globalnews.ca/news/10484578/toronto-office-vacancy-conversion-meeting/
Toronto’s offices are emptying out. The city wants to know what to do with them
DiscussionIt’s been said before but commercial real estate can’t be converted to residential easily. Consider water consumption. Every apartment unit has a washroom, a dishwasher (maybe), washer/dryer (newer buildings anyways), bathtub, 2 sinks, etc. commercial spaces are just not designed to consume that much water. That’s just 1 thing, now consider the million other things and conversion costs start to add up
So instead of the government wasting money on rental freedom of rights. Why not buy these buildings at 10c on the dollar. Invest in the tear down and sell it for a development with fast ticked approvals and mix of low income housing etc.
Will the owners sell for 10c on the dollar? I can’t say for here but I follow Louis Rossmann and looking at NYC commercial real estate situation the owners of these properties won’t even reduce the rent (because in commercial real estate mortgages, rent counts towards property value and reducing rent means the property value takes a hit).
I’m not saying I agree with them, and Idk how sitting on an empty building for years on end makes financial sense but for some it does.
User deleted comment
23d
that would be too smart for us to implement
You're making perfection the enemy of progress here and trying to maintain the status quo of downtown Toronto being luxurious. We are in a crisis here. Make them into dorms and have laundromats on the first floor, shared washrooms on each floor and no dishwashers for low and mid income people. This isn't black magic and it isn't impossible since it's done at schools all the time. People working normal jobs in the city need a roof over their heads and they can't and should not be commuting every day.
lol I’m a random guy on the internet, my opinions don’t make or break anything lol, and I’m not trying to do anything. I’m just saying what’s being proposed here is expensive. There’s a reason everyone is trying to mandate you back in the office. I’m not saying the conversions won’t happen, just that they’ll do literally everything else before they’ll even entertain that thought.
And not for nothing but have you ever been to an actual downtown condo/apartment? 90% of them are not luxurious and basically already are dorms
The conversion is expensive, but so is an empty building. They don't have to be high density housing, large units use less water per square foot, and having less units per floor also reduces or eliminates the issue of central units with no windows. It's not as cheap as people think it will be, but it is doable. If these buildings stay empty then all office spacenpricing goes down, occupied buildings need to lower prices to compete, no one is making any money and buildings go bankrupt or derelict, which is a whole other set of problems, squatters move in, crime, etc.
it’s not easy but it can be done. 1 st clair west is currently being converted from an office building to a mixed use residential building
Commercial real estate cannot be converted into easy to sell residential units, but it can be made into low income, dormitory, housing, and other solutions. They just aren’t as profitable.
Oh no! We better force more people back to office work then!
Right? Like, read the comments here and it's "will somebody please think about the investors?!"... I'm sorry, my REITs are in the sink as well, but I'd rather people weren't forced to commute just to keep the status quo. Change the zoning restrictions, funnel the Fed funding to convert it to housing. Or let the big hand off the market decide what to do with it, but something's gotta give.
That's what the feds want.
I know and I think it's silly.
And I appreciate you thinking that. I'm going to send you virtual hugs and high fives because you deserve them.
Good, the paradigm of sticking every business in Southern Ontario into the same few city blocks is insane in 2024. Downtowns like Hamilton have tons of vacant office space, it’s ridiculous to demand people commute to the same locations in Toronto only to login to a computer VPN, accessible anywhere on the planet, and do all the work and communications via email.
Hamilton blows
It blows because of this very reason.
Relatedly, the province should have started scattering their offices. While Deputy Ministers and Assistant Deputy Ministers may have kicked and screamed about their ministry getting relocated to North Bay or wherever, their hundreds of workers likely would appreciate the sudden boost in affordability and they would have injected money into economies where there actually is room to build more housing.
It would also provide an incentive to produce reliable regional transport for business class passengers, like the Northlander train.
Why not convert them into affordable housing?
Not easy but a good long term plan
Good stuff doesn't need to be easy. There's probably at least 30% of the empty commercial real estate that could be converted without a huge fuss. That would create quite a lot of housing. It wouldn't be easy, but probably easier than some other alternatives. And it would help with density, which we are sorely lacking
Only problem: it costs money. And unfortunately, the government and developers only care about short term spending/short term gains right now. It sucks, because I agree, it's a relatively easy, albeit a bit more expensive, alternative to new construction! And, if need be, have the buildings be mixed use office/residential!
