Over the past two decades of my career as an architect in Melbourne, I have witnessed our Central Business District (CBD) transform from a quiet 9-to-5 center into a thriving mixed-use community. Two decades ago, hardly anyone lived in the CBD; today convenience stores and cafes line every corner, supporting a growing residential population¹. Yet all that progress now hangs in the balance. The COVID-19 pandemic dealt a heavy blow to the city’s vitality. Compared to 2018, Melbourne’s CBD now sees 100,000 fewer people each day^2 3. The once-bustling streets and ground-floor businesses struggle to survive without their usual patrons, a loss that we in the design and development community feel profoundly. At the same time, Melbourne faces an escalating housing emergency. There are over 60,000 applicants on the social housing waitlist, a number that “represents a total failure of both policy and business” to provide for our most vulnerable^4 5. These twin crises, an empty post-COVID city and a dire shortage of affordable housing, may seem like separate issues. In truth, they are deeply intertwined manifestations of a single systemic failure, and I believe one simple solution can address both.

The purpose of this paper is to lay out that solution in full. In the pages that follow, I will argue that Melbourne can simultaneously revitalize its CBD and deliver tens of thousands of affordable dwellings by adaptively reusing underutilized office buildings. Specifically, by converting around 1.5 million square meters of B- and C-grade office space, much of it now sitting half-empty, we could create approximately 31,000 new affordable homes in the heart of the city^7 8. This proposal is not a fanciful utopia; it is a practical and economically sound strategy grounded in real data and precedents. It is a strategy I first presented at the Fraser & Partners Adaptive Reuse Panel, and here I will expand upon it with all relevant data points, analysis, and illustrations for the benefit of government decision-makers and the property and investment community.

The tone of this discussion will be frank and unapologetic. The situation we face is bleak, a hollowed-out city center and a humanitarian housing crisis, born of policy failures and market inertia. I will not shy away from describing the severity of this failure. At the same time, I will underscore how straightforward and logical the remedy is. We are not powerless. The vacant floors of mid-century office towers can be turned into vibrant homes; the homeless or housing-stressed can be given a place to live without waiting for decades of new construction. The solution is right in front of us, in concrete and glass. We need only muster the political will, regulatory flexibility, and investment creativity to seize this opportunity.

These twin crises, an empty post-COVID city and a dire shortage of affordable housing, may seem like separate issues. In truth, they are deeply intertwined manifestations of a single systemic failure, and I believe one simple solution can address both.

This paper will first outline the context: how Melbourne’s post-COVID CBD has been drained of its lifeblood, and how our housing affordability has deteriorated to the point of moral failure. I will then demonstrate how these two problems connect and can be solved together through adaptive reuse. We will also consider the environmental dimension: the immense carbon savings unlocked by reusing structures instead of demolishing and building anew. Converting 1.5 million m² of existing buildings instead of replacing them would spare roughly 1,000,000 tons of CO₂ emissions, an impact equivalent to planting 1% of all the trees in Victoria¹². In a time of climate urgency, this is a benefit we cannot ignore. Further, I will provide global case studies from cities like New York, which are already converting millions of square feet of offices to housing, to illustrate just how far behind Melbourne is and how much we can learn from others’ successes. Finally, I will compare the financial returns of affordable residential assets versus languishing commercial offices, showing that converting to housing is not only socially right but financially smart. For example, where a typical office landlord might effectively net only ~60% of the lease’s face value after giving huge incentives to attract tenants, an affordable housing asset can capture 100%+ of its income with no such incentives needed^13 14. In short, the economics of this solution make sense for both public and private stakeholders.

In presenting this comprehensive case, my goal is to compel action. This is a call to our government leaders, our city planners, and our building owners: the time has come to turn policy failure into possibility. Melbourne’s identity has always been tied to the ingenuity and inclusiveness of its people. We cannot accept a future where the city’s core is empty and its citizens are unhoused. We have a chance to solve two problems with one elegant solution, to breathe life back into the CBD while providing homes that tens of thousands of Victorians desperately need. Let us examine that opportunity in detail, and let us move with urgency to realize it.

The Post-COVID CBD: A City Running on Empty

Melbourne’s CBD has long been the economic and cultural heart of Victoria, a place defined by the daily influx of workers, shoppers, students, and tourists. Prior to 2020, this district was pulsing with activity; the density of people on the streets translated into prosperity for restaurants, shops, arts venues, and the city’s famed laneway culture. However, the COVID-19 pandemic abruptly disrupted this urban equilibrium. Mandatory lockdowns and a massive shift toward remote work emptied out office buildings virtually overnight. Even now, well over three years since the pandemic began, the city has not regained its lost foot traffic. In fact, Melbourne is still missing about 100,000 daily workers and visitors in the CBD compared to pre-pandemic times². This net loss of 100,000 people every day is not a trivial fluctuation, it represents a profound change in the city’s dynamics. The absence is felt in the unnaturally quiet lobbies and half-darkened skyscrapers on a Tuesday lunchtime, in the struggling cafes that once had queues out the door, and in the diminished buzz of our once-renowned street life.

I have felt this change personally. My firm’s office was long headquartered in the heart of the CBD, and for years we relished the energy that surrounded us. But in the aftermath of COVID, that energy dissipated. By 2022, many days felt like weekends, with sidewalks half-empty and our favorite lunch spots closed for lack of trade. Ultimately, we made the difficult decision to relocate our office to South Yarra, a neighborhood where street life remained more robust¹⁵. It was a bittersweet move, sweet to find vitality elsewhere, but bitter in what it said about the slow hollowing-out of the center of Melbourne. The pain of this decline is shared by countless small business owners and workers in the CBD who have seen their customer base evaporate. The great strength of Melbourne, its people, has been partially withdrawn, and the city feels diminished as a result¹⁶.

Crucially, the drop in daily population is not spread evenly across all types of buildings. It is heavily concentrated in older office stock, the B- and C-grade office buildings that form a large portion of the CBD’s built environment. These mid-century towers and late-20th-century commercial blocks were already facing challenges before the pandemic: many lack the superlative amenities and tech infrastructure that newer A-grade offices offer, making them less attractive to tenants in a softening market. COVID exacerbated this trend dramatically. With flexible work now widespread, companies have downsized their footprints, often consolidating into prime towers and shedding secondary space. As a result, Melbourne’s B and C grade offices are now drastically underutilized, on average half empty or worse¹⁷.

Crucially, the drop in daily population is not spread evenly across all types of buildings. It is heavily concentrated in older office stock, the B and C-grade office buildings that form a large portion of the CBD’s built environment.

The numbers are startling. By early 2023, it was estimated that about 900,000 square meters of office space in Melbourne’s CBD were formally unleased (vacant) in B- and C-grade buildings, and an additional 600,000 square meters were occupied by tenants trying to sublease excess space they no longer need⁷. All told, roughly 1.5 million m² of office floorspace in the central city is effectively empty, a volume of space equivalent to more than 50 entire office towers of moderate size. To put it another way, an entire ghost city’s worth of offices now sits hidden in plain sight among Melbourne’s streets⁷. The City of Melbourne’s own data underscores this pattern: fully 16% of buildings in the CBD are underutilized, largely owing to dated amenities, poor accessibility, or redundant services in older stock¹⁸. And yet, paradoxically, these same underutilized structures are often only midway through their expected lifespans, especially in terms of their structural frames and envelopes¹⁹. Many were built in the 1970s and 1980s; at 40–50 years old, they could structurally endure for many decades more if given a new purpose²⁰.

Manhattan in New York, a city an order of magnitude larger, reportedly faces on the order of 10 million square meters of empty office space post-pandemic²¹. The impact there has been described in dramatic terms, even raising fears of an urban “doom loop” of declining property values and tax revenues. While Melbourne’s 1.5 million m² of idle office space is smaller in absolute terms, its impact on our mid-sized city is no less significant. Indeed, relative to our base, the per capita and per district impact is arguably even more acute. Whole sections of our financial district and civic spine are performing far below capacity. The lights are off on too many floors; the city’s gravitational pull has weakened.

This is not just a real estate statistic, it translates to a loss of urban vibrancy and economic momentum. Every underused office building represents workers not visiting cafes and shops, corporate tenancies not contributing to municipal rates as strongly, and an overall erosion of the city’s vitality. The urban economist Jane Jacobs long ago taught that dense diversity of use is the key to a lively city. Right now, Melbourne’s CBD is suffering from a loss of one crucial use (office workers), and nothing has yet filled the void. The challenge before us is how to breathe life back into these concrete canyons and ensure the CBD remains a dynamic engine for metropolitan Melbourne.

The Housing Emergency: A Moral and Policy Failure

Parallel to the story of the waning CBD is another alarming narrative, that of Melbourne’s worsening housing affordability and availability crisis. For years now, Victoria has struggled to provide enough housing, particularly for lower-income and vulnerable residents. Rents and property prices have climbed far faster than wages. Vacancy rates for affordable rentals are effectively near zero. Homelessness has risen visibly in the city. But perhaps the most damning metric of all is the social housing waitlist, which currently exceeds 60,000 people statewide⁴. This number lays bare the human cost of our housing shortfall: tens of thousands of individuals and families who have effectively been told that there is no place for them in the system, other than to queue and hope.

