10-29-2025
I believe all Americans should have access to housing that is affordable and safe. I do not believe that housing has to be subsidized to be affordable. These were the principles that united Purdue University’s Dean V. White Real Estate Finance Program, The Pew Charitable Trusts, and the architectural firm Gensler to partner over the last couple of years to help solve our nation’s housing crisis.
Last week, Purdue and The Pew Charitable Trusts hosted a conference in Washington, D.C. The premise of “Reimagining America’s Empty Office Buildings” was to highlight recent research about the conversion of underutilized office buildings into affordable housing. While rents for space in the best buildings are at all-time highs in some markets, changes in workforce dynamics and technology have created a surplus of office space.
This reality, paired with an overall lack of affordable housing, has often created the unfortunate spectacle of the unhoused sleeping in front of vacant office buildings. According to the U.S. Department of Housing and Urban Development, there were 771,480 homeless Americans in 2024, the highest count in recorded history and an 18 percent increase over the prior year.
Earlier research has found that only 5–7 percent of office buildings are well-suited for conversion to traditional multifamily buildings, and often then only at considerable cost, pushing break-even rents significantly past the amount considered affordable by median-income renters. Large open and deep floor plates, in particular, were cited as the costliest to convert due to minimum access of light requirements of building and occupancy codes in most cities.
The “big idea” of the Purdue-Pew-Gensler partnership was whether or not these forlorn office buildings could alternatively be transformed into a different type of housing. Single-room occupancy (SRO) units made up over 10 percent of all housing in America’s largest cities in 1950 — with rents as low as $100 per month in 2025 dollars — but less than 1 percent of rental units in the latest 2020 U.S. Census. These units often consist of a private bedroom with shared amenities such as kitchens and bathrooms and have been rebranded over the last decade as “co-living” housing. Most importantly, large and deep floor plates are a desirable feature of co-living housing, as they provide sufficient space for shared amenities on the interior with housing units on the perimeter.
Over the last year, Gensler released a series of reports highlighting potential floor plans and development costs of converting actual office buildings to co-living housing in 10 cities across the United States. The daylong conference summarized those earlier reports and then previewed Purdue’s own report, to be released in November. That upcoming report explains how such developments can be financed using a combination of conventional and non-conventional approaches to create new units with rents as low as $683 per month with no or minimal subsidies while allowing private owners a leveraged return to equity of 6 percent.
The ability of cities to issue tax increment financing (TIF) and mezzanine loans using municipal bonds to fill gaps in the capital stack was discussed as an important tool in unlocking a new source of housing supply. The day concluded with attendees hearing from current co-living operators and potential capital providers, including Purdue University alumnus Bill Young, about how to overcome real and perceived barriers to effectively scale co-living conversions nationwide.
The idea of shared kitchens and bathrooms will not be appealing to most Americans, but co-living housing would fill an important, and increasingly disappearing, gap for those otherwise facing homelessness.
Mike Eriksen is a Professor of Economics at the Daniels School and Director of the Dean V. White Real Estate Finance Program. Prior to joining Purdue, he was the West Shell Associate Professor of Real Estate at the University of Cincinnati and Academic Director of the UC Real Estate Center and Program.
