Adaptability is key to solving Hawaii’s housing crisis
from Grassroot Institute of Hawaii, October 15, 2023
Can Honolulu kill two birds with one stone by way of “adaptive reuse” projects?
Speaking on Sunday with H. Hawaii Media radio host Johnny Miro, Jonathan Helton of the Grassroot Institute of Hawaii presented adaptive reuse as a possible solution to two pressing issues in Honolulu: downtown office vacancies and Oahu’s housing shortage.
Helton, Grassroot policy researcher, explained that adaptive reuse is essentially a “fancy term for taking an old building, like an office or a hotel, and turning it into a building with a new use.”
Helton said rather than resorting to expensive and wasteful demolitions of entire office buildings, homebuilders can leverage existing infrastructure to create much-needed, cost-effective housing units.
He said beyond the economic benefits, adaptive reuse can reduce environmental waste generated by demolition projects and help communities preserve their unique architectural styles and character.
Some office-to-housing conversions are already underway. However, Helton said, certain zoning and building codes, such as provisions related to light, ventilation and minimum parking requirements, can pose challenges to the completion of such projects.
Helton urged the City Council to pass Bill 54, which would enable temporary modifications of the housing code for conversion projects, and to explore a comprehensive adaptive reuse ordinance, similar to one implemented in Los Angeles in 1999 that has since contributed to the development of 12,000 housing units.
Helton said adaptive reuse is not a “one-shot cure” for Honolulu’s housing crisis, but is one of “many things that the city and the county can do to make housing more affordable.”
TRANSCRIPT
10-12-23 Jonathan Helton with Johnny Miro on H. Hawaii Media radio network
Johnny Miro: Great to have you along on this Sunday morning for a public-access programming here on our five Oahu radio stations from H. Hawaii Media: 101.1 FM, 101.5 FM, 97.1 FM, 107.5 FM and 96.7 FM.
I’m Johnny Miro, joined by one of the great members of the Grassroot Institute of Hawaii. You can find their work at grassrootinstitute.org. That’s grassrootinstitute.org, and joining me to discuss the topic would be policy researcher Jonathan Helton this morning.
We have, well, many of Honolulu’s office buildings right now are sitting empty or many have vacant floors. At the same time, many people are in desperate need of a place to live. So, one reason for the increase of office vacancies has been the transition to remote work. More people working from home thanks to the technological developments related to the internet. And, of course, the trend was accelerated during the COVID-19 crisis.
So, what to do about all these vacant offices and even some retail spaces on Oahu? Let’s see what Jonathan Helton has to say with that. Good morning to you, Jonathan.
Jonathan Helton: Good morning. Thank you for having me on the show.
Miro: All right, how about we start by explaining why people are increasingly talking about so-called “adaptive reuse” or building conversions as a possible way to help alleviate Hawaii’s housing crisis, Jonathan?
Helton: There’s a couple of main reasons why people are focusing on this, and I know “adaptive reuse” is kind of like, it’s kind of the buzzword. But it’s just a fancy term for taking an old building, like an office or a hotel, and turning it into a building with a new use.
And in this case, in light of the housing crisis, one of the uses people are talking about is, obviously, residential units. So, let’s talk about why some people might want to do that.
So, right now in Honolulu, as you alluded to, there are very high office vacancy rates. So, at the beginning of this year, which is the most recent statistics available, about 14% of office space in downtown Honolulu was vacant.
So, because of that, the people who own these buildings are asking, “OK, what can we do to maximize our investment in these properties?” And, you know, there’s a lot of reasons why the vacancies are high; one of them is remote work. And, you know, that was accelerated during COVID, and hasn’t really come back to normal. So, a lot of employers have allowed their employees not to come back into the office.
But, you know, on top of that, Hawaii is not the most business-friendly state. So, there aren’t a lot of companies that are relocating their staff members here and filling up office space.
So, those are some economic reasons why this is being a discussion. But there’s a big political reason why quote-unquote, “adaptive reuse” or office conversions is coming into the picture — and that’s political.
There’s a desire in a lot of circles to, you know, quote-unquote, “keep the country, country” and not build a lot of homes, for example, out on the North Shore on agricultural land. Instead, focus on building homes closer to downtown where there’s already a lot of infrastructure available.
So, that’s kind of the context for why this discussion is happening now.
Miro: So, keep the urban core. and then build it up even more so, and keep the country, country. OK, I can see that.
Jonathan, why would someone want to change an office building to residential units? What are the pros of that?
Helton: So, if you are the owner of an office building or if you’re someone who’s looking to acquire one, one of the big pros is it can be less expensive than tearing down the building entirely. Tearing down an office building in downtown Honolulu would be very expensive.