To me, and I suspect to many Melburnians, this is utterly unacceptable. I have described it before and will say it again: 60,000 people waiting for housing is evidence of a profound governmental and market failure, “a total failure of both policy and business to provide relevant…supply”^4 5. It is a failure of policy insofar as successive governments have not enabled or invested in sufficient social and affordable housing stock. And it is a failure of the private sector and our society at large in that we have not loudly demanded that housing be treated as the basic infrastructure of social stability that it is. We would never accept 60,000 households waiting years for access to water or electricity; yet with housing, we have normalized a permanent shortage. This shortage is measured in more than numbers, it is measured in the daily insecurity and hardship of real people: the single mother bouncing between temporary accommodations with her children, the retiree sleeping in a car because rents jumped, the young professional paying well over 50% of their income in rent for a substandard unit. Melbourne often prides itself on being one of the world’s most livable cities. That claim rings hollow when so many of our neighbors cannot secure something as fundamental as a home.

It is important to note that Melbourne’s housing affordability problems do not stem from extreme housing costs relative to some other global cities, by international standards, our median rents and prices are still moderate. But affordability is a function of both cost and income, and local incomes have not kept up with housing inflation. Moreover, Melbourne’s relative affordability advantage in Australia has been eroding; the situation is “bad and getting worse,” and on our current trajectory we could easily follow Sydney’s more unaffordable path^22 23. Demand for housing in the inner city and middle ring continues to grow, driven by population growth and urbanization, yet supply has not matched demand in the segments where it is needed most (namely affordable rentals and entry-level ownership opportunities). The private market predominantly builds housing for the higher end (investor rentals, luxury developments), which does little to alleviate the shortage at the lower end. Public housing construction has been minimal for decades, and while there have been recent pledges by government to build more, those projects will take years and still fall short of the 60,000 backlog. The consequences of this shortage are not abstract. Younger generations now view the prospect of owning a home as a nearly impossible dream, many of them see themselves destined to rent for life, and not by choice but by necessity^24 25.

Demand for housing in the inner city and middle ring continues to grow, driven by population growth and urbanization, yet supply has not matched demand in the segments where it is needed most (namely affordable rentals and entry-level ownership opportunities). The private market predominantly builds housing for the higher end ... which does little to alleviate the shortage at the lower end.

To illustrate the severity: to save for a deposit on a median-priced home today often requires the equivalent of five years’ salary or more²⁶, an astonishing burden that previous generations did not face. Even renting has become precarious, with double-digit percentage rent increases common in recent years. A large portion of the population is effectively resigned to permanent renting, and we as a society perversely tend to treat that as a personal failure rather than a systemic one²⁷. It should not be this way. There is nothing “failed” about being a long-term renter, what is failing is the system that leaves people no other choice and offers them so little security in that tenure.

In moral terms, housing is more than a commodity, it is a human right, recognized as such by international covenants to which Australia is a party. When tens of thousands are left without access to adequate housing, the social fabric frays. We see rising inequality, a loss of hope among the youth, and distress across communities. In economic terms, the housing crisis is also a productivity issue: workers who can’t afford to live in the city or who spend excessive income on housing have less capacity to participate in the economy and community. We all bear the costs indirectly, through higher demand for social services, poorer health outcomes, and the inefficiencies of long commutes for those pushed to distant fringe areas.

Therefore, addressing the housing crisis is not just a matter of social justice but of pragmatic governance and economic sense. The Victorian government has acknowledged this in words, but not yet in deeds commensurate with the scale of the problem. The current waitlist of 60,000 would likely require on the order of tens of billions of dollars in investment if one were to build new social housing units one-for-one to clear it, given typical construction costs. This is perhaps why the problem seems intractable, the number is large, and budgets are finite. But as I will argue, there is a way to tackle a huge portion of this need far more affordably, by leveraging existing built assets that are currently going to waste.

We do not necessarily need to spend $30 billion on all-new construction to house those 60,000 people; we can unlock the housing hidden in plain sight within our half-empty office towers. Before turning to that solution, let us recognize one more essential point: these twin crises (a decimated CBD and a lack of housing) create an opportunity for one to solve the other. The emptiness in our office stock and the scarcity in our housing stock are two sides of the same coin⁶. They are both symptoms of a city out of balance. And intriguingly, if we bring them together, the negative of one can cancel out the negative of the other to produce a positive. In the next section, I will articulate exactly how converting underutilized offices into affordable housing can achieve that.

One Problem, One Solution: Bridging Vacancy and Homelessness

The vacancy of offices and the lack of affordable housing might at first glance appear to be unrelated problems, one about commercial real estate, the other about social welfare. However, when we examine them closely, it becomes evident that they are deeply interconnected, and in fact can be addressed with a single strategy. I have posited before that the “emptiness of all the building stock we have in the city and the abrogation of responsibility in the provision of affordable housing are actually the same problem”6. This is not merely a rhetorical flourish; it reflects a concrete reality: we have space in abundance on one hand, and need in abundance on the other. The logical, elegant solution is to put the two together, to use the empty space to fill the housing need.

Consider the raw numbers again. Roughly 1.5 million square meters of B- and C-grade office space are effectively unused in Melbourne’s CBD⁷. What does 1.5 million m² represent in terms of potential housing? If converted to residential use, this could yield on the order of 30,000 to 31,000 dwellings, depending on apartment sizes and layouts⁸. For reference, if each unit averaged ~50 m² of net living area, a typical size for a one-bedroom or efficient two-bedroom apartment, plus allowance for circulation, services, etc., 1.5 million m² gross could translate to around 30k apartments. Even with some inefficiency or mix of larger units, the figure would still be in the tens of thousands of new homes. At an average occupancy of, say, 1.5 to 2 persons per dwelling (mixing singles, couples, small families or sharers), we are talking about housing for 40,000–50,000 people in the heart of the city²⁸. That is the scale of impact: on the order of 50,000 people could be brought to live in the CBD, effectively replacing the 100,000 daily users we lost, roughly “half” of that footfall on a permanent basis^29 30.

Now imagine the transformative effect of those 40–50 thousand residents on the city center. These are people who would patronize local shops every day, reactivate street life into the evenings and weekends, and give beleaguered businesses a new customer base. This permanent population boost would in turn attract more services and amenities to open or stay open, making the city more attractive for everyone, including, importantly, those very office workers whose absence we have lamented. In a virtuous cycle, by giving people a reason to be in the city (living there), you create conditions that entice others to return as well³¹. As I have argued, “that 100,000 people come back into the city pretty quickly when you give them a reason”³¹. Filling downtown with new residents could be that reason, it could help lure back remote workers or students, because the city becomes vibrant and convenient again.

Roughly 1.5 million square meters of B and C-grade office space are effectively unused in Melbourne’s CBD. What does 1.5 million sqm represent in terms of potential housing? If converted to residential use, this could yield on the order of 30,000 to 31,000 dwellings.

At the same time, consider what 30,000+ new affordable homes would mean for the housing crisis. It would be nothing short of a game-changer. Victoria’s entire social housing waiting list could be cut in half or more. Thousands of lower-income individuals and families would get stable, centrally located housing, changing their life trajectories. The pressures on suburban rentals would ease as people relocate to these new inner-city options, potentially stabilizing rents more broadly. And importantly, these homes would be in the inner city, close to jobs, transport, education, and services, which is exactly where affordable housing is often scarcest. This helps break the pattern of relegating lower-income households to the urban fringe where opportunities are fewer. It would make Melbourne a more inclusive city spatially, not just providing housing but providing access – access to the rich opportunities of the CBD, which should not be the exclusive domain of the well-off.

Thus, by solving one problem (empty offices) through their conversion into housing, we simultaneously address another (housing shortage) and induce spillover benefits for the city’s economy and social fabric. It is rare in public policy to find such a clear win-win scenario. Often, solving one problem exacerbates another or requires a difficult trade-off. Here, however, we have an alignment of interests: what is good for the city’s revitalization (filling unused buildings with activity) is also good for addressing equity and welfare (creating affordable homes), and is also good for environmental sustainability (reusing buildings rather than building afresh, as we will cover later). This is low-hanging fruit of the most massive kind, an opportunity to make a generational impact with relatively modest intervention.

To seize this opportunity, however, we must overcome inertia and several barriers. Owners of these underutilized office assets need the right incentives and regulatory pathways to convert them. Government agencies need to step up to facilitate, possibly through funding or partnering to ensure affordability outcomes. It will require coordination across sectors, something that historically has been a challenge. But the starting point is recognizing, unequivocally, that the emptiness in the skyline and the suffering on the streets are part of the same story and that story can be rewritten with a single narrative solution. In the remainder of this paper, I will delve into how exactly we can implement large-scale adaptive reuse in Melbourne’s CBD, covering design, regulatory, financial, and environmental considerations, to realize this vision of one solution for two crises.

