How to Fill Empty Offices With Co-Living Residents

In most of the United States, individuals who work full time for minimum wage can’t afford to rent a one-bedroom apartment. And buying a condo or house is out of the question even for many higher on the income scale.

Meanwhile, hundreds of thousands of square feet of building space sit vacant and unused in the heart of our cities—prime real estate, near jobs, highways, and public transportation.

Office buildings.

That paradox animated an October gathering of housing experts and policymakers at the Washington offices of The Pew Charitable Trusts called “Reimagining America’s Empty Offices.” The meeting built on a series of reports from Pew and the global architecture and design firm Gensler that explored a novel way to transform vacant office space into housing.

Focusing on 10 cities including Washington, Chicago, and Los Angeles, Gensler conceived of an innovative layout that placed private, fully furnished, one-room micro-apartments along the office building’s exterior, where windows are located. Shared kitchens, living rooms, bathrooms, and laundry would be located near the building’s core, near elevators and existing plumbing.

Projected construction costs would be 25% to 35% less than the cost of converting an office building to traditional apartments. Projected rents would range from $700 per month in Houston and Albuquerque to $1,000 in Los Angeles, Seattle, and Washington—well below the cost of a studio.

But will this concept work? Will anyone want to share a kitchen with 20 strangers on the 10th floor of a glass-and-steel high-rise building? Who will provide funding? And what will it take to get it done?

The opportunity—and the need

The opportunity is certainly there. In the nation’s largest metropolitan areas, about 20% of all office space was vacant in 2024. In Denver—one of the cities on which Gensler focused—the downtown vacancy rate was 29%. In Minneapolis, it was 23%. In Phoenix (also 23%), the city’s tallest building, the 40-story Chase Tower, sits abandoned and entirely empty.

Meanwhile, according to federal data, in 2023, nearly half of the country’s renter households (more than 22 million) were considered “cost-burdened,” spending more than 30% of their income on housing. Roughly one-fourth of all renter households spent more than half their income on rent, qualifying them as “severely” cost-burdened.

And the U.S. Department of Housing and Urban Development counted 771,480 individuals who did not even have a home in 2024—an 18% increase over the previous year, and the highest total ever recorded.

“Clearly, what we are doing is not working,” Caitlin Sugrue Walter, the head of research and innovation at the National Multifamily Housing Council, told the October gathering.

“Much of the housing being built today is simply unaffordable to the average renter,” said Gensler architect Sean McGuire, who worked on the Pew/Gensler reports.

Benefits for cities as well as individuals—and real challenges

Unless adapted for new purposes, these office buildings might sit moribund for a long time, said Tracy Hadden Loh, an expert in commercial real estate who is a fellow at the Brookings Institution. Even before COVID-19 wreaked its havoc, companies had been reducing their needs for office space, she pointed out.

Loh focused on the benefits to cities of bringing idle buildings to life—among them, a higher property tax base, employees and customers for downtown businesses, and a breath of life in the heart of a city. She called it a “placemaking challenge.”

Still, transforming office space into micro-apartments will not be easy.

One of the most difficult challenges will be figuring out how to pay for conversions. Financial gaps showed up in all 10 cities in the Pew/Gensler reports. Mike Eriksen, a professor of economics at Purdue University’s Daniels School of Business, which co-hosted the event, said a variety of conventional and innovative funding strategies including bond-funded loans and tax increment financing could mean minimal public subsidies.

And in practice, when lenders learn more about the concept, there is buy-in.

“We were able to build our first [co-living projects] due to the strength of our long-term relationships with local banks. Especially early, there was a lot of concern that like, ‘Will this work here?’” said Angela Rozmyn, director of sustainable development at Seattle-based Natural & Built Environments. “But once it worked, that narrative started to shift. We actually were able to finance the very first Freddie Mac loan for small units in the country.”

Still, another obstacle is that many cities restrict the number of unrelated persons who can live together, effectively banning co-living. Others have rules, such as minimum parking requirements, that would drive up costs so much that this housing would become infeasible.

