Since the COVID-19 pandemic, office space is plentiful and residential real estate supply is inadequate in many global cities. Yet, even if all vacant office buildings were converted to residential space in many of these urban areas, according to McKinsey Global Institute partner Jan Mischke, senior partner Aditya Sanghvi, and colleagues, available housing would increase by only 3 percent.
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A bar graph shows what the estimated increase in housing stock would be for a selection of global superstar cities in Asia, Europe, and North America if all excess office space were converted into residences by 2030. From left to right across all cities studied, the maximum increase would be 2.6 percent. From left to right, highest to lowest, the housing stock increase percentages are as follows: Shanghai, 2.6; Boston, 2.5; London, 2.1; Beijing, 1.6; San Francisco, 1.5; Munich, 1.4; Chicago, 1.4; New York City, 1.0; Tokyo, 1.0; Atlanta, 0.8; Toronto, 0.7; Paris, 0.5; and Houston, 0.4.
Footnote: Excess office space means space projected to be vacant beyond what would result from the structural vacancy rate (defined as the average vacancy rate from 2014 to 2019).
Source: McKinsey Global Institute analysis.
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To read the report, see “Empty spaces and hybrid places: The pandemic’s lasting impact on real estate,” July 13, 2023.