Could converting empty office space help curb Toronto's housing crisis? One councillor thinks so
CBC
A Toronto councillor is pushing to convert older and under-used office buildings into apartments or condos in a bid to fight the city's housing crisis.
Coun. Brad Bradford has introduced a motion to be debated at next week's planning and housing committee meeting asking the city take a closer look at the possibility of converting some such buildings into residential housing. He also wants Toronto to drop restrictions requiring developers to replace converted office buildings with equivalent space for businesses elsewhere.
"It's never been more difficult and more expensive to live in the city of Toronto," Bradford said. "And we need to take advantage of every opportunity to deliver more housing supply for people who want to call Toronto home."
Bradford says office vacancy rates within the downtown core remain at approximately 50 percent of pre-pandemic levels. With many employees working from home, employers are shifting their office space to have smaller footprints, he said.
"The reality is, the nature of work has changed," he said. "We will see people returning to the office, but they are going to return in a different format. There's a lot more hybrid work. And as a result, companies don't need the same amount of space."
But converting an older office building into residential housing isn't easy. Offices designs make ensuring all of the apartment units have access to windows, that water pipes are in the right space a challenge. Some older buildings have hazardous materials, like asbestos, which need to be removed.
Not every building is right for a conversion, Bradford acknowledges, but city rules around office stock replacement are often the final roadblock that prevents developers from re-purposing a site.
Bradford would like city staff to incorporate his request into an analysis of office space that is already underway.
"I think those policies were written in a different era, when there was a different market environment, and frankly, different challenges around the office context and the housing context," he said. "Right now we need to focus on housing."
Michael Case, managing director of CBRE's downtown Toronto office leasing team, says that commercial real estate services firm puts vacancy rates at just over 15 per cent. That's up from an all-time low of two per cent in the city before the pandemic.
But Case says there are a few distinctions to make in those figures.
High-end, so-called "Class A" buildings, which are often new and offer better amenities, have low vacancy in the Toronto. It's the "Class B or Class C" properties that are decades old and offer less to businesses that are struggling to attract tenants, he said.
"That's where we're seeing a lot more vacancy and landlords getting more aggressive on the types of deals that they'll do," he said.
Case said there is a better balance to be struck between the high vacancy rate today and very low rate pre-pandemic and residential conversion could help address that. Neither level is healthy for the commercial real estate market, he said.
