On Monday, The Wall Street Journal reported that building officials in New York City had issued a stop-work order on a second office building that was being converted into residential accommodation. It was served last Thursday and applies to 222 Broadway in lower Manhattan.
"The work shutdown came after city inspectors said the contractor failed to notify the city about two concrete beams on the top floor that had developed cracks, according to a spokesman for the developer GFP Real Estate," said The Journal.
The order was the second in a month for such projects. It followed the Jul. 7 buckling of steel columns holding up 11 additional stories being added to the former Pfizer headquarters building at 235 E. 42nd St. in Midtown Manhattan, an incident that attracted national and international media coverage.
The news of a second stop-work order came on the same day the street below the Pfizer building was reopened as the site was deemed safe for passing traffic, according to CoStar.
Might These NYC Issues Affect Other Office-to-Residential Conversions?
Office-to-residential conversions are known in the development business as "adaptive reuse" projects. And many see them as an important tool in the drive to deliver more new homes, of which the U.S. is short 4 million to 5 million residential units, according to Congress.gov.
Nightingale Associates put the nationwide office vacancy rate at 20.2% in the first quarter of 2026. But not all office towers are suitable for adaptive reuse.
"Office-to-residential conversions are expected to accelerate in 2026, driven by high office vacancy rates and a severe housing shortage," reported Urban Land magazine last month.
"Major cities like New York, Washington D.C., and Los Angeles are leading this trend, with significant government incentives and a growing pipeline of conversion projects," continued the magazine. "At the start of 2026, an estimated 90,300 apartment units were underway from office conversions, up 28% from a year earlier."
Not All Office Buildings Are Suitable
So, will construction issues in New York City affect the wider use of adaptive reuse? We hope they won't have a major impact. However, it would be a good thing if they concentrated developers' minds to assess, before purchase, the suitability of buildings for conversion.
"Adaptive reuse is a powerful way to create housing, but developers cannot assume an eligible building is structurally ready for conversion," said Kyle Tourjé, executive vice president of Alpha Structural, a Southern California structural engineering and construction firm, quoted by Yahoo! Finance.
"Offices, retail buildings, and parking structures were designed and originally constructed for different uses, loads, and seismic demands," says Tourjé. "Some may adapt with limited intervention. Others require substantial work. Knowing the difference can determine whether a project is viable or not."
The Los Angeles Case Study
The topic is especially pertinent in Los Angeles, which had an office vacancy rate of 25.6% in mid-2026, and where the city government loosened rules for these conversions in February.
"The Citywide Adaptive Reuse Ordinance (ARO) took effect Feb. 1, extending streamlined conversion rules to commercial buildings at least 15 years old and qualifying parking structures at least five years old," reported Yahoo! Finance. "Mayor Karen Bass has said the expansion could spur more than 43,000 housing units."
Certainly, the city's planners are enthusiastic. "The ARO amends the Zoning Code to establish zoning incentives and streamline procedures to help transform underutilized commercial buildings that are at least 15 years old into new housing," said a February news release from Los Angeles City Planning.
"With shifting demands for office and retail space, ARO is a unique opportunity to create more housing, reactivate vacant space and revitalize commercial corridors," said Director of City Planning Vince Bertoni in the news release. "Sometimes the greenest building is the one already built. The ARO will help reimagine existing spaces to create new housing opportunities for Angelenos and do so in a sustainable manner."
Of course, developers in Los Angeles face particular problems. The possibility of significant earthquakes requires high levels of seismic engineering to keep residents safe.
However, other cities face other issues. Miami, for example, is regularly hit by hurricanes, while planners in other places may worry more about flooding.
So, it's good that cities are maintaining high standards for adaptive reuse project codes. These conversions may take only bite-sized chunks out of the enormous housing crisis. But they mean the world to those who can finally find an affordable home to rent or buy.