The Scale of Underutilization and the Conversion Potential

Before discussing the mechanics of adaptive reuse, it is worth examining more closely the scale and characteristics of the underutilized office stock we propose to transform. Melbourne’s CBD office inventory includes a broad mix of building ages and grades. While premium (A-grade and above) towers have generally higher occupancy and have been somewhat insulated from the worst of the post-COVID vacancy spike, the secondary stock, the B and C grade offices typically built in the mid-20th century, has borne the brunt of the downturn. These buildings often have smaller or irregular floor plates, older service systems, and less natural light and amenities than newer buildings. Tenants, when scaling down, tend to relinquish space in these buildings first. It is precisely these buildings that form our 1.5 million m² pool of opportunity.

Importantly, many of these structures are sound and sturdy. The typical construction of the 1950s–1980s era office buildings in Melbourne is concrete or steel frame with concrete slabs, designed often to quite robust standards of the day. The facades vary in condition, some are curtain walls with single glazing that now perform poorly thermally; others are solid precast or masonry; some are already aging in appearance. But structurally, most of these buildings have decades of life left.

In fact, an analysis of typical building component lifespans shows that while mechanical systems might last only ~15–30 years and facades perhaps 40–50 years, the primary structure is usually good for 100+ years if maintained³². Many underutilized office buildings today are only ~50 years old or less, meaning their bones are only about halfway through that 100-year life³³. As I noted earlier, “some of these buildings are only 50 years old; they have another 50, 60 years of life in their structure and facades” if we choose to respect and reuse them²⁰.

This fact is crucial: it means demolishing these buildings and constructing new ones in their place is an enormous waste of embodied energy and materials. Why throw away a perfectly good structural frame and the huge carbon investment it represents, only to pour another batch of concrete for a new one? Adaptive reuse leverages this remaining life and saves us from such waste (more on the environmental angle later). Moreover, many of the mid-century office buildings possess architectural qualities that are now back in demand for residential living: generous ceiling heights, large windows (sometimes floor-to-ceiling), and solid materials. I and many of my peers actually have great affection for these buildings’ design attributes. “We love those buildings, the high ceilings, the strong structures, their uniqueness”³⁴. They have character and potential that modern glass-box towers often lack. In an ironic twist, what made them less competitive as offices (their older style) can make them desirable as apartments, which benefit from tall ceilings, big windows, and retro charm.

In fact, an analysis of typical building component lifespans shows that while mechanical systems might last only 15–30 years and facades perhaps 40–50 years, the primary structure is usually good for 100+ years if maintained. Many underutilized office buildings today are only 50 years old or less, meaning their bones are only about halfway through that 100-year life.

Another advantage is location. Nearly all these underused office buildings are in prime locations, smack in the city center or adjacent to key amenities. They stand on streets that are already connected to public transport, that already have shops and cafes (some currently struggling from reduced trade, but the infrastructure is there), and near institutions like libraries, universities, parks, and hospitals. In urban planning, we always talk about putting housing near jobs and transport to reduce commute burdens and car dependence. Well, one cannot get much nearer than actually inside the CBD, co-located with workplaces and transit hubs. By converting offices to homes in the CBD, we are automatically creating ultra-connected housing. Residents of these new CBD homes might commute by elevator or foot to nearby jobs, or easily hop on a tram or train. Many could even be car-free households, given the location, a further environmental and cost benefit.

Now, not every square meter of that 1.5 million will be equally suitable for conversion. Some buildings will have physical constraints that complicate residential reuse: for example, very deep floor plates (wide buildings) that make it hard to get daylight into residential units in the middle of the floor. Residential apartments typically require windows in most habitable rooms; an office floor plate 30m deep might yield some internal areas too dark for apartments without cutting in light-wells or atria (which can be done, but adds cost and complexity). Additionally, some B-grade offices may be in heritage buildings or have facade elements that need preservation, adding to complexity (though heritage buildings often make wonderful unique residences if converted carefully). In some cases, partial demolition or extension might be warranted, what one might call “up-cycling”, for example, retaining the structure but adding new floors or a new wing, or removing parts of the building that are unsalvageable. A spectrum of interventions exists: from “light touch” refurbishments that keep most of the building as-is and just adapt interior use, to full “adaptive reuse” transformations resetting the building’s typology, to “up-cycle” scenarios involving significant reconstruction³⁵. Each building must be assessed for the right approach.

Nonetheless, studies and case examples have shown that a large subset of these older offices are indeed good candidates for conversion. Often, buildings with floor plate depths of around 12–18 meters from window to corridor are ideal, as they can yield apartments on each side of a central corridor with adequate light. Many 1970s Melbourne offices fit this pattern. Even those with larger floor plates can sometimes be creatively reworked (for instance, by creating an internal courtyard or light-well as part of the conversion, or dedicating the core to shared amenities or studios that don’t require full natural light). In New York and other cities undergoing similar conversions, practical design guidelines have emerged for what kinds of office geometries convert well to housing, and Melbourne’s stock is broadly in line, since modernist offices were fairly universal in design principles globally.

In short, the conversion potential is real and significant. If we conservatively estimated that, say, two-thirds of that 1.5 million m² could be feasibly converted (with the rest perhaps either staying as commercial or being redeveloped new), that is still about 1 million m², or on the order of 20,000 dwellings. If we are ambitious and manage to utilize nearly all of it through clever design and selective partial reconstructions, we hit the 30,000+ dwellings mark. Given the urgency of the housing crisis, we should certainly strive for the higher end of that range. The next sections will explore what stands in our way (regulations and costs) and how to overcome those barriers to unlock this potential.

Barriers to Adaptive Reuse: Outdated Regulations and Excessive Costs

If adaptive reuse of offices is such a win-win, one might ask: why is it not happening already at scale? What is stopping building owners, developers, or the government from rushing to convert these empty floors into much-needed housing? The answer lies in a combination of regulatory hurdles, financial disincentives, and inertia. Chief among these are certain building regulations that make conversion extremely onerous, and layers of government taxes/charges that undermine project viability. It is estimated that roughly 50% of the cost of delivering a new housing unit in Victoria is tied up in government taxes and charges, and another ~25% of costs (half of the remainder) is attributable to regulatory compliance factors when converting buildings^9 10. In other words, nearly three-quarters of the cost is not the physical bricks-and-mortar of creating a home, but rather overheads imposed by policy. This is a startling figure that highlights how much opportunity there is to reduce costs through policy change.

Let’s break down the two major categories: (1) overregulation in building codes/planning, and (2) taxation and fees.

1. Overregulation and Inflexible Building Codes
‍When you take an older office building and attempt to convert it to residential under current Victorian codes, you quickly find yourself facing a gauntlet of requirements that effectively treat the building as if it were brand new. Change-of-use triggers mean the building must often be brought into compliance with contemporary codes for structural loads, seismic (earthquake) standards, fire safety, disability access, energy efficiency, natural light, ventilation, and various design standards (such as the Victorian Better Apartments Design Standards, known as BADS). These codes are well-intentioned, they are designed to ensure safety, sustainability, and quality in new construction. But applying them without nuance to existing structures can be counterproductive and cost-prohibitive.

For example, consider structural compliance. Many of Melbourne’s mid-century office towers were built before modern earthquake codes were introduced (Australia adopted significant seismic provisions after the 1989 Newcastle earthquake). Today, if you change the use of a building to residential, the code may require it to meet current seismic standards. In practice, that could mean extensive structural retrofitting, adding new bracing, reinforcing columns and foundations, even if the building has stood solid for 50 years and through multiple moderate tremors. As I have pointed out, “those buildings are doing just fine…they’re not falling over. Why can’t we use the structure that’s there?”^36 37. The code doesn’t easily allow it, it assumes all buildings must meet the latest criteria as if new. But from a rational standpoint, an existing building that has proven its stability should be granted some leeway. We could validate the structure against alternate standards (perhaps an international code’s retrofit provisions or a case-by-case engineering assessment) rather than blindly enforcing new-build standards^38 37. If we don’t, the cost of structural upgrades alone can sink a project’s feasibility.