Calgary did it.
Yes, I read about it. Wasn't easy but a good project.
Office building floorplates are often not easily converted into housing. Window layouts, utilities, etc.
Plumbing for sinks/dishwashers/toilets/bath/showers.
Adding fire rated separation walls between units (i.e. Adding new concrete walls which the floor slabs weren't designed for).
Adding ventilation/exhaust for kitchens through the cladding.
Even just getting all the extra boilers you'd need, water tanks. New fire pumps, faster elevators. Maybe an up rated MUA.
Probably asbestos abatement. No operable windows (I assume).
It'd be a fucking fiasco. Everything would be an issue.
And keep in mind, that you'd have to buy and hold that building as you worked out the engineering on it as you pay to demo it. And the engineers/trades are going to charge a premium for the conversion because they know its going to be riddled with problems.
It would cost millions to add all that and even if it was added, you are essentially left with high end apartments, not affordable housing.
Everyone gets a corner penthouse!
I'm building a high rise (rlectrician) right now where the original plan was floors 1-5 were offices and 6-11 were condos. After we got to floor 7 they realized nobody wants office space anymore and want to convert the lower floors to residential units.
The biggest issue is plumbing. Now instead of 2 bathrooms side by side per floor, we need 7-8. This means they need to drill through the floor for drains, which means they will hit a bunch of our electrical wires (many high rise buildings have the electrical embedded in the concrete). If they do that now we need to run surface mounted pipe to replace the damaged wires which looks pretty bad in a residential setting.
I'm sure there are other issues as well that are outside of my scope, but this is just one reason why retrofitting offices to residential units is more difficult than you might expect.
But how do we do it with old manufacturing plants? This can be done - Calgary is doing it.
This can be done - Calgary is doing it.
It has to be done on a case by case basis. Some buildings are much easier to convert than others.
I live in converted office space and you're right. People seem to forget the wide variety of buildings
In Calgary they tend to be smaller older buildings with smaller floor plates, here's two different examples (first is pre-conversion, 2nd is post conversion)
Any that are that size tend to be good candidates
Old manufacturing plants were gutted inside with plenty of open space to work with. Office buildings have multiple floors with relatively low ceilings and more hazards than old toxic dusts.
Of course it can be done. It’s just a matter of how much money it’s going to cost.
Plants tend to be low rise and rectangular in shape with a wide open space
Office towers tend to be tall and square with central layout for plumbing (shared washrooms) and floors that only allow for limited core drilling
It’s the height of building which makes it much more difficult. Each floor of office building is not designed to easily be turned into a residential space.
Simply the ability to add utilities costs too much and it would actually be cheaper to knock the whole building down and build a new building.
Even adapting the plumbing stack for single-unit housing vs. a large communal restroom setup is very complicated and expensive.
People want what they pay for. Charge low rent, meet low expectations.
Doug Ford would probably go for a few converted to casinos!
There are floorplate restrictions on residential properties that don't exist on commercial. For example, they can build higher and cover a larger part of the lot as commercial real estate than they could as residential. That's a municipal zoning issue.
User deleted comment
23d
There are a few different reasons, but for simplicity I'll give a major one. Fire safety requirements and the results on floor plans
For fire safety and livability reasons all bedrooms need a window to the outside. A bedroom does not need to be on an outside wall, but if it's not it needs a window or glass door into it from the main room such that there's a direct sight line to the bedroom.
There are commercial rules about fire safety too like this, but they are easier to maintain as a large floor full of cubicles has a direct sight line all the way at the center still. Even with larger resi units they still don't take up the floor space well enough. Since it's expensive to convert, you need to sell those units. Larger units are more expensive and so don't all sell (and if priced to sell will now loose money converting). So if you converted the building to have units of a size that will sell, you have a ton of dead space in the middle of each floor. Even if fire safety allow units there, no one would want to live in them unless desperate and no one desperate has the cash to buy.
Engineering/technical 100%
Plumbing alone would be a nightmare
Plumbing is the nightmare. Much of your utilities are hidden in the ceiling; plumbing is often through the concrete slab and into the ceiling below.
