Transforming vacant office space into housing in downtown Buffalo

BUFFALO, N.Y. — Concerns are mounting over vacant office space in downtown Buffalo buildings. And it turns out the housing shortage is also prompting a city council member to reach out to building owners in a letter to the Buffalo Place board.

Councilman Mitch Nowakowski said, “We need these residential residents to really fill what the office worker used to be.”

That’s what he’s observed about the changing trends for downtown Buffalo office buildings as companies scale back or shift their workspace needs as more employees want to work from home now, beyond the pandemic. Nowakowski’s letter says about 20,000 fewer people are commuting to downtown Buffalo for work than they were five years ago. And it notes that by 2022, more than a sixth of Buffalo’s office space was vacant.

As we’ve reported before, this trend is indeed a worrying situation for some local business leaders. For example, Buffalo Niagara Partnership President and CEO Dottie Gallagher told us in April 2023, “I think we’re going to see a lot of change and a reduction in the employer footprint in office environments.” She said this applies to Buffalo and cities across the country.

And perhaps a bigger concern communicated by the Rath building, as Erie County Executive Mark Poloncarz told us at the time: “If they’re not getting as much rent because they’re not leasing as much space, they could theoretically go into default and then you end up with very high-value properties that could theoretically be foreclosed on.”

Or he added that there could be a request to reduce assessments, which could mean less tax revenue for the city and county.

Now back to Nowakowski, who has been reaching out to property owners and developers to ask if they would consider converting unused office space into residential housing. He says, “The last thing I want is for developers and owners to not have a functional use for their structures and leave them vacant and abandoned or just take a tax loss. I think we really need to be proactive and open-minded about what developers need when it comes to conversion.”

The councilman, who chairs the finance committee, added: “My preliminary conversations have indicated: ‘Councilman – Listen – we are for this, but the conversion to be able to adaptively reuse these funds will create a big gap where potential projects simply cannot get off the ground.”

Nowakowski also noted, “I saw this in the state budget to allow Manhattan to start getting a head start on its office-to-residential conversions and as the second largest city in New York State — the people of Buffalo — and Buffalo are facing the same issues as downtown and we really need access to those resources.”

Gov. Hochul has been pushing for more affordable housing to be built in the state, and such conversions could be one way to do that. Nowakowski said that of the $600 million allocated in the recent state budget, a portion was set aside for incentives for developers to do conversions in such buildings.

New York State Senator Sean Ryan was not available for an interview but also said, “Meaningfully addressing Buffalo’s housing shortage will require a wide range of creative solutions. As more businesses shift to a remote work model, converting vacant downtown office buildings into apartment buildings is a smart idea that deserves state funding.”