Toronto developers keen to convert offices to housing say city rules are a barrier

Real estate developers say regulations are holding back efforts to convert empty Toronto office buildings into much-needed housing – but some candidates in the ongoing mayoral election, as well as the city itself, appear open to discussing policy changes.

The idea of converting office spaces into residential units picked up steam since the pandemic-induced shift to hybrid work. Recent reports suggest office occupancy rates in Canada may not bounce back to pre-2020 levels given the rise of hybrid work, and RE/MAX Canada has suggested cities take a hard look at converting offices into housing.

Some cities like Calgary are moving ahead with turning empty offices into apartments. But as it stands, office space in downtown Toronto neighbourhoods must be replaced if it is removed, creating a major barrier for such projects to move ahead in Canada’s largest city.

Jeff Hull, president of Hullmark, a real estate and development company, said his firm is keen to move into office-to-residential conversions. He considers it a way to boost affordable housing supply in a city that desperately needs it, and sees the appeal of sustainability arguments for the practice – that it’s more climate-friendly from an emissions point of view to reuse a building, rather than tear it down and construct a new one.