Everything else is just tearing out or rerouting existing solutions. Expensive, but fairly straight forward. Replumbing commercial into residential may mean extensive drilling, and unless it was planned for -- many building may have been designed to accommodate condo and commercial use -- you may have to compromise on where you do it, which means you may not get as many units as you'd hope.
The cost of converting a commercial space to a livable residential space is pretty much the same as tearing the building down to the foundation and starting from scratch.
It won't be affordable after conversion. It's not like you can put up a few walls and be like ok, ready to go. A commercial building and built and purposed for commercial. Resident buildings are built and purposed for residency. Starts from the initial planning on where to build it and utility requirements.
Be easier and cheaper to tear them down and rebuild sadly. But still that would be the ideal solution. WFH is here to stay.
How many offices have windows that can open? None…
You’d have to replace the entire facade
That’s why it’s usually just old factory lofts that are converted as they have windows that can open.
Its very expensive and difficult. You would need to rip out all the plumbing and move everything around. And many office buildings are yhe wrong dimensions to properly convert to apartments.
So. Do it anyways. Or tear them down and build. Both are expensive. Just do something to get people off the streets.
Do iT aNyWaYs
What great advice. Condos and office towers are not the same at all, it takes a lot of resources to convert an office into something liveable. It's not just a simple matter of having square footage.
Iirc, it's actually cheaper just to build new housing than to convert these spaces.
These buildings are privately owned and it would cost a huge amount of money to expropriate them. And then it would cost a huge amount of money to tear them down and rebuild. In most cases its not a viable option.
Maybe they should just force convert single family homes into duplexes....
Not a bad idea. Buy up clocks of monster homes and convert them to multi-family residential. Works for me.
Blocks*
I suspect it would be cheaper to convert single family homes. Plumbing and electric would be the issue. They generally can't be sold unless they're separate.
It's at best, extremely expensive, which kinda prohibits the whole "affordable" part. Theres plenty of buildings too where while technically possible, is not financially viable. Then there's buildings where it's just not even technically feasible.
Because most of them aren’t even possible to convert and those that can would be exceptionally expensive.
Even if it was feasible it definitely wouldn’t be affordable housing.
I think I did napkin math once on ScotiaPlaza and units would need to sell for around $2M a piece to make it a remotely profitable venture
Source: used to work in a commercial real estate office
converting office spaces into living spaces costs just as much as tearing it down and building a new one. office buildings don't have the same code requirements that housing does
Right?! Seriously!!!
Good incentive but there's always excuses not to invest in poor people. Even Ontario student loans were reduced and Canadians can barely get by as students.
Let's not forget about Schools, parking, grocery stores and other amenities. You don't want to create failed projects in the middle of the city that never had a chance to succeed.
From reporter Aaron D'Andrea:
Toronto's offices are getting emptier, and the city wants to know what it should do with them.
The percentage of vacant office space in the city rose throughout every quarter last year, 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.
The city’s call for input is part of a study it’s doing on office conversion amid an ongoing housing crisis that has “elevated pressure” for residential intensification, it said in a notice on its website.
Read more: https://globalnews.ca/news/10484578/toronto-office-vacancy-conversion-meeting/
Why not turn them into housing? Toronto needs more housing.
Your posting this like this is a counter argument, I know the challenges, but I don't see a good alternative to such valuable restate.
Its valuable real estate that is not owned by the city.
Oh, I get what your saying, if people want to keep paying the tax on empty towers instead of investing thats there right. though I doubt the right move as in the last 5 years office spaces have become much less valuable and I dont see them ever gaining im popularity like they use to be.
User deleted comment
23d
Don't worry.. I'm sure the government will bail them out with our tax money.
Amusement parks in the towers. Huge Drop Zone 2.0 ride.
If they started four years ago when they knew the world was changing we would have thousands of affordable housing units right now
Why does Toronto care as long as the landlord keeps paying the property tax? If they don't pay then expropriate the property and do what they like with it.
Outside of this,
City planners actually do care and they see spaces that could be used in better ways then "big empty and paying taxes"
Also human traffic feeds the businesses in the area. My wife use to work at the hair salon, it was dead, no clients everyone working from home
So move to where people live, then?
