Affordable Housing in Toronto: Converting Office Space
The city of Toronto is buzzing with energy and ambition, but its sky-high office vacancies in the post-pandemic world, the highest since 1995, present a unique challenge for affordable housing Toronto. Meanwhile, Toronto’s housing crisis rages on, with affordable housing in short supply in most neighbourhoods. Some experts are proposing an innovative solution – converting office space into residential units for sale or rent. This would provide much needed relief for first-time homebuyers and renters.
Turning Office Space into Residential Units: A Viable Solution?
The idea of converting office space into apartments is gaining traction, fuelled by the success of similar projects in cities like New York. A recent study by Avison Young highlighted that around 900 office buildings in Toronto show potential for conversion into residential space. Yet, according to Colliers International, this solution remains a niche prospect due to the complexities involved.
There are a number of factors to consider as it’s a complex discussion including a number of items. These include local policy restrictions, structural considerations like the building’s footprint and the sheer cost of retrofitting. Each building presents a unique set of challenges. So, while the idea is appealing, it only becomes a reality when the numbers add up for private investors, with our without the aid of government agencies.
Crunching the Numbers
The costs associated with converting an office building into residential units could range from $375 to $450 per square foot. This high cost may discourage many potential investors, as it may not be financially viable unless there is significant rental demand. Despite these cost hurdles, research suggests there is potential for hundreds of conversions within the Greater Toronto Area. Which in turn, could contribute significantly to affordable housing solutions.
Identifying Conversion Candidates for Affordable Housing Toronto
The Avison Young study targeted buildings with floor plates no larger than 15,000 square feet and constructed before 1990 for potential adaptive reuse, as these represented the best overall options for consideration. Avison Young cautions against converting buildings with a large footprint, as these can be challenging to redesign into appealing, well-lit residential units. Older buildings, typically with higher vacancy rates, may present more promising prospects for conversion. Looking specifically at Toronto, about 30 percent of the office inventory (923 buildings) showed promise.
Beyond Residential Conversions: Exploring Other Opportunities
Office-to-residential conversion is not the only potential use for these vacant spaces. Other suggested alternatives could include repurposing office buildings into educational facilities or labs. The key is to remain open to other possibilities while acknowledging the complex reality of building conversions. Regardless of the options available, there’s no doubt that solutions need to be brought forward to address a lack of supply and inventory in the market.
Even with these challenges, the task of identifying viable conversion projects remains crucial. Each new housing unit, whether a townhome, apartment, or single-family residence, adds to the city’s housing stock. While conversion projects aren’t the complete solution, they certainly could be part of addressing Toronto’s affordable housing shortage. With more inventory on the market, it could work toward reducing overall costs of renting, or buying, residential units in the city.
In the midst of these complexities, the drive to find solutions that both utilize vacant office space and alleviate the housing crisis in Toronto continues. There are no perfect answers in a complex environment with so many factors. The city is definitely ripe with potential, and with innovative solutions like these, perhaps we can look forward to a future where every Torontonian has a place to call home? Find your own home for sale or rent now in Toronto.