But obviously, this depends on the type of building, because there are some buildings that might be old and have, like, structural issues where, you know, you just, you couldn’t do adaptive reuse there.
So those are some — so, cost is one of the main reasons people are looking at this. But there’s a reason why some lawmakers are looking at this that relate to more community reasons. And that’s, you know, because some old buildings are very pretty and were designed very well. And there’s a desire to keep those buildings in use. And so, if changing their use from office or retail to residential keeps those buildings up, there’s a desire to do that.
And then, going along this line, there’s some environmental benefits because if you have to tear down a structure, like a large office building, that obviously creates a lot of waste. And so, doing a conversion to residential units could minimize a lot of that waste.
So, again, right, there’s a kind of a business side of looking at this, and then there’s more of, like a community and cultural side. And in a lot of cases, adaptive reuse, conversion, they can achieve both the business and the cultural side.
Miro: That’s Jonathan Helton, policy researcher from Grassroot Institute of Hawaii. Grassrootinstitute.org for all the great work they do over there.
I know of some places that have done these conversions. There’s one in the works down the south end of Bishop Street; I hear maybe next year it gets underway. Can you give more examples or any examples of office conversions in Honolulu right now?
Helton: There’s a couple. So, No. 1, I think a lot of people may be familiar with the Queen Emma Building, which is also called the “pimple building.” That building was built in the ‘60s, and they successfully converted it from, like, offices to housing units — primarily affordable rentals — a couple of years ago.
And then there’s another project under work downtown. It’s the Hocking Building in Chinatown, and it was originally, like, commercial uses. And they’re trying to convert that into rentals for low-income folks.
So, they do have a couple of projects going on now. But I’m sure we’ll talk about some of the things we can do to make those projects easier to complete.
Miro: Mm-hmm. What are some of the engineering challenges in trying to convert office buildings to housing?
Helton: Right. And as we talked about, it does depend on the type of building. So, a couple of the things that someone might look at, you know — I’m not an engineer or an architect — but some of the things that I’ve read that people are looking at is they’re looking at the floor layout of the building.
A lot of commercial buildings may have a deeper floor plate. And so, because a lot of residential units, they need windows — you can’t build a residential unit, like, in the middle of the building and it doesn’t have any windows. So, they do look at the floor layout of the building.
They do look at plumbing, because, again, you’re usually gonna need more bathrooms available in a residence than your normal office building.
And then, when they’re doing the adaptive reuse of the building, some other challenges that they can run into, you know, if there’s structural damage that they didn’t know about, if there’s mold, [or] any sort of hazardous chemicals if the building was built a long time ago when some things were legal that are not legal now.
So, they would look at all of that, hopefully beforehand, and try to make a determination of whether or not building residential units instead of what was there previously is going to be cost-effective.
Miro: Hmm, I see. Well, this is Honolulu, and there’s a lot of challenges to getting something done. You’re talking about rules, regulations, red tape. What about those political challenges, Jonathan? Are there any laws and regulations that get in the way of changing buildings from offices to residential units?
Helton: Yes. I alluded to one earlier, which is windows. So, anytime someone wants to build a residence, the windows have to be openable. And in most downtown office buildings, the windows are not openable, and that’s building code. And building code — your offices, the retail spaces, they don’t have to have openable windows.
So, what some people have said is, “Hey, it’s really expensive to retrofit all of the windows in a building from non-openable to openable.”
So, there’s a bill, it’s a bill at the Honolulu City Council right now. I think it’s Bill 54. And what it would do is it would create a temporary exemption for these conversion projects. So, people don’t have to retrofit the whole building for openable windows. They just have to guarantee that the living units do have natural light coming in. And that’s, you know, that’s a cost thing.
Miro: OK, I’m looking at the Executive Centre. They obviously did something, because that is residential and I guess some office space in there. They got a workaround somehow, some way, cause those windows don’t open. Do you know anything about that?
Helton: Yes, they probably got a workaround. I don’t know the details of the specific project, but I can talk about how the Queen Emma Building got a workaround. And the way they got a workaround was through a program called 201H, which is a part of Hawaii’s state law that allows all sorts of zoning and building code exemptions for projects that provide affordable units. So, it’s almost like a trade-off.
Miro: OK.
Helton: If the homebuilder, the developer, builds units that are affordable — so, less than market rate — they can have certain exemptions. So, I suspect that that’s how that project was completed.
Miro: All right. Now, are there any efforts at City Hall to change the laws we just spoke about? Any efforts?
Helton: Yes. As I alluded to, there’s Bill 54 at the City Council that would facilitate office conversions. And that just passed first reading, so it has a long way to go. I’m sure the details will be hashed out in the coming months.