Next, façade and energy regulations present another barrier. A big part of adaptive reuse cost is often the façade: replacing all the windows and cladding to meet modern thermal performance (insulation, glazing efficiency) and daylight requirements. Current energy codes and BADS standards might effectively mandate double-glazed, thermally broken windows of a certain size in living rooms, etc. If the existing windows are single-glazed, one might be forced to rip them all out. However, from a sustainability perspective, “why can’t a window which very effectively keeps the wind and the rain out be left in place?”³⁹ The answer, under current code, is because its energy performance might be below today’s benchmarks (for heat loss or solar gain). Yet if you calculate the carbon impact, manufacturing and installing all-new windows is hugely carbon-intensive, it “so dramatically outweighs the lifetime running cost savings” from a bit less efficient old windows that the code’s insistence on replacement is misguided⁴⁰. We are in an era where we must prioritize carbon reduction, which means sometimes an older window that’s “good enough” should be retained rather than replaced in the name of marginal energy efficiency gains. Similarly, BADS might require certain apartment layouts or sizes that are hard to achieve in an older building footprint without major reconfiguration. We may need to allow some flexibility on these design standards in adaptive reuse scenarios, not to compromise safety or habitability, but to acknowledge that an older building will by nature be different from a new one, and that’s acceptable⁴¹. As I argued, “an older building is not going to sell at the same price as a new building…it will always have its unique qualities which people can choose to either have or not have”⁴¹. In other words, buyers or tenants understand if a converted building has quirks, they trade that off for more affordable price or historic character or location. We should let the market make that choice, rather than pre-emptively ruling out conversions because they can’t meet every line of a modern code written for new builds.

Other regulations that impede conversions can include parking requirements (historically, planning schemes might require a certain number of car parking spaces per dwelling, many older office buildings have limited parking, and adding new parking is impractical; thankfully, there’s movement toward reducing such requirements in the CBD), balcony or open space requirements (again, which an existing tower might not fulfill unless retrofitted with balconies or shared terraces), and stringent planning processes for change of use (each conversion needing discretionary approvals that take time and add uncertainty).

2. Taxes and Government Charges
‍On the cost side, even if a developer navigates the above regulatory maze, they encounter a financial burden wherein around 50% of the cost of a new dwelling is attributable to government levies9. This includes things like the Goods and Services Tax (GST) on construction, stamp duties on property transactions, development contributions to local infrastructure, planning fees, and various authority charges. For a standard new apartment, these can indeed sum to nearly half the sale price in some analyses. In the context of affordable housing, this is particularly counterproductive, the government is essentially taxing its own goal of providing cheaper homes. One straightforward idea is: if we are serious about affordable housing, why not waive these taxes for projects that deliver it? As I noted in my panel talk, “I haven’t heard the government propose zero taxation on affordable housing supply, but that is certainly an alternative”⁴². If by removing taxes we can shave 10–20% off the cost, that directly translates to lower rents or lower required subsidies per unit.

In adaptive reuse specifically, there might also be issues of tax treatment that hinder action, for instance, tax incentives often favor new construction (depreciation benefits, etc.), whereas renovations can be less attractive under current tax law. This could be tweaked to level the playing field or even favor conversions.

Another large cost is the time and uncertainty associated with getting approvals. Time is money for developers; holding costs and financing costs accrue. If a conversion requires months or years of back-and-forth with planning authorities or building regulators due to unclear rules, that is a major disincentive. What we need is a clear, expedited pathway, a guideline or “handbook” for adaptive reuse that streamlines this process.

In summary, the combined effect of overregulation and heavy taxation is that a project to convert an office building into affordable housing can become nearly as expensive as building new, which defeats the purpose. Many potential projects simply wouldn’t stack up financially without addressing these issues. But the good news is that these barriers are largely self-created by policy, which means they can be removed or eased by policy. It is within the power of government (state and local) to carve out special provisions for adaptive reuse in the building code and planning scheme, and to offer tax relief or subsidies for such projects. This is precisely what I and others are advocating. In the next section, I will outline how a revised regulatory framework, essentially an Adaptive Reuse Code or Handbook, could unlock conversions, and how adjusting the cost structure (through tax incentives or grants) could make the economics work. We will also see what kind of public investment might be needed and how minor it is relative to the payoff (spoiler: on the order of a few billion dollars, which in government terms is very manageable, “for $4 billion, we could solve our total social housing problem in Victoria”⁴³, as I have boldly stated).

Regulatory Reform: Reinstating the Adaptive Reuse Handbook

To enable the large-scale transformation of underutilized offices into housing, regulatory reform is the linchpin. The City of Melbourne once pioneered approaches to encourage city living, notably the “Postcode 3000” program in the 1990s, which successfully facilitated the conversion of many vacant upper floors of CBD buildings into apartments, kickstarting the resurgence of residential life in the city. A key element of that effort was providing guidance and some leniency for adaptive reuse. Today, we need a renewed and expanded effort, effectively, a City of Melbourne Adaptive Reuse Handbook 2.0, that codifies a more flexible set of rules for office-to-residential conversions. I call on the City of Melbourne (and the Victorian state government, which controls building codes) to collaborate and deliver such a handbook urgently.

What would this Adaptive Reuse Handbook contain? It should set out clear, alternative compliance pathways for key areas like structural safety, fire safety, and energy performance specifically for conversions. For example:

Structural/Seismic
The handbook could allow an older building to meet an “adapted reuse structural standard” that ensures life safety without requiring full compliance with 2025 codes designed for new buildings. This might involve an engineering assessment demonstrating the building can withstand a certain level of seismic event or wind load as is, perhaps combined with some targeted strengthening where absolutely needed, but stopping short of reconstructing the entire skeleton. International precedent exists, many jurisdictions have separate rehabilitation codes or “existing building codes” that acknowledge you can’t always meet new building code in old structures, and that’s acceptable if basic safety is met. Adopting such an approach could eliminate the automatic requirement to, say, excavate and reinforce foundations or add massive bracing, which currently can kill reuse projects financially^36 37.

Facade and Energy
The handbook should permit retention of existing windows and facades if they are in serviceable condition, even if they don’t meet current energy efficiency standards, provided some compensating measures are in place (for instance, if needed, the installation of internal secondary glazing panels could be a cheaper way to improve performance without ripping the facade off; or trade-offs like improved HVAC efficiency to offset heat loss). Essentially, a performance-based approach rather than a prescriptive one: ensure the converted building as a whole meets a reasonable energy/carbon target (taking into account the huge carbon savings of reuse), instead of requiring each element to meet prescriptive new-build metrics. I firmly believe that “the cost in carbon terms of replacing those windows outweighs the running-cost benefit”, meaning keeping them is often the greener choice⁴⁰. The City’s guidelines should reflect this by easing NABERS (National Australian Built Environment Rating System) energy rating or daylight requirements for adaptive reuse projects, or providing exemptions/waivers where justified.

Fire & Egress
Safety is paramount, and some older offices will need upgrades here (sprinkler systems, alarms, maybe additional exit stairs in some cases). The handbook can identify typical solutions and, where needed, offer creative options (like allowing external staircase additions or using evacuation lifts) that might not be standard in new builds but can work in existing ones. Also, perhaps relaxations on things like corridor widths or lobby separations if they marginally miss code but have proven safe in decades of office use.

Apartment Design Standards
Here, the City can be proactive. The Better Apartments Design Standards (BADS) cover things like room depths, window sizes, storage, ceiling heights, etc., for new apartments. For conversions, the City could allow some variance. For instance, maybe some units won’t have balconies, instead, an adaptive reuse could provide communal rooftop open space as an alternative. Maybe some bedrooms might borrow light (a common necessity in conversions with deep floor plates), something not allowed in new builds, but perhaps tolerable if the unit is intended for affordable/student housing. The goal is to maintain liveability but accept that an adapted building might be different in layout from a brand-new one. As long as minimum light and ventilation for health are met, a bit of creativity should be fine.

Planning and Zoning Flexibility
The City should signal that it welcomes office-to-residential conversion applications and will fast-track them. Perhaps certain areas could be rezoned or given blanket permission for residential use (some older office zones may not technically allow residential without a permit; this should be fixed). The approvals process needs to be streamlined, maybe using a code-assessment route rather than discretionary if the project adheres to the adaptive reuse guideline.

Encouragingly, there are signs that Melbourne’s officials recognize this need. The City of Melbourne has indeed been discussing adaptive reuse guidelines recently⁴⁴. The Acting Lord Mayor, for example, put forward a proposal for new guidelines for the adaptive reuse of office buildings in the CBD⁴⁴. A formal document, “Guidelines for the Adaptive Reuse of Office Buildings”, has been drafted45 and aims to assist building owners in assessing conversion feasibility, with hints at streamlining approvals⁴⁶. What I urge is that these guidelines be ambitious and forgiving. They should really tackle the tough issues like structural code and energy code head-on by advocating for state-level changes or exemptions. Ideally, the State Government’s building authority would issue a parallel “Practice Note” or amendment that gives legal weight to those relaxations.

In essence, the Adaptive Reuse Handbook should provide the kind of regulatory leniency that is necessary to make conversions practical¹¹. This doesn’t mean compromising on safety, no one is suggesting that we allow unsafe buildings, but it means adjusting what “safety” means for an existing building versus a new one. It acknowledges diminishing returns: beyond a certain point, chasing the last 10% of code compliance in an old structure might cost an inordinate amount for minimal benefit. That balance must be struck intelligently.

In essence, the Adaptive Reuse Handbook should provide the kind of regulatory leniency that is necessary to make conversions practical. This doesn’t mean compromising on safety, no one is suggesting that we allow unsafe buildings, but it means adjusting what “safety” means for an existing building versus a new one.

