Robert Smythe
The Canadian Urban Institute (CUI) has just released a timely report entitled “The Case for Conversions: Understanding opportunities for conversions of office space to housing in Canada,” with particular relevance to Ottawa’s vacant downtown offices.
The report’s authors include prominent university departments, think tanks, and private sector consultants from across the country. The study was funded by CMHC as a National Housing Strategy “Solutions Lab.”
Its purpose was “to understand the opportunity that vacant and under-utilized office space presents for making downtown districts across Canada vibrant, equitable and sustainable”, the CUI says in its introduction.
Office-to-residential (and other uses) conversion offers the potential to play a key role in this revitalization, it adds.
What do we do with empty office space?
So the central question is: What should we do with the millions of square feet of central office space sitting empty across Canada? This dilemma is a result of hybrid work patterns that have become entrenched, and downtown recoveries stalled at a fraction of their pre-pandemic levels of activity.
It was deepened by the growing stock of worn-out and aging office towers nearing the end of their lifespan, which was already well underway before the COVID-19 emergency struck.
Canada is far behind the US and Europe
The CUI study warns that “Canada has lagged in re-imaging and repurposing vacant and aging office buildings. In the time [since 2015] that Ottawa created 500 residential units through conversions, for example, American and European cities created thousands.”
One stumbling block: many Canadian municipalities have not yet streamlined the internal policies and procedures necessary to make these office-to-housing conversions easier and more appealing.
Six Canadian cities examined
In designing this inquiry into conversions, the researchers looked at six cities: Victoria, Regina, Winnipeg, Ottawa, Moncton, and Halifax. This presented a wide range of market and regional contexts, and sizes from large to small.
The team established a vocabulary of “best practices” and a building evaluation framework for cities to follow. Based on these six cities’ development scenarios, a toolkit of resources was created for each site-specific situation, which they think could be scaled up to fit other cities across Canada.
Is a building suitable for conversion?
There are five major factors in evaluating a building’s candidacy for these conversions. They are fairly self-evident and were scored and then ranked in order of importance:
Floor plate (30 percent): They can’t be too big. Window-to-core distances should be from 24 to 50 feet, with 40 feet being ideal. One elevator per 100 units is considered acceptable.
Building form (30 percent): Regular and rectangular floor plates work best for circulation, unit layouts, and points of egress. The more complicated a building’s shape, the trickier the conversion.
Servicing (20 percent): Conversion possibilities increase with the presence of a loading area, parking, and a central mechanical room to facilitate the complex job of threading new plumbing stacks and HVAC rises through buildings that weren’t designed for residential units.
Site context (10 percent): Is the building located in a walkable area that is well serviced by public transit? Do the units have direct access to natural light? How are the surrounding buildings and what is their impact on shadowing and view corridors?
Envelope (10 percent): Peeling off and replacing the building’s outer walls does not preclude conversion, but it does increase costs and extends construction time. Buildings with curtain walls (glass and metal panels hung from the structural frame) are less desirable than those with operable window openings in solid walls.
Of course there are also many fiscal and regulatory constraints. The report examines the risk-benefit climate for these conversions in cities like New York and Rotterdam, where they have been very successful.
Make conversion projects a priority
In each case, these cities had to make office-to-residential conversion projects a well-defined public priority by navigating what will be familiar to Canadians – multiple levels of government and agencies, skepticism in the private real estate market, and trying to garner support from citizens and businesses alike.
Tax incentives and special funding instruments were frequently required to give these conversion programs a kickstart. They determined that a hot housing market coupled with a high demand for apartment units provided the most opportunity for conversions.
Ottawa has most potential for conversions
Interestingly for its modest record of successful office-to-residential conversions, Ottawa ranked first in this sampling of six cities. It was noted that, “Based on the modelling Ottawa has the most potential for conversions.”
This was largely due to the city’s relatively large size and good inventory of mid-century buildings suitable for conversion. Five recent examples include both student and supportive housing, which up until now has been rare.
The study points out that “The presence of federal buildings and anticipated office consolidation and disposal by the federal government gives Ottawa a unique position to address housing need, bring more residents downtown, and address explicit climate goals.”
This last point is important because it recognizes that recycling these buildings can retain much of the “embodied energy” that is contained within them, rather than consigning this material to the landfill.
Building-specific case studies from each of the cities were briefly detailed. For Ottawa, “The Slayte” at 473 Albert Street was represented as a commendable example of conversion. Readers of The BUZZ will recall that this was briefly mentioned in the Skyline column of April 2022.
This development, which took a cautionary three years to complete, involved the office-to-residential transformation by the CLV Group of the decidedly rectangular, but definitely frowzy, Trebla Building into 158 mixed suites in an amenities-rich building, with a minimal intervention on the existing structure.
Expensive, not affordable
Unfortunately, as the report points out, in Canada the office-to-residential movement hasn’t been successful at delivering many affordable apartments.
If this is to happen, the not-for-profit sector must be encouraged to join in, because rents for almost all of the converted units are set at the absolute peak of market rates – which is high.
Policy changes required
The key findings of this study suggest that high-level government housing policy changes, which always takes an interminable length of time to enact, are required. Each of these projects will encounter its own difficulties, although hopefully, with practice, the design and construction industry can develop more efficiency in bringing these conversions to the market.
A recent article in The Wall Street Journal reported that, in the U.S., property owners are beginning to unload their troubled office buildings at bargain basement prices. Should this trend reach Canada, there may be further inducements for developers to pursue conversions.
The future in Ottawa
Right now in Centretown, there is only one small conversion project underway. It’s on Cooper Street somewhat removed from the downtown office core. According to consultants hired for the study, there is the potential for an additional 1,900 to 4,200 new residential units that could be wrung out of Ottawa’s surplus office buildings.
Although this may sound like a lot, conversions can never be the total long-term solution to the current housing shortage. They could be an important building block in meeting a percentage of our housing needs – with the fringe side-effect of re-animating a still-moribund city centre.