Empty offices were pitched as housing solution. Toronto has realized it’s not that simple

Converting Toronto’s empty office space into housing will not be a straightforward process – and may not even be feasible in some cases, a new report indicates.

Converting Toronto’s empty office space into housing will not be a straightforward process – and may not even be feasible in some cases, a new report indicates.

The new report written for the City of Toronto shows that while some past office conversions appear to be “profitable,” most don’t yield sufficient investment returns to be pursued by developers, regardless of location.

Office conversations had been considered a way for Toronto to provide desperately needed housing for residents in an attempt to lower prices and sky-high rents.

The idea, which has proved successful in other places like Calgary, meant retrofitting empty and underused offices. But because of Toronto’s office replacement polices, city councillors are set to be told that won’t be as easy as it may sound.

Instead, knocking offices buildings down and starting again on the vacant land is one solution, according to the report, which also looks at why building new offices is not profitable anymore.

“Now is the time to consider a marked policy response that enables an appropriate amount/type of conversion activity in response to a wholesale shift in the market, with a focus on providing flexibility and relaxation of the city’s policy structure,” the report reads.

Office vacancies, triggered by the COVID-19 pandemic and hybrid work, have not slowed down in Toronto.

Last year, the percentage of vacant office space rose throughout every quarter, closing out 2023 at 17.5 per cent – a three per cent increase from the same period in 2022, and a 13.6 per cent spike from the fourth quarter of 2019.