Turning Empty Offices into Homes: Can It Work in Toronto?

Toronto is struggling with two major problems: a housing shortage and a rise in empty office buildings. Turning unused office spaces into apartments seems like a good solution, especially as rents in the city continue to rise.

A closer look reveals that Toronto's plan is far from straightforward. High costs, regulatory barriers, and mismatched building designs make these conversions a significant challenge. Learning from other cities and adapting policies to local realities could turn this ambitious goal into a meaningful step toward solving Toronto’s housing crisis.

Why Turning Offices Into Homes Makes Sense

The number of empty office spaces in Toronto has been growing fast, partly because many people now work from home.The office Vacancy Rate: Reached 18.3% nationally, up 110 basis points (bps) from 2022. With so many buildings sitting unused, converting them into housing seems like a win for everyone.

Calgary has shown how office conversions can work with its Downtown Development Incentive Program. So far, the city has helped fund 11 projects, turning 1.57 million square feet of empty offices into over 1,400 homes. For every $1 Calgary invests, it gets $3 in private funding, with a total of $429 million invested so far. The goal is to remove 6 million square feet of vacant office space by 2031.

Why Toronto Has It Harder

Toronto’s office buildings are different from Calgary’s. Many of them, especially downtown, are huge towers built for businesses. These buildings are harder and more expensive to turn into homes because they often need major changes, like adding more windows or plumbing.

City Rules

Toronto often requires developers to keep some office space when changing buildings, especially in job-focused areas. This can make projects too expensive to work.

Office Buildings Are Hard to Convert

Office buildings aren’t built to be homes. Many have wide open floors and very few windows, which don’t work well for apartments. To fix this, developers have to add plumbing, walls, and windows, which costs a lot of money. In many cases, it’s cheaper to tear the building down and start over.

Why It Matters‍

These problems make it hard to turn empty offices into housing, even though Toronto certainly needs more homes. Without changes to the rules or more support for developers, these buildings will stay empty, and the housing crisis will keep growing.

For this plan to work, Toronto needs to adjust its policies and make it easier and cheaper for developers to do these conversions.

What Toronto Can Learn from Calgary and New York

Calgary’s success shows what’s possible when cities make it easier for developers. By offering grants and relaxing zoning laws, Calgary gave developers a reason to take on these projects.

New York City is also testing office-to-housing conversions. They focus on mixed-use buildings that combine homes, offices, and stores. They’ve made the process faster by cutting down approval times.

Toronto could follow these examples by:

• Offering financial incentives, like grants or tax breaks.
• Changing rules to allow full conversions instead of keeping parts of offices.
• Encouraging mixed-use projects that combine housing, retail, and office spaces.

What Needs to Change in Toronto

If Toronto wants to make office conversions work, it needs to focus on smaller, older buildings that are easier to adapt. The city also needs to create policies that make these projects cheaper and faster to complete. Financial help for developers, like reduced fees or grants, could make a big difference.

Turning empty office buildings into homes won’t solve Toronto’s housing crisis overnight. But it’s a step in the right direction. By taking notes from cities like Calgary and New York, Toronto can make better use of its empty spaces and provide much-needed housing for its residents.

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