Riverside opens vacant offices and industrial buildings to housing — in a market where offices are 96% full
The adaptive reuse ordinance lets nonresidential buildings at least 15 years old convert by right to housing or mixed use across commercial, office, mixed-use, multifamily, and business manufacturing park zones. By right is the operative phrase: no rezone, no discretionary hearing, parking frozen at what exists, plus reduced open-space requirements and height flexibility. That removes the entitlement risk that makes conversions hard to underwrite — the same mechanism behind Los Angeles's citywide ordinance and a wave of 2026 state law, from SB 79 to AB 1050 to the AB 2011 conversion track.
The catch is that the model doesn't fit the market. Los Angeles wrote its ordinance against more than 50 million square feet of empty offices. Riverside has the opposite problem: CBRE has put the Inland Empire at the lowest office vacancy of any major U.S. metro for five straight quarters, and Mayor Patricia Lock Dawson told her January State of the City audience that roughly 96% of the city's office space is occupied. Office is the tight asset here, not the distressed one. No significant office product is under construction, and rents are inching up.
What is soft is industrial. IE warehouse and industrial vacancy has climbed to the 7.8% to 8.5% range depending on the brokerage, rising for four straight quarters as large-format tenants vacate and new construction starts fall to a 15-year low. That's the stock a conversion tool actually finds in Riverside — aging commercial strips and older business-park buildings in a region working off an industrial glut, not empty office towers.
Which is exactly where the ordinance gets complicated. By opening business manufacturing park zones to by-right housing, the city invites residents into districts built for operators that run around the clock. Councilmember Chuck Conder named the problem directly: put housing next to industrial and commercial uses with truck deliveries and forklifts, he warned, and "expect a lot of phone calls." For a plant or distribution operator, a residential neighbor is a future noise complaint, a nuisance claim, a constraint on night operations — a live risk the coastal ordinances, converting dead office districts where nobody operates, never had to price in.
The push behind it is real. Riverside has permitted under 20% of its state-mandated goal of 18,458 homes for the 2021–2029 cycle and built no new very-low-income housing since 2021, keeping it under state scrutiny. Councilmember Sean Mill, who first raised an adaptive reuse ordinance a decade ago, framed it as a way to revitalize aging corridors like Magnolia. Whether it produces meaningful volume is the open question: the city hasn't put a number on how much older commercial and business-park stock would actually pencil for conversion, and construction costs and financing remain the same obstacles they were before June 23. The ordinance clears the zoning path. Whether the buildings pencil is a separate test, and the market hasn't run it yet.