Reclaiming Old Spaces for the Future
What Should We Do With Old Office Spaces?
When every other news headline is about the surging popularity of the startup scene or the rising demand for urban real estate, it’s easy to forget that the office space market is not all about growth. When the workforce congregates around major urban centers, it’s easy for pockets of the state to get left behind.
Office vacancy is as much of a problem as inflated office prices. In quiet areas outside of the major urban centers, especially in parts of the city dominated by low-growth industries like government, empty office buildings are not hard to find. By themselves, they serve no purpose; they sap up tax money to maintain, and they don’t generate any revenue in return.
Arguably, what’s worse than the inefficiency of empty space is the psychological effect it has on the neighborhood. Empty buildings convey a sense of decay and irrelevance; they scare away newcomers who want to work somewhere vibrant and central, dropping property values around them as a result. If the neighborhood is unappealing to developers, it’ll be harder for conveniences like quick lunch options and cafes to set up shop there—and the lack of those conveniences would make the area all the more unappealing for business looking to lease office space.
The decline of property values hurts local governments as much as businesses. In Fairfax, a Virginia county near DC where the Washington Post gathered data from, property tax revenues dropped $23 million since summer 2013.
On the bright side, governments have the power to help lift undervalued areas out of depression. Increased public transit, reworked zoning, and fixes to other miscellaneous infrastructure are all ways in which municipal and state governments can help address the problem of unused real estate. If the government can convince landlords that the area is worth investing in, some of the aging office buildings may get remodeled.
For example, a building called the Silverline Center recently received a $35 million renovation. That might sound expensive, but the building was originally half-empty, and it’s now almost fully leased. Plenty of companies would be eager to snatch a space at a newly-renovated building for less than they’d pay in a major city or central neighborhood. And with the tenants brought in by Silverline, small business owners will have more reason to open restaurants and bars nearby. Hopefully this will result in a spiral of rising property values rather than falling values.
To address this problem, Fairfax county has formed a county revitalization office, comprised of both government officials and business leaders.
Unsurprisingly, their opinions are divided on what the unused space should be used for. Some are proposing setting some of it aside for use as low-income housing, while others want to convert them into schools and other public services. Depending on the location and building specs, these options may be equally valid. Increasing education has long-term benefits for everyone involved, and the area will need a strong community to continue to develop.
Breathing life into an underdeveloped area is an uphill battle. It’ll take cooperation between governments, small businesses, and property developers to bring in money. The challenge is in understanding what tenants want and finding a way to deliver it.