The benefits of having such a guideline are immense. It will give confidence to building owners and developers by clarifying the rules. It will shorten approval times, because everyone will be on the same page about what’s expected. In economic terms, reducing regulatory burden directly reduces cost, the overregulation “tax” that makes up roughly 25% of project cost can be slashed¹⁰. This could make projects that were borderline now become financially viable.

I also recommend that the City of Melbourne (and possibly the Victorian Government through its housing agencies) consider setting up an “Office Conversion Taskforce” or one-stop shop, similar to what New York City did with its Office Conversion Accelerator^47 48. Such a body would actively work with owners of candidate buildings, helping them navigate the process, maybe even brokering partnerships with affordable housing providers or financiers. Its mission would be to get conversion projects off the ground quickly, troubleshooting issues on a case-by-case basis.

Finally, reinstating the Adaptive Reuse Handbook signals a strong policy commitment: it tells the world (and the market) that Melbourne is serious about tackling these twin crises innovatively. In policy, clear direction can itself spur activity, if owners know that in 2024 the rules will favor conversion, they will start planning for it rather than waiting. We cannot underestimate the importance of political will and narrative here. The government must send a message: We are removing obstacles; we want this to happen. With that message and the concrete regulatory tools to back it up, I have no doubt many stakeholders will rise to the occasion.

Financial Feasibility: Making the Economics Work

Regulatory reform, as discussed, will go a long way toward improving the economics of adaptive reuse projects by removing expensive requirements. However, even after such streamlining, conversions are not free. There will be capital costs to retrofit buildings, to replace aging services (plumbing, electrical, HVAC), to reconfigure interiors, to address fire safety, etc. The question then becomes: how do we ensure that converting offices to affordable housing (not just luxury apartments) is financially feasible for those undertaking it? The answer likely involves a mix of reducing upfront costs (through tax relief or subsidies) and recognizing the different income models of affordable housing versus offices.

Firstly, let’s recall the earlier breakdown: 50% of new housing cost is indirect taxes, and the remaining 50% includes roughly 25% structure and facade costs which could be saved by reuse^9 49. In an adaptive reuse scenario, if we can keep the existing structure and facade, we save that ~25% right off the bat. The major costs remaining are the fit-out and services (plumbing, wiring, lifts, bathrooms, etc.), which likely need renewal after decades, those accounted for the other ~25% of a new build cost and would still be spent in a conversion⁵⁰. But saving that structural shell is a huge gain: “50% of the supply cost of new housing is in structure and facade…elements that in adaptive reuse we can maintain”^51 52. So from a pure construction cost perspective, adaptive reuse can be significantly cheaper than building new, potentially on the order of, say, 30% savings, which can be the difference between an unviable and viable project.

Now consider the government’s role: if the government is serious about leveraging this solution for affordable housing, it should consider reducing or eliminating its own take (taxes/charges) on these projects. Forgoing GST on construction for certified affordable housing projects, waiving stamp duties for transfers of buildings that will be converted, and providing concessions on planning fees and infrastructure charges, all these can be done. Yes, it’s foregone revenue, but it’s in the service of a public good (and frankly, converting empty offices will likely raise the value of the property long-term and generate other taxes like land tax or increased municipal rates once occupied as residences, so the government can recoup some value later). As I said, “it makes no sense to have 50% of the cost of new housing in tax” when we are in a housing crisis^53 10. The government could, for example, declare that any project which dedicates, say, at least 30% of units to affordable housing (below market rent or for low-income eligibility) will get GST rebates and fast-tracked approval. If we want to be bold: how about zero GST and zero stamp duty for any office-to-affordable-housing conversion? That alone could cut 10-15% off the cost structure.

The Victorian Government might also directly invest or provide subsidies per unit. In my talk, I estimated that for around $4 billion of public investment, we could essentially solve Victoria’s social housing waitlist by funding thousands of conversions⁴³. Four billion dollars is not a trivial sum, but put in context, it is small relative to the value of the housing created. 30,000 dwellings, even at a modest $300,000 per unit development cost (which would be quite cheap per unit in today’s terms), is $9 billion total. $4 billion could cover almost half the cost, essentially bridging the gap to ensure affordability. And $4 billion is also a fraction of the state’s annual budget. It is an investment that would pay societal dividends for generations. Government funding could take forms such as low-interest loans, direct capital grants, or underwriting some of the risk for developers willing to take on these projects.

From the private sector side, one might ask: why would a building owner convert their office to (affordable) housing when presumably offices were more valuable in the past? The reality now is that many B- and C-grade offices have plummeted in value due to high vacancy and bleak future prospects. An underutilized office is a distressed asset. Its income is low or nil, and its market value has likely dropped sharply (there are reports of secondary office buildings being valued 30-40% below pre-pandemic levels in some cities). On the other hand, residential, especially rentals, is a sector with strong demand even in downturns. If building owners can be shown that converting yields a stable, if modest, return, they may be very interested, especially with some government support.

From a landlord’s perspective, a conversion can transform a problematic, concession-ridden office lease into a steady, no discount housing income stream. Even if the nominal rent is lower, the lack of downtime and incentives makes it financially attractive.

Here’s a compelling comparative example, drawn from our panel’s illustrations: Consider a notional 50 sqm space. As an office lease, one might achieve a “face rent” of \$600 per sqm per year (so \$30,000 a year for 50 sqm). Over a 5-year lease, that’s \$150,000 gross. But in today’s market, landlords often have to give large incentives to secure tenants, rent-free periods, fit-out contributions, etc. A 40% incentive (which is common now in Melbourne offices) would reduce that to effectively \$90,000 net over 5 years, only 60% of the headline return13. In contrast, if that same space is an affordable housing unit, one could rent it for perhaps the equivalent of \$600 per week (roughly aligned with a moderate rent for a one-bedroom in the inner city). Over 52 weeks that’s \$31,200 a year, or \$156,000 over 5 years. Crucially, no incentives are needed to find tenants, the demand is there constantly¹⁴. Occupancy for well-located affordable units would be essentially full, year-round. So the net return over 5 years is \$156,000, which is 104% of the initial value (slightly above because rents can even be indexed up modestly)^54 55. In short, the residential asset yields full value, whereas the office asset yields maybe 60%. This example shows that, from a landlord’s perspective, a conversion can transform a problematic, concession-ridden office lease into a steady, no-discount housing income stream. Even if the nominal rent is lower, the lack of downtime and incentives makes it financially attractive.

Additionally, there are new models of affordable housing investment emerging, such as build-to-rent (BTR) with affordable set-asides, community housing partnerships, etc. Investors like superannuation (pension) funds are increasingly looking at affordable/BTR residential as a stable, long-term asset class, especially as offices are seen as riskier in the new work-from-home era. Affordable housing often involves lower risk of vacancy (sometimes government or community housing providers will guarantee leases or occupancy) and can have government support. So there is a compelling financial case to pivot from commercial to residential in these older buildings.

Of course, each building will require a specific feasibility study. Some conversions might not make pure commercial sense without subsidy, e.g., if a building needs a lot of work. But that’s where government can come in to “buy” the social benefit. For example, the government could offer a deal: we will pay 20% of your conversion cost if you agree to make 30% of the units social housing for 20 years. Or the government could directly acquire some buildings outright at their depressed values and convert them itself via state housing developers, essentially turning private redundant offices into public housing assets.

It’s also instructive to look abroad. New York City has introduced a tax incentive (the “427-m” program) specifically for office-to-residential conversions that reserve 20-30% of units as affordable^56 57. Under that scheme, developers get a property tax break for decades, which significantly boosts the project’s net present value. NYC also loosened zoning constraints to make more buildings eligible for conversion. The result? A wave of projects in Manhattan that are converting millions of square feet into thousands of apartments^58 59. Developers and major funds are jumping in because with the incentives, the numbers work. Similarly, cities like San Francisco and Washington D.C. are offering grants or tax waivers to encourage conversions⁶⁰. Melbourne can do the same or better.

In sum, the financial feasibility is about aligning incentives: reduce unnecessary costs (through regulation and tax reform) and enhance revenue stability (through demand for housing and possible subsidies). When done, the adaptive reuse equation can be very attractive. We will not only solve a problem but create a new asset class of affordable urban housing that investors can feel good about and that provides steady returns. In the next section, let’s explore more how other global cities are embracing this and how Melbourne compares.

Global Case Studies: How Melbourne Stacks Up

Around the world, cities are waking up to the potential of adaptive reuse as a strategy to address both oversupply in commercial real estate and undersupply of housing. Melbourne is by no means alone in facing these post-pandemic structural shifts, but we risk being left behind if we do not act as decisively as others. Examining some global case studies provides both inspiration and a benchmark.

