Cities across the US need more affordable housing. According to Mohammad Shwiqi, a groundbreaking PropTech founder and Harvard-educated real estate developer, solving this problem should involve repurposing existing buildings, rather than just trying to raise new construction.
“We don’t need to build more,” Shwiqi says. “Millions of square feet have already been built. The housing market needs supply, and these underused properties can become part of that supply if we unleash innovative designs.”
Here’s why Shwiqi believes the future of real estate will be adaptive, not additive.
The state of affordable housing in the US
Depending on the estimation method used by different research teams, the US currently requires approximately 1 to 5 million additional residential units to meet existing demand. For instance, the Brookings Institution calculates that the US was 4.9 million units short in 2023, while Moody’s Analytics and the Urban Institute estimate a shortfall of 2 million.
Many experts, such as those at the Harvard Joint Center for Housing Studies and the National Low Income Housing Coalition, emphasize that finding housing is most challenging for low-income families.
Meanwhile, a significant portion of the US’s office buildings continue to go empty or underused even years after the COVID-19 pandemic sent many office workers home.
Vacant office buildings and commercial real estate
According to separate analyses from the Federal Reserve Bank of Chicago and Moody’s Analytics, the national vacancy rate for offices was approximately between 13 and 20 percent in 2023 and 2024. Some metropolitan areas, such as San Francisco, Austin, and Seattle, suffer from markedly higher rates.
These vacancies translate into an estimated 900 million square feet of empty existing office buildings alone. Other kinds of commercial real estate could open up further floorspace.
For Shwiqi, the answer to the American housing crisis lies not in constructing new units, but rather in adapting existing commercial buildings for residential purposes.
Adapting buildings into housing, not adding new housing units
“These already built structures might be outdated, underutilized, or even empty, which means they’re available to be transformed into housing,” Shwiqi says. “We need to adapt our existing buildings to give them a second life. This process is referred to as ‘adaptive infrastructure.’”
Shwiqi believes that adaptive infrastructure as a large-scale solution shouldn’t be viewed as a niche market. “The housing crisis is nationwide, and this solution likewise needs to be deployed in high-demand areas across the country,” he says.
Shwiqi does not underestimate the scope of this challenge, however.
Determining what commercial real estate should be repurposed
“It’s not financially feasible to convert all empty or underutilized commercial buildings for several reasons,” Shwiqi explains. “For example, offices often don’t have adequate windows to provide residents with natural light. And, depending on their age, their plumbing, HVAC, and electrical systems may require a major overhaul.”
For this reason, each project needs to be evaluated on an individual basis. “If the assessment proves favorable, then the project will also likely need to be custom-designed,” Shwiqi says, “yet studies show that a significant slice of existing commercial space could be effectively transformed into housing.”
The results of those studies are why, as Shwiqi explains, vacant and outdated commercial space and office buildings should be viewed as a source of valuable potential.
A chance for design innovation
“Repurposing these buildings is a challenge, but it’s also a great opportunity to think outside of the proverbial box and create innovative new designs,” Shwiqi says. “It’s a chance to imagine flexible, inclusive, and sustainable housing solutions that align with what today’s residents need. Many will lend themselves to mixed-use or hybrid spaces that promote community and enliven the residential parts of the building. The whole will be greater than the sum of the parts, as the saying goes. This approach also has the advantage of not wasting land.”
While certain cities and states in the US have outlined policies for the adaptive reuse of housing infrastructure, such as California, Wisconsin, Seattle, Denver, and Boston, most other communities have zoning laws standing in the way of similar action. This misalignment is why Shwiqi also advocates for reform to introduce similar policies across more of the US.
The need to change zoning laws
Many experts, such as those at the Terner Center, have found that local zoning and land-use codes, including density limits, permitting delays, and regulations related to parking, hinder the transformation of commercial real estate into housing. Sometimes, these regulations serve to increase the expense involved in a potential conversion, and at other times, they block those conversions outright.
“Developers can’t take advantage of prime opportunities to create affordable housing if the local laws designate another use for that space,” Shwiqi explains. “Permitting needs to become simpler and easier. Zoning shouldn’t stand in the way of fast, cost-effective conversions in high-demand areas.”
The future of real estate
Indeed, the future of real estate might not revolve around the construction of more shiny new towers or new tracts of suburban sprawl. Instead, it could focus on a renaissance for existing buildings that have been languishing due to a lack of care.
“While the challenges might be great, it’s still an exciting time to be in real estate,” Shwiqi says. “With an adaptive approach, we have the opportunity to create the residences people need while reinventing housing for today’s America at the same time.”
