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Repurposing commercial properties could assist in county housing crunch


Repurposing underutilized commercial properties could alleviate Los Angeles County’s housing shortage by providing between 9 percent and 14 percent of the housing the county needs to build over the next eight years, according to a report released today by the Santa Monica-based RAND Corp.

The report, titled “Can Adaptive Reuse of Underutilized Commercial Real Estate Address the Housing Crisis in Los Angeles?” found that converting hotels and motels into housing through adaptive reuse is the most feasible way to utilize commercial properties, as developers could convert existing rooms directly into housing units.

“Repurposing commercial buildings to help address Los Angeles County’s housing shortage is a compelling idea, but the economics and logistics of such projects are complex,” Jason Ward, the study’s lead author and an economist at RAND, a nonprofit think tank, said in a statement.

“Significant incentives for the conversion of these properties to both market-rate and affordable housing may be needed to realize the full potential of adaptive reuse.”

The report credits a 1999 adaptive reuse ordinance in downtown Los Angeles for redeveloping vacant buildings that would have previously been too costly and time-consuming to redevelop into residences. Researchers said about one-third of the approximately 37,000 new housing units developed in the downtown area since 2000 were created through adaptive reuse.

According to the report, there are about 2,300 commercial properties that could potentially create between 72,000 and 113,000 units of housing in Los Angeles County. The figures account for between 9 percent and 14 percent of the housing that needs to be produced in the next eight years according to the statewide Regional Housing Needs Assessment Process.

While converting hotel and motel properties into housing was deemed as being the most feasible, the feasibility of adapting office properties into residential units would depend on the area and size. It found that larger apartments would be generally unfeasible financially, but denser studio apartments would be more promising.

The report also recommended regulatory reforms it said would spur adaptive reuse, including providing formal guidance about applicability of alternative building codes and locking in building codes and code guidance for the life of an adaptive reuse project at time of approval.