North Carolina Bill Aims to Turn Empty Offices into Housing as Charlotte Vacancy Hits 25%
To streamline the conversion of underused commercial buildings into residential units, a new bill has been introduced in the North Carolina Senate, SB 499, that would help meet the increasing demand for affordable housing.
The proposal comes as Charlotte contends with an office vacancy rate hovering around 25% — the area is projected to see 5 million square feet of vacant offices by the end of next year, according to Cushman & Wakefield data — making it a ripe opportunity to reimagine empty properties.
The bill would empower local zoning boards to approve conversion projects without requiring additional zoning changes or conditional use permits, provided that all existing building and fire codes are met. This legislative move could accelerate the redevelopment of outdated office buildings into much-needed multi-family housing in one of the state’s fastest-growing cities.
Patrick Gildea of CBRE acknowledged the complexities involved in such conversions. “The demand is picking up, but there’s a certain segment of office buildings that are functionally obsolete due to a variety of reasons,” Gildea said. He noted that only a small number of properties have the structural characteristics and layouts required for a feasible and cost-effective transformation into residential space.
One successful example of this approach is Charlotte’s former Duke Energy Headquarters. Its continued redevelopment into a mixed-use project, Brooklyn & Church, is part of a wider trend to rehabilitate empty office space for housing and retail use.
They don’t need to, though, Gildea stressed, the demand for employees to be in-office is strong in many industries even as remote and hybrid work models persist. Particularly, the tension between changing workplace patterns and greater trends of availability in office infrastructure further complicates the real estate dynamic.
Though SB 499 is a promising step toward addressing housing shortages, experts caution that plenty of structural and financial constraints could prevent it from spreading. Even so, the bill embodies a greater willingness to rethink urban growth in the aftermath of the pandemic as local and state leaders search for new ways to address evolving economic and residential demands.