Miro: OK. How about on the mainland? There’s got to be this happening. Matter of fact, you read about it. Are there any cities that could serve as a model for Honolulu?
Helton: Oh, yeah. There are several. The No. 1 that comes to mind is actually Los Angeles. And they were working on building conversion 20 years ago. So, 1999, Los Angeles passes a law; they call it an “adaptive reuse ordinance.” And what this law essentially says is, if the building was built before a certain date — in this case, it was 1974 — it would qualify under this conversion program.
And so, what this conversion program did is it said, “All right, if you’re going to take an old building and turn it into residences, you get certain benefits.” And they include:
>> You get to be exempt from California’s environmental review law.
>> You don’t have to provide as many parking spaces as you otherwise would under zoning code.
>> They will let you build some additional units in that. So, they’ll give you what’s kind of called a “density bonus” and they will kind of exempt you from some of the zoning laws as well.
So, there were a lot of exemptions and streamlined processes that were given to anyone who took in this program to retrofit buildings. And all of that to say, this Los Angeles law worked really well.
So, it has been credited with the creation of 12,000 housing units, which does sound a lot. I mean, it is Los Angeles. So, in the context of Los Angeles, that’s not — that’s not an absolute, you know, that’s not a huge number of housing units. But it certainly made a difference.
Miro: Do you happen to know if that’s, like, in the downtown area near the airport? Or where exactly is that? Or you don’t know? Because I’m trying to …
Helton: Yes, Los Angeles targeted that law to its downtown area. Yeah.
Miro: OK. OK. And that’s pretty much what we can model things after as far as what they did. And they were utilizing that term “adaptive reusage” back in 1999? It sounds so 2020-ish. They were …
Helton: Oh, yes, apparently they were. And, you know, they may have been the leaders on that. But yeah, Honolulu would definitely benefit from this.
There’s a couple of things; you know, the Los Angeles model isn’t perfect. For example, one of the things that it could be improved with is you don’t limit it to buildings of a certain age.
So, Los Angeles, it was buildings built before 1974. Well, we don’t necessarily need that age requirement. If there’s an office building that’s sitting half-empty in Honolulu, you know, it doesn’t matter how old that is; it could be retrofitted to provide housing units.
Miro: I was surprised when you said Los Angeles, because San Francisco is definitely going to have to start doing this, and they’re much more compact and less amount of land space than both of our cities right here.
What policies would you recommend Honolulu adopt to build on this Los Angeles model, if you didn’t touch on that already?
Helton: Yes. Obviously, adopting the policies that Los Angeles did use for their successful law. The other thing would look at parking requirements.
Miro: Yeah.
Helton: Because if you build anything, in any of the islands in Hawaii, you are going to have to provide a minimum number of parking units. And if you’re building, if you’re dealing with an office building, putting residences there, it’s going to be a lot of dwelling units. So, normally you’d be required to build a lot of parking stalls.
Let me give you an example from the Queen Emma Building. So, when they converted it from an office to dwelling units, it would have required 74 parking stalls. With land costs downtown, that’s a lot. So, what they were able to do, the project was able to get an exemption and it was just going to, they only had to provide 15 parking lots — or excuse me — parking stalls.
So, things like that. If you lower the number of parking stalls that are required for these projects, that can really help with their financial feasibility.
Miro: And what about with the requirements for EV chargers now? Would that add any costs?
Helton: I would assume so, yes. Any sort of mandate like that, if it’s not offset in some way through some other cost reduction, would add cost to the project.
Miro: Have you folks at Grassroot Institute estimated the amount of units that would be, you know, be made available if they were to convert some buildings in the downtown area?
Like we’ve — they’ve already done one, I believe there’s one in the works, and you just mentioned another one. Do you folks have any idea, or is there any talk about the potential of how many units?
Helton: That’s a great question. I am working on a report that will deal with adaptive reuse and some other topics. So, the report’s not done yet, but hopefully, I can answer questions like that in the finished project and come back on the show and share it with you.
Miro: I got you on that one. All right, anything else you want to add before you enjoy the rest of your Sunday, Jonathan?
Helton: I think the main thing is that adaptive reuse is not going to fix everything. It’s not the one-shot cure for all of Honolulu’s housing problems. But, overall, it’s a tool. And I think it’s one of many things that the City and County can do to make housing more affordable.
Miro: Sounds like it, yeah.
Jonathan Helton, policy researcher, Grassroot Institute of Hawaii, grassrootinstitute.org. Thanks for informing everybody, giving them the information they need. They can always go there and get more on that. Have a great Sunday and we’ll talk to you soon.
Helton: All right, you too.