New York City, USA
Perhaps the most high-profile example is New York. Manhattan’s office market was hit hard by remote work, with office attendance dropping and vacancies doubling. By 2023, Manhattan had over 10 million square feet (about 1 million m²) of office space identified for conversion to residential, leading the nation in such efforts⁶¹. The state and city governments moved relatively swiftly: they convened a task force on office conversion, updated zoning laws to make more buildings eligible for residential use, and crucially, implemented a major tax incentive program (Section 467-m) to spur conversions^62 63. Under this program, owners who convert offices to rental residential and reserve a quarter of the units for affordable housing (targeted at middle-income levels) get a significant property tax break for 20+ years⁵⁶. This essentially offsets a chunk of the cost and makes the financial equation attractive.

The results are impressive: as of early 2025, New York had 44 conversion projects completed or in progress, totaling 15.2 million square feet and projected to yield about 17,400 apartments (the majority being studios or one-bedrooms suited to singles/couples)⁵⁸. This pipeline is said to absorb roughly one-third of the office vacancy surge that occurred since 2020 in the lower tiers of NYC’s market^58 59. One developer (SL Green Realty) estimated that 45 buildings they identified (18.7 million sq ft) could be converted under these incentives, producing nearly 19,600 residential units⁶⁴. These numbers are strikingly parallel to the scale we’ve talked about for Melbourne (30,000 units from ~16 million sq ft). In other words, New York is on track to achieve a conversion wave in the same ballpark of magnitude that we propose for Melbourne, except New York has gotten started already and mobilized capital and policy to do so. If Melbourne delays, we will lag far behind this global trend.

New York is on track to achieve a conversion wave in the same ballpark of magnitude that we propose for Melbourne, except New York has gotten started already and mobilized capital and policy to do so. If Melbourne delays, we will lag far behind this global trend.

It’s also worth noting that the typology of buildings being converted in NYC are often very similar to ours: 1960s–1980s office blocks that had become dated. The fact that New York’s pipeline is on track to exceed even its famous 1990s conversion program (the 421-g program that revitalized Lower Manhattan by turning old Financial District offices into apartments) shows the level of commitment⁶⁵. They are essentially tripling the pace of conversions compared to the 2010s⁶⁵. This is being heralded as a key to the city’s broader post-COVID recovery, preventing the feared “doom loop” by reducing excess office inventory and simultaneously easing housing shortages^66 67. The New York example tells us two things: (1) that large-scale conversion is feasible with the right policies, and (2) that government incentives are a critical ingredient in making it happen quickly.

Other U.S. Cities: Beyond NYC, many cities across the United States are embracing office-to-residential projects. A report by CBRE noted that in 2024 alone, 94 office buildings were converted to other uses in the U.S., totaling 13.1 million square feet, a big jump from the annual average of 58 projects in the years prior⁶⁸. The pipeline of planned conversions nationwide reached 81 million sq ft in 2025, about 1.9% of total U.S. office stock^69 70. This underscores that adaptive reuse is becoming a significant movement.

City-specific initiatives
San Francisco (facing ~28% office vacancy) launched a Commercial to Residential Adaptive Reuse Program with tax waivers and fee eliminations to spur conversions⁶⁰. Boston and other Massachusetts cities have state support, Massachusetts in 2023 set up a Commercial Conversion Initiative with grants to help projects in Boston and Worcester⁷¹. Washington, D.C. has offered tax abatements for conversions in parts of downtown. Even smaller cities like Kansas City and Cleveland have done numerous conversions of historic offices into apartments.

One point from the U.S. experience: not all buildings are suitable, and some will end up demolished if conversion is too hard (the U.S. saw a parallel rise in office demolitions). But critically, in the U.S. about 70% of the conversion projects in pipeline are going to residential (multifamily), outnumbering those to other uses⁷². This is driven by strong multifamily fundamentals vs. weak office fundamentals, as well as city incentives aiming to boost housing supply^72 73. It’s exactly the dynamic we see here, housing demand is strong, office demand is weak.

Europe and Other Regions
In Europe, adaptive reuse has also been common, though often driven by different factors (like historic preservation). For instance, London, UK had a significant number of office-to-resi conversions especially after 2013, when national policy changes allowed offices to convert to residential under “permitted development” (bypassing some planning hurdles). That led to tens of thousands of new flats, albeit with some criticisms about quality (due to lack of oversight on design). The lesson there is quality standards matter, but the speed of conversions was notable. Paris and other European cities have done targeted programs to turn vacant office blocks into social housing.

Closer to Home, Australia
It must be said that in Australia, we have been slower. Some conversions have happened in Sydney and Melbourne here and there, usually individual buildings by visionary developers. For example, the former Sydney office of the NSW Government at 66 Bridge St was converted into residential some years ago. In Melbourne, a number of older CBD buildings were converted to apartments during the 1990s and 2000s (as part of Postcode 3000). But in recent years, we haven’t seen a policy-driven wave like New York’s. Melbourne’s Postcode 3000 initiative in the 90s stands as proof that conversion can work: it delivered over 7500 new residents to the CBD by converting dozens of underused commercial buildings, revitalizing the city after-hours. That was a much smaller scale (the city was smaller then too), but it shows that with council leadership and incentives (back then, things like rate rebates, design advice, etc. were offered), owners did take up the opportunity. Today, our challenge is larger but so is our capacity and knowledge.

In comparing, it’s clear: Melbourne is not yet doing enough. While other global cities have launched task forces, changed laws, and dangled carrots (tax breaks, grants) to get conversions moving, Melbourne’s response has so far been relatively cautious and slow. We have an open data initiative noting underutilized buildings⁷⁴ and talk of guidelines, but we need to move from talk to action. If New York can green-light 15 million sq ft in a couple of years, we should set ourselves a similar bold target: for instance, convert 1 million m² (approx 10.7 million sq ft) of Melbourne offices to residential by 2030. That could be phase 1, roughly two-thirds of our identified potential.

The global cases also reassure us on feasibility: engineering and design firms around the world have solved the technical puzzles of conversion (be it adding shafts, cutting atriums, etc.). There is a growing body of knowledge and precedent. We can tap into that expertise. In fact, failing to leverage this global trend could mean missing out on expertise and maybe even funding. (Imagine if international funds that are investing in NYC conversions might also invest in Melbourne if we had a program, we could attract global capital by presenting a clear program.)

In conclusion, the international perspective highlights that Melbourne must act decisively or risk stagnation. Other cities have demonstrated that large-scale adaptive reuse is not only possible, but a key ingredient in their post-pandemic recovery and housing strategies. We should feel a sense of urgency and a bit of competitive spirit: we pride ourselves as a progressive, innovative city, now is the time to prove it by tackling our twin crises with the boldness that places like New York and San Francisco are showing. The opportunity costs of inaction are growing every day, as empty buildings age and housing woes mount. Conversely, by taking the lead in Australia on an adaptive reuse revolution, Melbourne could again set a national example, as it did with Postcode 3000.

Environmental and Lifecycle Benefits: Carbon, Energy, and Beyond

Beyond the social and economic arguments, there is a powerful environmental case for adaptive reuse that cannot be overstated. The building and construction sector is one of the largest contributors to carbon emissions globally, largely due to the energy-intensive processes of manufacturing building materials (like cement and steel) and construction activities. Every time we demolish a building and construct a new one, we incur a huge “carbon cost”, often termed embodied carbon. Conversely, reusing an existing building can save a vast amount of embodied carbon, as well as reduce construction waste. In an era where cities and nations have committed to climate targets and net-zero pathways, adaptive reuse stands out as a critical strategy for sustainable development.

Let’s quantify the benefit for our specific scenario: Converting 1.5 million m² of office space instead of building the same amount of new residential from scratch. Based on both research and our own case studies, doing so would avoid roughly 1,000,000 tons of CO₂ emissions (1 million tonnes)¹². This figure comes from considering all the concrete, steel, glazing, etc., that we do not have to produce and transport for new construction when we retain existing structures. To contextualize 1 million tons CO₂: it is about the annual emissions of 250,000 cars, or as I illustrated in the panel, roughly the amount of carbon that would be sequestered by 1% of all the trees in Victoria¹². Planting that many trees is practically infeasible in the near term, but saving that carbon by adaptive reuse is entirely within our grasp right now. In effect, occupying those structures and windows, instead of sending them to landfill, is like planting a million trees in terms of climate impact⁷⁵. That is a dramatic environmental win.

Additionally, consider landfill and resource conservation. Demolishing 1.5 million m² of buildings would generate an enormous quantity of rubble, metal scrap, glass, and toxic materials (old insulation, etc.). Our landfills are burdened enough; why add to that if not necessary? Adaptive reuse follows the highest order of the sustainability mantra: reuse (higher even than recycle). We keep the bulk of materials in service. The Fraser & Partners research team did a case study on a 1970s office building (the CML Assurance Society building) and found that by pursuing a reuse strategy, 85% of the structure was retained, preserving an estimated 6,400 tonnes of CO₂ that would have been emitted to recreate that structure⁷⁶. They also documented thousands of square meters of materials like glazing and aluminum that could be recycled instead of discarded⁷⁷. This underscores that each building reused avoids a massive output of waste and demand for new raw materials.