Then the hair salon should move, it's not a good business model to have a store where there aren't any people.
Because lots of pension funds are put into these buildings as investments before Covid since they were stable investments. If they are forced to sell at a low price there is a risk of contagion in the capital markets and therefore will directly affect everyone in Toronto and Canada
EDIT: so many people here are armchair economists. The system is what it is. If you guys can design a better one, we’d all appreciate it. But the fact is, this is a problem and it will impact you whether you want it or not. You can blame CEOs or private equity or corporations, but that will neither solve the problem nor change the system.
The thing is, you can only artificially prop up a dying market for so long. It's pretty clear at this point that while not everyone is WFH all the time, there's a sustained and lasting amount of remote work that's probably going to stick around, and while maybe providing a somewhat soft landing is reasonable, eventually trying to keep downtowns alive without acknowledging that they need to stop being office blocks at some point is going to get real expensive real fast.
Legislate CEO bonuses out of existence and address executive salaries by tying capital risk to their pay structure. Oh you fucked up your pension plan? Better get used to Kraft dinner.
Pension funds are run independently of employers for this very reason. Why would Aritzia’s CEO know how to run a pension plan?
Oh no! Anyways…….
Directly affect people who have a private pension you mean
Teachers, healthcare workers, government workers. It’s not private pensions.
Which is a very large amount of people lol
If they are in trouble their mistake was assuming any one asset class was stable. Risk is part of the investment, make the bean counters eat it like they signed up for. Fuck bailing out finance every time. Privatize profit socialize risk bullshit.
It's not even economic design, just city design. Hell the writing should have been on the wall decades ago.
Which also reminds me, forget office downtowns for a sec, think a Wal-Mart bog box store. Eventually leaves, same thing. ..... what replaces it? At best, another big box store.
The dozen small businesses it replaced? One goes out one can be converted to another business. Of course anywhere like that is turned into a place you're supposed to just drive through, until the office buildings closed and then that happens less and less.
City design.
A ton of tax revenue is being lost in many ways. The people that work in buildings and the businesses that we use for goods and services
Those businesses providing goods and services are behind the curve here, when the pandemic hit and WFH took off, they should have seen the end of their previous business model, and closed up shop. It's a supply and demand thing. There are few people in offices, so there is no demand for the services. Nothing they can do about it really.
I'm just explaining the same thing you are. But really, do you expect all the stores and restaurants to change their business model rapidly at the onset of a pandemic? C'mon.
Its been a long time since the bulk of pandemic fallout ended in terms of people being unable to go out and get "back to normal"
Because a lot of places inside, underground, and surrounding office buildings rely on people going to office. You have things like food courts in the PATH that cater specifically to lunchtime office crowds and close up in the evening.
because there are tones of businesses set up to support that volume of people coming into the city every day. it's a lot of money staying at home not buying food, drinks, cabs and the occasional lap dance!
I don't know what the case is for Toronto but I think property assessments and taxes could be based of the value of a building. No tenants means lower value means lower property taxes. If building owners don't have tenants and can't operate the building profitably they can just walk away. The building then turns into a liability to the city.
Bingo. Office valuations are the highest of any property type because of the insane rents companies were willing to pay.
At a time when cities are desperate for tax revenue to pay for all their social spending, their cash cow (office) is dried up.
Expect public services to continue worsening and more of this tax burden to be shifted to residential property tax.
Not looking to rosy for cities these next few years…
Yes this has happened and will continue to happen here in Calgary. Residential taxes increasing to offset the loss of taxes from the downtown core. The city has a had a couple pilot projects of converting buildings to residential but the last I heard contractors weren't being paid and the project is stalled and needs more funding. I doubt these conversions can happen profitably in the private sector. Likely an increasing problem for Cities everywhere
They care because this affects how they plan the city. Not applicable here but lets say they are planning a subway station at a certain location, having x offices around imply that there will be commuters and demand for the station. They plan based on land use and density, if we have empty buildings this changes completely how they analyze the location.
That’s not how it works. And the revenue you’re talking about goes down significantly the longer they remain empty. The value of the asset falls and so do revenues. That’s why they care about it.
