This morning I looked at the business section of my local newspaper and read about the coming wave of foreclosures in commercial real estate.  As with houses, office towers were vastly overbuilt and overpriced in the era of cheap credit.  In short, the banks, pension funds, and hedge funds who financed commercial real estate are now bracing for another wave of bitter losses.

As in most cities, my hometown of Seattle is facing the prospect of double digit office vacancy.  Walk through the downtown area and you’ll see an army of cranes working to finish office towers destined to sit half empty as owners compete for a dwindling pool of clients.  Looking down from the cranes to street level you’ll see a growing tribe of people huddling in entranceways and side alleys lining your route.  And you start thinking why can’t the people who need shelter occupy empty office towers desperate for new tenants?

Well, it’s economics, pure and simple.  This dual need is nothing more than parallel market failures, where credit-fueled overbuilding exists alongside an absence of a “market” for emergency housing.  And this situation presents the opportunity of a lifetime.

There’s a reason most homeless shelters are found in downtown areas – try putting one in a suburb or a close-in neighborhood and the local homeowners go nuts.  They’ll show up at the planning meeting and harp about “problems” like drugs or the safety of their kids (despite the fact that there are far more shootings at schools and rogue teachers are much more likely to assault a minor than the homeless are).  The reality is that it comes down to fears about property values.  No one will admit to such crass inconsideration (ie  “We give to Easter Seals each year”) but the truth is that shelters only work in neutral areas where the affluent have nothing to lose financially.

So, empty offices downtown are a blessing.  In exchange for shelter the government could hire the homeless (or others needing work) to convert distressed office space into living space.  Nothing fancy, maybe two bedroom units with a small living room built along the windows and a common area in the middle of the room for job searching, recreation, and mingling.  The bathrooms on each floor could be converted to include showers and changing stations.  Maybe turn the penthouse floor into a cafeteria with simple meals but breathtaking scenery.  The top half of an office tower could be thus converted, with the bottom half remaining office space; one half social good and one half business good. 

Once remodeling is complete the tower-owner would begin receiving income from a mix of private resident payments, government subsidies, and business rents.  The results would meet many of our most pressing needs: the landlord staves off bankruptcy, the bank is spared yet another bad loan, and people get shelter.  Equally important, the vast overcapacity in office space that is depressing office rents is reduced, helping new construction to eventually recover.  And no one has to listen to soccer moms harping about drugs in the neighborhood.

It’s easy to think that this would never work.  Tower owners might chafe at first in Trumpish arrogance, unable to handle the idea of their exclusive Metropolitan Tower II being filled by the unwashed, but illusions die quickly with foreclosure looming.  When the banks start calling they’ll grovel to the table like a Lehman executive in the middle of a short-selling frenzy.  The mental environment is changing quickly, allowing us to now rethink what an office tower actually is.

I imagine a day when an office worker hops on the elevator, joining an unemployed man coming down from floor 13.  When the worker complains about the hours he’s putting in, the homeless guy puts his hands by his ears and imitates a tiny violin.  The pair exits the elevator laughing and heads for the ground floor Starbucks, sharing the start of another day.