Another environmental angle is operational carbon and energy. A legitimate question is: won’t these older buildings be energy hogs if we don’t fully upgrade them? It’s true that many mid-century offices are not very energy-efficient compared to new green buildings. However, any conversion would still entail significant improvements, for example, adding insulation internally, upgrading HVAC to modern efficient systems, perhaps adding solar panels on roofs, etc. More importantly, the operational inefficiency can be gradually improved over time, whereas embodied carbon once spent is gone forever. Studies often find that the break-even time for demolish-new-build vs retrofit (in carbon terms) can be decades; i.e., it might take 20-30 years of more efficient operations in a new building to compensate for the emissions of its construction. With the climate crisis being urgent now, saving carbon upfront through reuse is often the more impactful choice on climate grounds than marginal energy savings that accrue far in the future. That said, any adaptive reuse we do should strive to also improve the building’s environmental performance reasonably, for example, adding better ventilation, maybe even incorporating elements like green roofs or external shading to reduce heat, etc., as part of the reinvestment. Our motto can be “Retain, Recycle, Reinvest,” as in: retain the structure, recycle key components, and reinvest in new elements to improve sustainability^76 78.

Converting 1.5 million m² of office space instead of building the same amount of new residential from scratch. Based on both research and our own case studies, doing so would avoid roughly 1,000,000 tonnes of CO₂ emissions ... roughly the amount of carbon that would be sequestered by 1% of all the trees in Victoria.

Consider also transportation emissions. Locating 30,000 homes in the CBD means tens of thousands of people who will not need long car commutes. If those same 30,000 homes were built on the suburban fringe, residents might be driving 50 km a day each, emitting CO₂ and congesting roads. Inner-city housing enables a lower-carbon lifestyle (walking, cycling, public transit usage increases). Thus from a city emissions perspective, converting offices to housing helps reduce transport emissions as well, by supporting a more compact city form.

A holistic view is the “lifecycle cost” of a building, economic, social, and environmental cost over its lifespan. Adaptive reuse optimizes the lifecycle by extending use and delaying the ultimate replacement date. Every building has a carbon “budget”; using it longer spreads out that cost over more years and more occupants. Melbourne aspires to be a sustainable city. In fact, the City has targets for zero net emissions and circular economy principles. Adaptive reuse of buildings is a textbook example of the circular economy in action: keeping assets in use at their highest value for as long as possible.

One more subtle benefit: By preserving existing structures, especially those of architectural note, we also conserve the cultural heritage and identity embedded in them. Many of these B- and C-grade offices may not be jewels in a traditional sense, but they are part of Melbourne’s mid-century architectural heritage. As I mentioned, buildings by venerable firms like Bates Smart McCutcheon, or the early modernist landmarks by Yuncken Freeman, etc., are now underused^79 80. By adaptively reusing them, we maintain a physical link to that era of Melbourne’s development, while giving those buildings a fresh chapter. This avoids the cultural loss that comes with wholesale demolition. It shows respect, “treating these buildings with dignity” as I like to say^81 82, including recognizing the energy and materials already invested in them as something worth honoring by not wasting it.

In summary, from an environmental standpoint, adaptive reuse is profoundly sensible. It aligns perfectly with climate action imperatives (massive immediate CO₂ savings), reduces waste, saves resources, and promotes a sustainable urban form. When we frame the decision this way, tearing down functional structures to build new, when we could convert them, appears not just economically but ecologically irrational. We must update our regulations to reflect this priority: the building code and planning decisions should explicitly value retrofit and reuse as a first option. Perhaps we should even require that any proposal to demolish a large building include an adaptive reuse assessment first. Some cities have started doing that, essentially saying: prove to us that you absolutely cannot reuse it, before we approve a demolition. Melbourne could adopt such a stance formally.

In the adaptive reuse panel, I emphasized that giving these buildings a “second life, a second carbon life” is crucial83. We have at hand an opportunity to achieve a significant climate mitigation outcome while solving social and economic problems, a triple benefit scenario. In the fight against climate change, we need to leverage every strategy we have, and here is one that dovetails beautifully with our other urban goals. We should embrace it wholeheartedly.

A New Urban Ecosystem: Reimagining Melbourne’s CBD

If we implement this adaptive reuse strategy at scale, what will Melbourne’s CBD look and feel like in, say, a decade? It is worth painting the picture of the outcome, because ultimately this is not just a technical exercise of filling square meters, it is about transforming the city’s ecosystem and culture. I envision a future Melbourne CBD that is far more mixed-use, lively 24/7, and socially inclusive than it has ever been.

Imagine walking through the city core in the year 2030 or 2035. The streets that were once quiet after 6pm are now peppered with lights and activity from residential windows above. Former office lobbies have been reinvented as residential entrances with bike storage, prams, and community notice boards. Maybe a few have cafes or small supermarkets integrated where a security desk might have been. The people on the sidewalks include not just office workers in suits, but also families with children, students walking to class, older couples strolling, a broad mix of residents who call the CBD home. This diversity of people naturally brings a diversity of services: you see more childcare centers, pharmacies, grocery stores, gyms and the like at street level (because with thousands of new residents, the demand supports them). Small businesses that once catered only to lunchtime crowds now have evening and weekend patrons, keeping them profitable and the street life continuous. In short, the city feels more like a neighborhood and less like a sterile office precinct.

One of the beautiful effects of having a mix of young and old living in the city is the social synergy it creates. As we’ve found in some of our residential projects, younger and older residents can form reciprocal relationships, the vibrancy of youth and the wisdom of elders complementing each other^84 85. A building that might have co-living units for young professionals on one floor and independent living apartments for active seniors on another could foster inter-generational friendship. I have personally expressed my enthusiasm for encouraging this mix: “younger people and older people together get on like a house on fire”, sharing experiences in a mutually beneficial way^86 87. In a future CBD with thousands of new dwellings, we can deliberately curate a residential ecosystem that includes students, single young workers, small families, retirees, downsizers, all enjoying the city’s amenities. This is not a far-fetched idea; many European city centers have exactly this kind of demographic mix.

New housing typologies will likely flourish. We might see co-living spaces, essentially dormitory-style or share-house-style apartments where private bedrooms are paired with communal kitchens and lounges, which are perfect for young renters just out of university who want affordability and flexibility^88 89. Indeed, Fraser & Partners has been working on co-living concepts that provide lower rent by sharing spaces, meeting the modern preference for community and flexibility among youth⁸⁸. A converted office building with a large floor plate might lend itself to such designs, with, say, eight studio bedrooms per cluster sharing a big living area. Meanwhile, for older residents, we could have independent living units that are designed to be age-friendly (grab rails, no-step showers, etc.), possibly with an on-site support service or medical clinic, not full aged care, but a housing model that allows healthy seniors to rent in the city without feeling isolated^90 91. We’ve been exploring this for the 50+ market, and it’s very exciting to think that a 70-year-old empty nester could move into a vibrant downtown apartment instead of being shunted to a far-off retirement village⁹¹. I often say I would love to have the CBD be the most attractive place to live for someone like me in my mid-50s and beyond⁹². Right now the options for that are limited, but we have the opportunity to create them.

The built form of the CBD would also evolve. We’d see more residential adaptations of facades, perhaps more balconies retrofitted (where structurally possible) adding green planting and outdoor spaces to previously all-glass curtain walls. Some buildings might have new rooftop extensions, maybe adding lightweight timber apartments on top of a sturdy concrete frame (timber is great for additions because it’s light and sustainable). Other buildings might have sections carved out to create courtyards, bringing air and light into new apartments. These physical changes will add texture and variety to the skyline. The CBD won’t just be a sea of uniform office windows, it will visually signal a mix of uses. One might see laundry drying on a balcony high up, or lights on in a zigzag pattern at dinner time corresponding to residential floors.

Safety and ambience on the streets will improve too. More eyes on the street at night (because people live there) typically correlates with lower crime and a greater sense of security. The city could become more pedestrian-friendly as the constituency of residents advocates for better public spaces, playgrounds, and green pockets. Indeed, a residential population will likely press City Hall for enhancements like pocket parks, dog parks, and so on in the CBD, which would benefit everyone. Melbourne could develop a true 24-hour city vibe, not just nightlife for revelers, but a gentle hum of normal life around the clock, like Manhattan or Tokyo where there are always locals out and about.

From an economic standpoint, injecting ~50,000 residents with presumably moderate incomes (since we’re aiming for affordable housing) into the CBD would support a whole new layer of commerce. Essential services like schools might even enter the picture, perhaps a new primary school campus could be established downtown once enough families are present. Medical clinics, dentists, all those community services would find viability. It really is a chance to redefine the CBD from a mono-functional core into a truly mixed-use, multi-dimensional district.

One of the beautiful effects of having a mix of young and old living in the city is the social synergy it creates. As we’ve found in some of our residential projects, younger and older residents can form reciprocal relationships, the vibrancy of youth and the wisdom of elders complementing each other.