And you can’t just expropriate because someone stops paying taxes. That’s not how it works at all
Convert them into orgy rooms & demonic worship centers? I dunno, just throwing ideas out there.
I can get behind this. A red light district tower with hookers, and gambling.
At least it would boost economy
😂😂
House people ffs
I think we should turn it into a giant airsoft arena
Hmmm, office spaces opening up, houslessness on the rise…. It’s like, you could almost use one situation to solve the other one. Nah, never mind. Such a silly idea.
Allegedly conversion is a non-trivial task.
Tear them down and building housing.
Yeah no, I am there 50% of the time, making a two hour trek each way in a public transit, go train and walking through the path that is becoming crowded as of late Tuesdays through Thursday. What do you want from my life
Airbnb the spaces, with actual air beds.
When you make it impossible for people to commute to the city without spending hours on unreliable transit this is what happens. Working from home becomes a huge quality of life issue, a big savings for the company and the employee. Not everyone wants to live downtown or can have both partners find work downtown…someone ends up commuting. They should invest in the arts and things that will make an impact on culture and attract tourism. And some should be housing.
City of Toronto : can anyone think of what to with all these buildings?
Everyone: yes housing!
City of Toronto: does anyone have any ideas !
Turn them into parks or playground areas or something. Patios or bars, instead of these 40 story cubicle work prisons.
Make them into ten million smaller condo apartments. Then Sell them all to international investors who do not need them.
Take it off the market for 5 -10 years.
Completely INFLATE the housing prices. Over charge SHRINKING middle class with rent. Then Sell them at a very high price to desperate locals.
The Canadian Gov. ( Libs & Cons)
Because we the (gov) fucking hate you ( hard working 9-5 Canadians )
House people.
Housing
Rezone them to make affordable apartments or something. Boom, next question.
Turn them into farms. We gotta grow food somewhere as the greenbelt gets paved over.
I do hope that they get some good advice from consultants.
I would love if they could explore some mixed use floorplates so we would see some residential mixed inside commercial space to minimize the plumbing / fire challenges of converting.
I'd also like to see DC's waved for demo projects that are converting commercial towers to residential towers.
Toronto needs to find a way to make the street level more vibrant and attractive to both residents and tourists, and these office tower conversions could be part of that path.
Oh look, empty offices, thousands of Canadians misplaced... Put em together and that's progress. Affordable housing. Now.
Rental Housing? 🤔
Toronto is dying.
Condos no one wants to live in and offices no one works in.
This started happening after the 2008 recession. There were lots of fun and unique businesses because it was affordable to start businesses. Not anymore.
A sign that real estate prices are coming down?
You would need to get creative, but it might be feasible to make very large apartments out of these, depending on how much water and sewage is on each floor. I assume they already have fire regulations in place for large numbers of people to get out at once so I don't see how it would be an issue to meet the same regulations for like 4-8 people per floor, even a dozen, who just happen to sleep there.
If necessary, add water storage, which allows for more on hand for increased residential units, rent some lower levels as stores (built in convenience stores, grocery or even restaurants that also serve the area would I assume add value and bring in extra money to support the whole project).
I'm not an engineer or architect and don't know the pertinent laws, but again, I can't see how it's impossible. We need solutions, and that is going to mean changes to what we know now probably.
Are commercial rents falling? Ive been looking for an office for my sidebusiness (three people and a bunch of servers.)
Housing
Utilize the new vacancy tax? If they are not keeping it full, they need to be paying fornit to not be full
Oops, I forgot that only applies to homeowners and not real estate companies as they are choosing to jack up rent and have empty space...
Maybe they should be enforcing similar rules
Housing.
Doesn't matter if you have to raze it to the ground and re-build, if it stops serving it's its purpose, get rid of it.
There's no protection for workers who are laid off in an instant or debtors who are paying million dollar mortgages, but there's protection for these "commercial investors" get out of here. And stop forcing people back to the office.
💯 Like why is this part so hard to figure out? We have buildings we no longer need and loads of people that need to live inside. Seems like an East match to make.
It's easy! Simply mandate that the citizens of the GTA to have to fill those buildings 3 days a week
There is a solution affordable housing
Yes... What to do with unused space in the middle of a horrendous housing crisis?
