Toronto councillor wants city staff to study office conversions

BNNBloomberg.ca
Oct. 20, 2023
Daniel Johnson

A Toronto city councillor has put forward a motion asking city staff to explore possible ways to convert office space into residential housing.

Brad Bradford introduced the motion at the city’s Planning and Housing Committee on Thursday. It asked staff to look at office conversion possibilities and consider what regulatory changes might be needed to make them happen.

Bradford’s motion highlighted that the city needs to remove barriers that impede the creation of new housing “at every opportunity.”

“I don't think, given the housing challenges that are in front of us today, we as a council or local government should be writing off any opportunities to deliver more housing supply in a market that desperately needs it,” Bradford told BNNBloomberg.ca in a Thursday interview.

Office conversions could be “one of many tools we need to put in our housing tool kit,” Bradford said, though they would not be an all-encompassing solution.

He noted that not all office floorplates can be easily converted into residential space, but argued that there is a need to remove barriers where possible.

In his motion, Bradford said the process of converting of older office buildings into housing units where possible should be simplified.

“This will require that we ensure relief from guidelines and other rules that make it difficult to convert office floor plates into housing,” his motion read. “This will also mean modernizing office replacement policies to unlock new housing supply and identify opportunities to secure affordable housing.”

Specifically, the study would look at potential zoning, regulatory or policy relief that might be needed to allow for economically viable office conversions.

The motion said it would also evaluate the possibility of “requiring the provision of affordable housing” instead of replacing office space, as is currently required when office space is removed in downtown Toronto neighbourhoods.

The motion asked that city staff report back to the committee with recommendations in the third quarter of 2024 “as part of the ongoing Office Space Needs Study.”

Bradford’s motion also highlighted that as of September 2023, downtown core occupancy rates were just 50 per cent of pre-pandemic levels. While some workplaces mandate a return to office others are continuing hybrid work policies, the motion notice.

“Given the changing nature of work and the ongoing housing crisis, it is time to revaluate the need for office space,” Bradford’s motion read.

City council has not yet voted on the motion.

Thursday’s motion stems from a letter to the council from Bradford earlier this month. The item will be considered by the Planning and Housing Committee later this month and will be subsequently considered by the City Council in November.

Veronica Green, vice president of Slate Asset Management, said in a statement to BNNBloomberg.ca that the city should consider the current and future supply and demand dynamics of office market conditions.

“Softening or dismantling” the language in Toronto’s official plans as it rates to office or non-residential space would be a step forward, she said.

“This will let the market react to current conditions to make effective decisions about where and how much office space Toronto needs,” Green said Thursday.

“Allowing office to residential conversions is one small step to support Toronto's housing supply problem; this can also support the city’s path to net zero by encouraging adaptive reuse of existing assets.”

OFFICE SPACE DEMAND

Bradford told BNNBloomberg.ca that within Toronto’s office market, the market for Class A space remains strong, because companies have been moving into those buildings from Class B and C office spaces after the COVID-19 pandemic.

Class A buildings are often new buildings in locations considered more desirable.

This trend presents a challenge, according to Bradford, who argued that higher vacancies in Class B and C buildings means as those buildings sit vacant, they are “further and further diminished” over time.

“From a policy perspective, we need to ask the question, do our office policies around conversion still make sense in today's context?” he said.

“If we could forecast five or 10 years from now, do we think we are going to have a huge sort of shortage of office space? Or do we think we're going to have a huge shortage of housing?”

Bradford said that the vast majority of the time, the city is not willing to engage in discussions around the conversion of office space, and as a result, the city rarely sees applications of that type come forth.

In June, Bradford ran as a mayoral candidate with the promise of changing zoning rules to simplify the process of converting offices into residential units.

At the time, he said he would eliminate the rule dictating office space be replaced on a foot-for-foot basis, if the development includes 20 per cent affordable housing.

Bradford ultimately lost the election to current Toronto Mayor Olivia Chow, but he has remained on city council.