Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
Los Angeles has approved a sweeping update to its adaptive reuse rules, allowing many newer commercial buildings to be converted into housing across the city, according to the Los Angeles Times. The change arrives as remote and hybrid work continue to suppress office demand, leaving millions of square feet unused and forcing cities to rethink how business districts function.
Developers are already moving projects forward. One downtown-adjacent office tower is being redesigned into nearly 700 apartments after years of struggling to attract office tenants. A former corporate headquarters in Sherman Oaks is also scheduled to become housing rather than offices after workplace demand failed to recover.
City planners say the policy is meant to address long-term vacancy rather than a temporary downturn.
Work Patterns Are Rewriting Urban Space
The previous conversion rules, adopted in 1999, mainly applied to older downtown buildings. The new ordinance allows conversions of commercial buildings roughly 15 years old across much of Los Angeles with administrative approval instead of lengthy political review.
The change expands eligibility far beyond the urban core into business corridors and neighborhood commercial districts. Industrial properties, retail centers and even parking structures can now qualify.
Los Angeles has more than 50 million square feet of vacant office space. Much of it sits in areas built for daily commuters whose routines changed after the pandemic. Instead of waiting for companies to refill offices, the city is effectively planning for a smaller in-person workforce.
Developers say predictability is the main impact. Shorter approval timelines make projects easier to finance and allow already designed office projects to be redesigned into apartments, often with smaller units to lower rents.
The policy also updates continuously as buildings age, meaning additional properties become eligible each year.
From Commuter Districts to Mixed Neighborhoods
City officials point to earlier downtown conversions in the early 2000s that turned a primarily business district into a residential neighborhood. This time the goal is broader: adapting entire corridors that once depended on daily office workers.
Fewer workers commute daily, which weakens retail and office demand but increases demand for housing near former employment centers. Conversions allow cities to reuse infrastructure rather than wait for office demand to return.
Other cities have taken similar steps, often pairing conversions with financial incentives. Los Angeles has not widely adopted subsidies yet, and developers warn financing remains difficult due to higher interest rates, construction costs and local transfer taxes.
A Future of Work Problem More Than a Housing One
The conversion push is less about replacing apartments that were never built and more about adjusting to where work now happens. Employers need less centralized office space, while workers spend more time in residential neighborhoods. Buildings designed for a five-day commute economy no longer match daily usage patterns.
That mismatch shows up in labor and real estate markets simultaneously: companies are cautious about long-term office leases, landlords face persistent vacancy, and cities lose foot traffic tied to commuting schedules.
Adaptive reuse changes the function of business districts instead of trying to restore them. Office floors become residences, retail shifts toward local services, and employment centers evolve into mixed-use neighborhoods built around partial in-person work.
The ordinance does not guarantee construction. Financing challenges and rent levels will determine how many projects proceed. But it signals that Los Angeles is planning around a lasting change in workplace behavior rather than a temporary disruption.
