When a studio apartment runs out of obvious room for a desk, interior designer Kyle Schuneman converts a closet into a work space.

For example, if you rent a 1,000-square-foot apartment for $1,000 per month and you use a 300-square-foot room as an office, you can take a rent tax deduction for renters of 30 percent, which is $300.

Creating rental apartments in former offices, factories and other nonresidential buildings is nothing new, but a recent increase in vacant commercial spaces as a result of the pandemic has fueled ...