Empty Offices, Full Cities – Germany's Squandered Potential
Imagine building a new city for 100,000 people — and then simply leaving it empty. That is exactly what is happening in Germany right now. More than 8.4 million square metres of office space stand vacant in the seven largest German cities (JLL, Q2 2025), while the Pestel Institute estimates that 1.4 million homes are missing nationwide. Two crises playing out on the same city map — and yet rarely connected to one another. We believe that is a mistake.
This vacancy is not a temporary phenomenon. In the second quarter of 2025, the office vacancy rate in the seven largest cities reached 7.7 percent — the highest level in over a decade. Frankfurt stands at 11.2 percent, Düsseldorf at 12.3 percent (JLL Office Market Report Q2 2025). The reason is structural: companies are moving into modern, ESG-compliant buildings, while outdated space is increasingly left behind. This is not oversupply — it is a mismatch between what exists and what is needed. Add to this the lasting shift in how we work: the share of employees working from home has held steady at around a quarter for years, and studies expect demand for office space to fall by roughly 12 percent by 2030 (ifo Institute / Colliers, 2023). This is not a dip — it is a structural shift that will not reverse itself.
On the other side of the city, the situation is worsening. Last year, only around 220,000 homes were completed — against an assumed annual need of nearly twice that number (Destatis 2024). Average re-letting rents in major independent cities rose by almost 70 percent between 2010 and 2022. The gap is widening — and it is widening precisely where office vacancy is highest: in inner-city locations.
Can an office building simply be turned into housing? As architects, we want to be honest here: sometimes yes, often no — and almost always more complicated than it sounds. Around 30 percent of vacant office stock is considered technically and legally convertible (ifo Institute / Colliers, 2023). That may sound modest, but given the current volume it is substantial: accounting for the floor area lost in conversion and an average dwelling size, this could yield around 60,000 homes for 102,000 people. The challenge lies in the floor plan: office buildings are deep, often 15 to 20 metres. Homes need daylight. Whatever sits in the middle gets none. Solutions exist — cut-in courtyards, narrow strips of housing along the façade, hybrid uses across multiple floors — but they require architectural thinking, not mere reclassification. Add to this the requirements for sound insulation, ventilation and escape routes, which differ between offices and housing. This is solvable. But it costs — time, planning, and a willingness to invest.
Beyond the housing potential, there is an argument too rarely heard in public discourse: embodied energy. Every demolished building loses all the CO₂ energy that went into constructing it — concrete, steel, glass, transport. A new building brings that burden right back, before a single kilowatt-hour of operating energy has even been used. Preserving the existing stock is climate protection. Conversion is a circular economy. These are not romantic notions — they are physics.
Against a backdrop of more than eight million square metres of vacancy, a funding sum of 360 million euros does not look particularly large — even policymakers acknowledge as much. The “Gewerbe zu Wohnen” (commercial-to-residential) programme is a start, but not yet a benchmark. What is missing are simplified approval procedures, flexible zoning instruments, and owners’ willingness to accept lower short-term returns in favour of long-term site stability. As architects, we can develop solutions — but we cannot replace incentives that the market alone does not provide.
Empty offices and missing homes are not separate problems. They are two sides of the same failure in urban development. The answer does not lie in the next new development on the edge of town — it lies in the buildings that are already there: in prime locations, with existing infrastructure, on land that is already sealed. This is no cure-all. But it is an urgently needed piece of the puzzle.
Sources: JLL Office Market Report Q2 2025 · Pestel Institute 2024 · ifo Institute / Colliers 2023 · Destatis 2024