AMNA NAWAZ: In American cities, two problems loom large, a housing shortage and an office glut, with millions of square feet of office space sitting vacant since the onset of the pandemic.

Office-to-housing conversions are becoming an increasingly popular two-in-one solution for city leaders.

But will they result in housing that's affordable for all Americans?

Paul Solman heads to New York City to investigate.

SHAMS DABARON, Housing Advocate: This is one of the places in New York City where the vacancy rate is so high, the tenants, the people who have been renting these offices, are gone.

PAUL SOLMAN: In Midtown Manhattan, Shams DaBaron, long known as Da Homeless Hero, advocating for those who, like him, lived in New York's shelters.

SHAMS DABARON: Everyone deserves a home.

Housing justice is racial justice.

(CHEERING AND APPLAUSE) SHAMS DABARON: The owners of these buildings still have to pay property taxes, still have to pay insurance, all of those things with no income.

PAUL SOLMAN: So, eventually, they give it back to the lender.

SHAMS DABARON: Or they just foreclose.

It becomes an empty building.

How does that make sense in an environment where we have so much of a need for affordable housing?

PAUL SOLMAN: A migrant crisis has now swelled New York's already substantial homeless population, driving more than 100,000 to the city's shelters.

SHAMS DABARON: They're horrible places.

So to be warehoused there for years on end, it doesn't make sense.

PAUL SOLMAN: DaBaron himself left them for the streets.

But what's the alternative?

The average rental rate in Manhattan is $3,236 a month for just a studio apartment.

Therefore, says DaBaron: SHAMS DABARON: Let's take these buildings that are now empty, and let's convert those and produce affordable housing there.

PAUL SOLMAN: But, hey, conversions are already happening, says architect Steven Paynter.

STEVEN PAYNTER, Gensler: What we're seeing right now is a lot of developers and owners making that decision to go residential, because there's a lack of confidence in the office market.

And -- but there's also real confidence, and there's a real housing need, especially in places like Manhattan.

PAUL SOLMAN: At 160 Water Street, not far from Wall Street, Paynter's firm is converting a 1972 office building 24 stories high into nearly 600 apartments.

What do you have to do as a designer to make this into housing?

STEVEN PAYNTER: The first thing we actually do is analyze the buildings.

Do they have the right bones, do they have the right structure, the right depth from the elevators to the windows to make perfect units?

PAUL SOLMAN: 160 Water fit the bill.

But the core of the building, 60 feet from the windows, was dark, uninhabitable and useless for apartments.

STEVEN PAYNTER: We have demolished it out and closed it, put some mechanical shafts in there.

And we're actually able to redeploy that space, that density that we had in there to the roof to create some great rooftop amenity that has views across the city.

Yes, so this is actually the amenity floor.

So we have got about 30,000 square feet of amenity up here.

PAUL SOLMAN: For private dining rooms, a terrace, a barbecue.

Now, it turns out conversions, though not quite so amenitized, are old hat in New York.

Obsolete manufacturing spaces and offices became loft apartments in the 1970s.

A push for residential conversion in the '90s turned Lower Manhattan from 9:00-to-5:00 offices into a 24/7 community.

And 9/11 accelerated the trend.

DANIEL GARODNICK, Director, New York City Department of City Planning: Some of these changes felt unfathomable at the time.

And now they're just part of the experience of being in New York City.

PAUL SOLMAN: To Dan Garodnick, New York's director of city planning, much of the city's estimated 79 million square feet of vacant office space -- picture more than 29 Empire State Buildings -- is ripe for conversion.

DANIEL GARODNICK: We have seen our population go up.

And we have not kept pace.

In the last decade, we created 800,000 jobs and only 200,000 new homes.

We have a housing crisis.

We need to find ways to create housing.

PAUL SOLMAN: Well, so what's stopping you?

DANIEL GARODNICK: There's nothing stopping us, other than our own process for changing the rules.

PAUL SOLMAN: Rules dominated by old zoning restrictions, which make conversion of pre-1961 buildings impossible.

In Lower Manhattan, the cutoff was raised in 1977, making 160 Water eligible.

Now, says the city's Garodnick: DANIEL GARODNICK: We now support and want to see mixed-use 24-hour neighborhoods.

So we are looking to update our own rules to allow for more opportunities for office-to-residential conversion.

PAUL SOLMAN: As cities almost everywhere are, says New York University housing policy research director Matthew Murphy.

MATTHEW MURPHY, New York University: Any urban place in the country that has office space -- we all went through the pandemic - - they're all asking the same question.

PAUL SOLMAN: Chicago recently announced a plan to turn about a million-and-a-half square feet of vacant downtown office space into mixed-income housing.

Mayors in Washington, D.C., and San Francisco plan to ease financial burdens to encourage conversions and roll back the zoning restrictions stopping them.

Architect Paynter's firm has looked at nearly 1,000 office buildings in the U.S. and Canada.

San Francisco, Calgary, Calgary, Boston, Chicago, Seattle, Denver, Denver, Denver.

STEVEN PAYNTER: Yes, it's about 30 percent of the buildings across the U.S. and Canada that make good conversion candidates.

PAUL SOLMAN: But here's a question I had.

You may well too.

Will these conversions really do anything to address New York's and other cities' housing crises?

This one will cost literally hundreds of millions of dollars, a cost that will be inevitably passed on to future tenants.

Developer Joey Chilelli: JOEY CHILELLI, Vanbarton Group: Our studios will range from $3,500 up to two bedrooms up to $7,500.

PAUL SOLMAN: The street vendor right on the corner's response?

MAN: Mucho dinero.

PAUL SOLMAN: "That's a lot of money."

No, imposible?

MAN: No.

Mucho dinero.

PAUL SOLMAN: Where do you live?

MAN: Brooklyn.

PAUL SOLMAN: Brooklyn.

Four people, $1,800 a month.

BARBARA LAMOTHE, New York: It's tough.

PAUL SOLMAN: Barbara Lamothe, who was just passing by, is looking to move on from her parents and get a New York apartment closer to where she works, earns $54,000 a year.

This building is being converted from offices to apartments.

A studio starts at $3,500.

BARBARA LAMOTHE: Three thousand, five hundred?

I will never take it.

(LAUGHTER) BARBARA LAMOTHE: I can't afford that.

PAUL SOLMAN: And right on the property itself, there are hundreds of people working here, but they won't be able to afford to live here, right?

I asked a couple, and they said no way.

JOEY CHILELLI: This is not an affordable housing project.

What I will say, though, is that what we are doing, we are helping that overall housing crisis.

PAUL SOLMAN: How so?

JOEY CHILELLI: We are putting more units on the market.

You put more units on the market, you put more supply into the system, and that will bring prices down.

PAUL SOLMAN: Which would mean more affordable housing for some, but, of course, not everyone.

MATTHEW MURPHY: We're not going to get affordable housing, purposeful, low-income housing.

PAUL SOLMAN: Not if the market dictates price, says Murphy.

MATTHEW MURPHY: To get low-income housing or the type of housing that really reaches the workers, that really takes purposeful subsidy.

And that model has worked in New York City.

There's no reason we couldn't make it work for offices too.

PAUL SOLMAN: But, at the moment, the street vendors, construction workers, and the likes of Barbara Lamothe are left out and Shams DaBaron' constituency left out in the cold.

For the "PBS NewsHour," Paul Solman.