Paris Plans to Convert a Fifth of La Défense Offices Into Homes

By Amara Osei

Paris La Défense, the public authority running the French capital's business district, wants to turn up to a fifth of its office buildings into housing. The plan mirrors conversion booms already underway in New York, Washington DC and London, and it rests on one blunt number: office vacancy in La Défense now runs at 14-15%.

"La Défense has a vacancy rate of 14-15% which is higher than it used to be," says Pierre-Yves Guice, CEO of Paris La Défense. He says the district must also stop being a place where the only thing people do is work.

"To retain companies in France and in Western Europe we need to diversify these office landscapes of the last century, because no-one wants to work in such an environment any longer," says Guice.

The first conversion is already taking shape. Groupama Immobilier, a French real estate company, intends to convert an entire nine-storey office building called Le Diamant into apartments. The building currently houses 1,800 workers in the west of Paris.

Deputy CEO Roland Cubin walks visitors through a corner of one floor that will become an upmarket flat. "Here you will be in the kitchen, and here is the bathroom," he says. It should be the first of many such conversions in the surrounding area.

Why is demand falling?

Demand for office space in Paris has dropped by almost a third over the past five to six years, according to Ludovic Delaisse, CEO of the French arm of Canadian real estate firm Colliers. He attributes the slide to the Covid-19 pandemic and the growth of homeworking.

Delaisse says office high-rises will still be needed, but cities must make sure leisure sits on their doorstep — restaurants, bars, cinemas and gyms.

"People like the idea of grouping together in a centre of expertise [for work] - in tech hubs, for example. The challenge for La Défense is to be a place where you want to be, that you want to see when you leave work in the evening," says Delaisse.

What are the technical obstacles?

Conversions run into hard physical limits. Cubin points to a windowless conference room at the centre of Le Diamant's floor plate — a symbol of the biggest challenge, the large amount of space in the middle of every floor that gets no natural light.

"There won't be any rooms there. Just access," says Cubin, referring to lifts and stairs. Other issues include the need for more plumbing and ceilings that can be too low.

US cities have sometimes solved the light problem by cutting atriums — light sinks — into the middle of buildings.

How big is the US conversion wave?

Tax cuts for property developers are fuelling the largest amount of office-to-apartment conversions in the US, concentrated in Washington DC and New York City. A report last year found:

• 8,310 converted flats in the pipeline in New York
• 6,533 in Washington
• 4,322 in Los Angeles
• 3,606 in Chicago

"We set a goal of introducing 15,000 new residents downtown by 2028 and we are now on track to doing that," says Nina Albert, Washington DC's deputy mayor for planning and development. She says that while "there may be one or two pretty significant building demolitions… the majority are office conversions."

Albert adds that about "hundreds of millions of dollars of private investment" has flooded into the sector.

Planning rules have also loosened. The DC Department of Buildings, part of the Council of the District of Columbia, has eased restrictions to make conversion schemes easier to approve in the US capital. New York City has done the same.

The UK offers a parallel case. Tax cuts and eased planning rules for office-to-apartment conversions have driven a continuing boom there. Property firm Knight Frank reported last year that the number of such projects in London stood 60% above pre-Covid levels.

Will France deregulate too?

Cubin wants French authorities to follow the American and British examples and cut both taxes and rules on conversions. The stakes, in his telling, are large.

"Just how the government deals with the tax question will decide whether France will be able to convert 2% of its vacant offices or 18 to 23%," he says.

He flags a regulatory quirk: when a building's function changes, French rules treat it not as an old building that's been altered but as a new build — triggering requirements on car parking spaces, wheelchair access, fire safety and more.

Whether Paris rewrites that rulebook will determine if La Défense's one-fifth target becomes a construction pipeline or stays a planning document.