about their workplace. No part of Frankfurt was emptier or more lifeless after 5pm. The city authorities decided something had to be done. By 2010 plans for a wholesale repositioning of the office colony were in full swing.

Over the years the Bürostadt Niederrad became the Lyoner Quarter, a major mixed-use neighbourhood development that has since seen 2,400 new apartments created out of office conversions, new developments and densification. A further 2,600 units are under construction or in the planning phase, while further available land should ensure that up to 6,000 apartments, for 12,000 people, will get built.

It’s widely considered a success. Big institutions like Deka Bank are now moving part of their operations back into the quarter, persuaded by its attractions as a location for work and private life. New modern office construction in the quarter will accommodate 3,500 new jobs. The whole Niederrad project, along with many other office developments that find themselves at the wrong end of - or right outside of - town, are at the forefront of a new focus on office conversion to create new living accomodation.

Be under no illusion. Germany is heading for a housing disaster, with the current shortage of accommodation about to become far worse. Next year barely 200,000 new apartments are expected to be built, a laughably long distance from the 400,000 the current government committed to building annually, of which a quarter were to be of the “affordable” variety. Some chance of that.

At the current rate of increase of building costs, which housing association GdW’s boss Axel Gedaschko has just put at a further 15.3% up on last year, and still-rising interest rates, any new residential building coming on the market would have to charge a minimum of €18 per sqm - unaffordable for most people.

Of some comfort is a new report by JLL, which calculates that conversion of office space in the Big 7 German cities could be completed for between €1,700 and €2,200 per sqm - about half the cost of new construction. JLL sees potential for 20,000 apartments from empty office buildings by 2025.

A study last year by the influential Kiel-based construction research institute ARGE went so far as to put the cost of conversion at a third of conventional new building, citing €1,200 per sqm. It sees potential for 4.3 million new apartments out of converting existing buildings. A further 1.5 million apartments could be created by densification of existing buildings, adding an extra floor on top for less than €2,300 per sqm. Yet more potential is slumbering at the top of occupied office buildings (560,000 units) and retail outlets, including downtown shopping malls and multi-story car parks (420,000 units).

This all sounds great. Of course, we’re nowhere near tapping into even a tiny fraction of this potential. On densification alone, adding an extra floor sounds fairly doable - but fails in most cases at the first hurdle. Poor planning, lack of proper permits, lack of conformity with nearby properties, bad budgeting, and - often, not least - the hostility of tenants and neighbours, whose objections can stymie the project, means the project doesn’t even get past the local authorities.

For office conversions, the future theoretically looks rosier, given that many of them are facing a very uncertain future, and may well fall through the cracks of the ever-tightening ESG grid. But in reality, office conversions are very complex. The date of building may well prove an unsurmountable problem, if the building is too modern. Zoning codes can be irrational, designed for another era. Fresh plumbing to redistribute pipes for bathrooms can become a building nightmare. There are literally tons of regulations that are brought into play to prevent offices being converted into housing, from the height of the ceilings to the lack of natural light, too much noise, or insufficient fire protection.

The fact is that nearly any motion to convert an office building into residential initially runs up against a building code that says NO. The housing ordinances that specify the minimum size of a dwelling, the orientation of its balcony, the amount of parking spaces required (though most of them won’t be needed) all combine to make a conversion almost an impossibility. Most of these barriers to building have little in common with how people want to live their lives today, while the building regulation codes have ballooned in size, to thousands of individual edicts. Complying with even a fraction of these can rapidly bring the costs of conversion up to comparable costs of new building.

But as the example of Bürostadt Niederrad shows, what really matters in driving conversion projects forward is the political will, at a local level, to overcome archaic and architectural absurdities, and smooth the path to more conversions.

Lower Manhattan is a good example of where the city showed the will to repopulate, replacing ailing office buildings with residential towers. Fifty years ago, less than 700 people lived there. Today it’s 83,000, families now playing where sandwich-eating office workers in the financial district used to descend during the day, to desert the whole neighbourhood on outbound trains in the evening.

Calgary, in Alberta, with now one in three of its offices vacant, has just launched a funding scheme to help developers try out conversions of its office towers. It has so far raised more than €100m in grants. With the German government certain to fail on its new-build projections, it could do worse than studying the Canadian example to see what it can learn.