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Empty office spaces can contribute to easing housing scarcity

For approximately two years, the proportion of employees working from home in Germany has remained...
For approximately two years, the proportion of employees working from home in Germany has remained steadfast at over a quarter and more than two-thirds of businesses.

Empty office spaces can contribute to easing housing scarcity

Transforming unwanted office spaces in major German cities could generate living spaces for over 100,000 people, potentially solving the housing scarcity issue, but economic obstacles persist, according to research from the Ifo Institute.

The Ifo Institute, along with real estate consultant Colliers, conducted a study for Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart, and Düsseldorf. The findings suggest that 60,000 new homes could be built across these cities with approximately 100,000 inhabitants by repurposing currently vacant office spaces due to the shift towards remote work.

Ifo researcher Simon Krause commented, "Vacant offices can help alleviate the housing shortage in big cities, but only a small portion of the potential conversions are financially viable." The investigation revealed that roughly 30% of vacant office areas are technically and legally adaptable for residential use, amounting to around 2.3 million square meters considering the office vacancy rate.

Taking into account the projected reduction in demand for office space in the future, an additional 3.5 million square meters could become available. Assuming a 20% loss during conversion, assuming an average apartment size of 77 square meters, and a household size of 1.7 people, approximately 60,000 apartments for 102,000 individuals could be built.

Colliers study co-author Andreas Trumpp suggested, "Given the limited feasibility of residential conversions, innovative remodeling ideas are required." Partial conversions, as well as neighborhood development to meet the needs of housing, commerce, and leisure, are also necessary.

The proportion of employees working from home in Germany has remained steady at around a quarter for almost two years, with over two-thirds of companies implementing the practice. This study anticipates a decrease of 12% in office space demand by 2030.

Large service providers, who consume the most office space, are reducing their office footprint and relocating to modern, centrally located sites. According to Krause, "One in four large service companies is reducing its office space, and 20% are relocating at least one office." The increase in remote work is expected to further exacerbate office vacancies and the risk of unused buildings.

The study conducted by the Ifo Institute and Colliers highlights that economically viable conversions of vacant offices for residential use only make up a small portion of the potential conversions, impacting the economy's ability to fully exploit this opportunity for addressing housing scarcity.

The persistent economic obstacles in repurposing vacant offices for residential use could hinder the growth of the economy by limiting the creation of new living spaces in major German cities.

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