This new ecosystem also strengthens resilience. A city center reliant solely on office workers is fragile, as we learned during COVID. But a city center with a strong residential base can weather disruptions better. During pandemic lockdowns, places with more residents maintained some life (people still needed groceries, local exercise, etc.) whereas pure office zones became dead. By balancing uses, we ensure that even if work patterns change, the city remains alive.

One could ask: will adding so many lower-income or affordable units in the CBD create any negative perceptions (such as fear of concentrating poverty)? I would argue absolutely not, if managed well. The housing we envisage is not public housing towers of old; it’s a mix of social, affordable, and market-rate units peppered throughout many buildings. It’s inclusionary, not segregated. And having people of all walks of life in the center is a positive, it counters the tendency of city centers to be enclaves of the rich. The vibrancy of a city often comes from its diversity, and Melbourne’s egalitarian spirit is best served by keeping the city accessible to all, not just those who can afford a penthouse. By design, these adaptive reuse projects can and should integrate a range of income levels (for instance, some units could be full market rent, some discounted to key workers, some deeply affordable to those on welfare, a blended model that many community housing providers use).

In my mind’s eye, I see a Melbourne CBD that perhaps no longer has as many big corporate headquarter offices as it did in 2019 (that ship may sail with remote work), but instead has become a magnet for urban living. Melbourne has always been called one of the most livable cities; this plan ensures the CBD itself lives up to that title by being livable in. It becomes a place people not only commute to, but a place to call home in significant numbers.

Such a transformation is not unprecedented, cities evolve. Think of lower Manhattan’s financial district: decades ago it was purely offices and by 7pm it was empty. Now, after conversion waves, it has grocery stores and schools and a growing population of residents, and it’s a more pleasant, humane place for it. Melbourne can do the same while retaining its unique character: our laneways could host not just bars but maybe children’s play areas by day, our trams ferry not just workers but kids to school. It’s an urbanist’s dream in many ways, a true live-work-play city.

Finally, envision the narrative change: Instead of talking about how COVID destroyed the city, people will talk about how Melbourne boldly reinvented itself post-COVID. It will be seen as a success story of adaptation, turning an office surplus into a housing asset. The city will feel more resilient, more modern in its approach to urban challenges, and frankly, more fun and creative. As someone who creates buildings for a living, I find this vision exciting: giving old structures new purpose and giving new life to the city and its residents at the same time.

Conclusion: A Call to Action for Government and Industry

Melbourne stands at a crossroads. Down one path is a slow decline: a CBD that remains partially empty and stagnant, and a housing crisis that continues to worsen as we struggle to build enough homes. Down the other path is a bold transformation: a reinvigorated city center brimming with new residents from all walks of life, and a substantial dent made in the affordable housing shortage. The fork in the road is defined by choices we make right now, choices by government leaders, by property owners, and by investors. After examining the data, the costs, the benefits, and the global examples, I am convinced that the right choice, indeed, the only morally and logically sound choice, is to embrace adaptive reuse of underutilized offices as a flagship solution for Melbourne’s challenges.

To the Government and Policy Makers: I urge you to act swiftly and decisively. Reinstate and expand the Adaptive Reuse Handbook for the City of Melbourne and beyond; make it a matter of priority to remove the regulatory roadblocks and excessive costs that currently inhibit conversions^11 93. This means working across portfolios, planning, building, treasury, housing, to deliver a coordinated package: flexible codes, expedited permits, and tax incentives. You have heard the numbers, 50% of new housing cost is taxes⁹, 25% is over-regulation10. These are levers within your control. Pull them. Declare a “Melbourne CBD Revitalization & Housing Initiative” with a clear target (e.g., 30,000 new affordable dwellings by 2030 through conversions) and marshal the resources to achieve it. The cost of incentives or subsidies required, a few billion at most, is trivial next to the cost of inaction. Think of the $4 billion figure: for roughly that sum, you could eliminate the social housing waitlist in our state⁴³. The return on investment, in social terms, economic uplift, and carbon savings, is enormous and multi-faceted. Few expenditures can claim to simultaneously solve housing, stimulate the economy, and advance climate goals. This one can.

Beyond policy settings, government can also lead by example: identify underused government-owned buildings in the city and convert them to affordable housing as a pilot. Partner with community housing providers, or offer crown leases to developers conditional on affordable outcomes. Show that it can be done, and others will follow. And critically, engage the public with this vision, help them see that a more populated, mixed CBD is a safer, more prosperous, and more inclusive place for all Victorians. There may be skeptics; your job is to make it clear that this is a positive evolution, not a sign of decline. The narrative should be: Melbourne is innovating its way out of the COVID slump and housing crisis by doing something audacious and forward-looking.

To the Property and Investment Community: I say this, do not cling to the past. The market fundamentals for secondary offices have shifted, perhaps permanently. Rather than hoping for a full reversion to pre-2020 norms, recognize the opportunity in front of you. An underperforming office tower can become a thriving residential asset. Run the numbers with an open mind. As we showed, the landlord math favors residential occupancy in many cases now^13 14. There is pent-up demand for rental housing, especially in locations near jobs and transport. The government (if it heeds the call) will be increasingly on your side, with smoother approvals and possibly financial sweeteners, to make these projects pencil out. For institutional investors: consider allocating capital to conversion projects, even if it’s a new territory. Doing so not only offers potentially stable returns but also burnishes your ESG (environmental, social, governance) credentials, as these projects clearly contribute to sustainability and social good. For developers: this is a chance to distinguish yourselves by developing expertise in adaptive reuse. Those who master the art and science of conversions will find a niche with less competition than greenfield development. It’s a domain that rewards creativity, engineering ingenuity, and collaboration with authorities, all strengths that Melbourne’s development community has in abundance.

To Building Owners who may sentimentally hesitate, perhaps the building has been in your portfolio for decades as an office, I empathize, but I urge pragmatism and vision. The city is changing. By opting to convert your property, you can become part of Melbourne’s renewal. You would be providing homes for people, contributing to the community, and likely securing a more stable future income for yourself. If you are worried about the complexity, know that there will be a support framework emerging (task forces, design guides, etc.). You won’t be going it alone. In fact, many will want to partner, from architects excited by the challenge to government agencies looking to place tenants.

To Community and Civic Leaders: support this initiative vocally. Community groups often push back on development, but this is a kind of development that is largely within existing envelopes, it’s recycling the city we have. It should attract broad support because it doesn’t chew up new land or displace existing residents (we’re taking vacant space and giving it new life). It helps with affordability, which most citizens agree is needed. Of course, as these conversions happen, ensure that the new residents are welcomed and integrated, plan for the amenities and public spaces that a growing resident population needs. The City of Melbourne should anticipate this and invest accordingly, perhaps using some of the increased rate base that will come from revalued, occupied buildings.

In closing, the adaptive reuse of Melbourne’s underutilized offices is an idea whose time has come. It is simple in concept yet profound in impact, a solution hiding in plain sight. We cannot afford paralysis or half-measures.

Finally, to the People of Melbourne: I ask for your open-mindedness and your backing. Our city has a proud history of bold urban initiatives, from the regeneration of Southbank to the laneway revival and beyond. Adaptive reuse on this scale is the next chapter. It may mean your CBD looks a bit different, a little more residential character, a bit less corporate sterility, which I believe is for the better. It certainly will mean a more just city, where nurses, teachers, baristas, artists, the people who make the city culturally rich and keep it running, can actually afford to live in it, not on the margins. It means a greener city when we count the carbon saved. It means a safer city with eyes on the street. These are things that benefit everyone, whether you live in the CBD or just visit occasionally.

In closing, the adaptive reuse of Melbourne’s underutilized offices is an idea whose time has come. It is simple in concept yet profound in impact, a solution hiding in plain sight. We cannot afford paralysis or half-measures. The housing crisis is grinding on, the city’s recovery is sputtering, and every month of delay is opportunity lost. As an architect and urban citizen, I am passionate about this proposal because I see in it the Melbourne I want to live in: a city that cares for its people, that does not tolerate waste amid want, and that fearlessly adapts to turn adversity into advantage.

Let this paper be not just an analysis but a call to action. I call on the Victorian Government to establish the policy settings and funding to kick-start conversions at scale. I call on the City of Melbourne to champion regulatory innovation and cut red tape for reuse projects. I call on building owners and developers to step up with projects and not wait on the sidelines. And I call on every stakeholder, from bankers to builders to designers to community advocates, to collaborate in making this vision reality. We have 31,000 homes waiting to be unlocked in those silent, half-lit towers. We have tens of thousands of our fellow citizens waiting desperately for housing. We have a city waiting to be re-energized with new life.

Let’s not wait any longer. The time to act is now, to turn underutilized space into affordable homes, to turn a bleak crisis into a brilliant revival. Melbourne’s future is ours to build, in the very buildings that yesterday’s planners left for us. With wisdom, courage, and cooperation, we can adapt our city for the better and ensure that Melbourne’s best days are yet to come.