You can't convert office buildings into residential... You might as well tear down and start new
housing
Yes, it can be done. Yes, it is costly. It would pay for itself in the long term.
It will be investor condos, don't act like you're people cause you're not, you are a product for landlords that is it. Stop complaining.
House the homeless.
Turn them into apartments for thr homeless
This is much easier said than done. You would need to rip out all the plumbing and move everything to accommodate apartments. Electical needs to be changed. And many office buildings are the wrong dimensions for apartments.
Would it be possible to make it a kind of dorm room style living spaces without having to rip out all the plumbing and change all the electrical stuff?
Who? The government? I’m ok with using taxpayer money to make affordable housing, but this isn’t affordable. There are cheaper options
Tear them down and build apartment towers. Done.
The government does not own these buildings. Expropriating the property and demolishing it makes the idea prohibitively expensive.
Well if they decide to sell, and you want to purchase and build, by all means. You don’t see this happen very often because how expensive it is
Convert them into vertical warehousing for goods in the city. They've always been inefficiently used for maybe 12 hours a day.
Good for homeless
Would squatter’s rights apply here?
Affordable housing.
Sounds like capitalism isn't on their side now. So time to lobby ....
make them affordable housing
Well I don't know, with this huge housing surplus we have going on....
Convert them into affordable rentals.
Let people live there. Charge super low rent.
Empty office tax? I’d be happier with higher tax rates for the rich, but taxing their business will have to do.
Spaces for families...family housing...social housing
Waiting for power of sale to scoop one up. We are approaching a Recession followed by the Great Depression.
Companies are switching the Hybrid model they won’t be empty for long if people want to keep working
Cheap housing
These can't easily be converted to homes. Sadly.
But they can be provided to businesses on the cheap.
Let's incentivize small business entrepreneurship by providing free/low cost business spaces to spur economic growth and bring in talent.
Parking lot for bikes!
Shove them up their asses
Make the lower level public use spaces like libraries, community centres, city-owned gyms (no more Equinoxi). If they can’t rent the rest (put limits and financial penalties for long-term unused commercial space) put the money into converting them to residential units (add a hole in the middle to look down onto the public space, turn building into a U-shape, something to give inside units windows).
Fill with tropical plants. A place to escape in the winter.
All jobs are sent overseas to countries like India, saw on the news government created 90k jobs, i want to see the stats where are these jobs created at
They could lower their prices
Convert them to housing. That makes the most sense.
Fucking HOUSING!!!!
Could always bribe Treasury Board to force people back into the offices more often.
Repurpose to rentals
lower rents, so more businesses can afford to exist in the spaces?
Like an indoor paintball field would be fun, arcades, pool halls, they've all evaporated because commercial rent is high, and unless you've selling organic seaweed scrub at $50/oz you can't survive.
Turn them into low income housing. ... I've seen rooming houses that are cramped and sketchy. But a floor of a building downtown, divided into private office rooms, with 2 gendered shared bathrooms and a kitchen, would be miles ahead of most of them.
I notice a surprising lack of laser tag these days....
Tear them all down and erect water coolers/copiers monuments in their place. If that doesn’t work open a dispensary or Tim Hortons.
Toronto like Hamilton has a huge homeless issue, just saying.
It's Canada the answer is plainly obvious; we sell our assets to Indians. That's our entire economic growth strategy if you hadn't noticed. Most likely they will figure out a way to do that through condos and profit. It will have a marginal effect on housing affordability for Canadians, but the workers get to stay remote. I just saved you the trouble of reading this article and waiting with bated breath to hear what happens down the road. We already know how this works.
Turn the space into apartments or some sort m of housing, got to be creative to get more needed housing..
Tear them down, and convert to mixed residential and commercial space, with the commercial space being used for things people actually need, like more family doctor's offices, and daycare. Make the units affordable housing.
Any job that can be done remotely should be done primarily remotely. The minority of people who prefer to work in office can work out arrangements with their manager to do so.
For affordable housing, I think there should be tiers. One for veterans and people on disability, one for people who work in low income jobs, etc. Because there are people on disability who get $1200 a month, but "affordable" housing is classified as $1500 a month and lower. Affordability should be determined based on costs of essentials and income.
*pssst* "It's free real estate"