Challenges ahead for plans to turn 5 city parking lots into housing, broker says

As the city grapples with a housing shortage, London city councillors will be asked next week to kickstart the process of redeveloping five municipal parking lots into high-density residential units and public parking.

Two downtown-area lots and three in the Old East Village (OEV) have been deemed prime for redevelopment, according to a report going before the strategic priorities and policy committee next week.

City staff recommend that council direct them to solicit proposals from qualified firms to convert the lots, something which would add needed housing to the core and support bus rapid transit.

They also want council to approve $137,000 for site investigations to give developers more information about each property.

"This is something I think there is potential in. I think it's something where the potential is unknown until we go through the process," said Mayor Josh Morgan on Thursday.

Using his strong-mayor powers, Morgan directed city staff in February to identify city-owned lots for redevelopment, a plan he proposed during his State of the City the previous month.

Nineteen lots were examined, of which 12 were cut for reasons including that they were too small or were entirely in the flood plain. Also excluded were parking lots at 185 Queens Ave., and at Budweiser Gardens, with the former the subject of its own procurement process.

Morgan expressed optimism the city would see developer interest, but said that even if only one lot were considered viable, "that's better than we had today."

At least 10 per cent of units in any proposed development should be affordable housing, the staff report says, meaning either at or below average market-rate, or 30 per cent or less of a household's gross annual income.

"I'm going to continue to be as aggressive as possible to try to create housing in the city and try to create as many affordable options for housing," Morgan said, highlighting incentives for office to residential conversion, and recent funding announcements from senior governments.

Brent Rudell, broker of record for Cushman & Wakefield Southwestern Ontario, said it was great to see the city acting on underutilized land, but thinks finding buyers may be challenging.

The brokerage itself has several downtown surface parking lots on the market, including across from RBC Place, that have yet to find the right suitor.

High interest rates which have helped soften the residential market, and high construction costs continue to be major roadblocks for developers building the high-density projects the city's looking for, he said.

The lots themselves may also prove challenging. The staff report describes two proposed lots in the OEV as being "saw-tooth" shaped.