But Gensler focused on cities that have eliminated major regulatory hurdles. Chicago, for example, has a pilot program allowing residential buildings to have only mechanical ventilation (bedroom windows that don’t open). Eliminating the need to replace high-rise windows would significantly reduce construction costs.

Although some municipalities oppose the construction of all types of multifamily housing, Samuel Hooper, a lawyer with the Institute for Justice who works on housing law, told the gathering some states and localities are passing legislation to allow co-living and housing in commercial zones. He said states as diverse as Rhode Island and Montana, Washington state and Texas have seen the potential of co-living to help ease their shortage of low-cost housing, enacting legislation to enable development of co-living projects.

And this year, New Mexico went one step further, authorizing $120 million to support the development of low-cost housing and reduce homelessness. When New Mexico issued a request for proposals to use this money, it listed an array of eligible projects. Among them was “the new construction or rehabilitation of existing facilities that provide micro-apartments, dorm-style units, or single-room occupancy developments.”

How co-living already works in practice

The idea of converting empty office space into dormitory-style housing might be new, but shared housing is not. In 1950, more than 10% of major cities’ rental units consisted of single-room occupancy hotels, boarding houses, and other forms of what is now called co-living. Many of those rooms rented for prices that are unimaginable today—$100 to $300 per month, in 2025 dollars.

Several providers of today’s co-living units discussed how they can offer low cost, privately managed options. Benjamin Maritz, founder and managing partner of Great Expectations, which manages 6,000 units concentrated in Oregon and Washington, said his company is “an affordable housing provider”—without government subsidies.

“In the Seattle market—one of the most expensive places in the world—you can very comfortably rent a studio apartment on a minimum wage salary,” Maritz said. “That is not something that was true five to 10 years ago, and I don’t think it’s true in many other parts of the country. We do have a high minimum wage—it’s almost $21 an hour—but there are really great options around that $1,000 price point.”

But managing co-living is not like managing traditional apartments. Atticus LeBlanc is the CEO of PadSplit, a technology company that matches renters with co-living owners from Georgia to California (“the largest marketplace for co-living in the U.S.,” with over 26,000 units, LeBlanc said). The median income of PadSplit’s residents is $27,000, LeBlanc told the gathering. To serve these renters, PadSplit has eliminated security deposits and if tenants encounter problems at one co-living rental, they can transfer to another one for free. A typical tenant stays for nine months. The median turnaround time for a vacant room is nine days. “The cost to turn that room is $76,” LeBlanc said, dramatically lower than preparing a traditional rental for new tenants.

“It’s a different style of leasing,” said Kirby Howell, vice-president of co-living at Nest DC, a management firm. In Washington, “You’re not getting as many 12-month leases, you’re stacking together short-term [lease] after short-term [lease]. … People are moving in and out with a suitcase.”

The Gensler design team at the event discussed how they anticipated these challenges when preparing their city-by-city reports, budgeting for on-site management, security, and daily cleaning of common spaces.

Rozmyn rounded out the picture, explaining that a relatively small share of their residents are students or new to the workforce: “We have people who have lost a spouse and want to stay in their community but don’t want to live in their big house all alone anymore. We have people who work at the grocery store or the coffee shop, [who] cut hair, who live and work in the community. It’s their community. It’s where they want to be. Otherwise, they’re spending two hours on the road to drive to housing that they can afford.”

Conclusion

The nation’s housing shortage and availability of office space for conversion to living space mark the confluence of a historic challenge and opportunity. Policymakers, mission-oriented investors, and investors all have a role to play.

Co-living “should be legal everywhere, not just the big scale like office to residential conversion … but also small scale [such as] renting a room in a single-family house” the Institute for Justice’s Hooper told the audience. “This is going to hopefully be the next frontier of a lot of zoning reform work.”

And more than that, it’s about enhancing communities and helping people thrive.

“This isn’t just about buildings, it’s about people,” said Kil Huh, Pew’s senior vice president. “It’s about restoring housing options that once served low-income residents, students, seniors, and various workforce sectors and newcomers. It’s about creating more connected communities, not just units.”

Gabriel Kravitz works on The Pew Charitable Trusts’ housing policy initiative.