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Toronto looking at creative solution to the vast amounts of vacant office space in city

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Toronto’s vacant office space problem has become unignorable enough for the City to really start considering options for how the glut of square footage essentially collecting dust can be better used — like, as some have suggested, for new housing.

Downtown towers have been having some serious trouble leasing out floors since the COVID era, with a number of big firms cutting their footprints in the city and hybrid-remote work still preferred by many residents.

Now, with a whopping 171.8 million square feet sitting empty (as per the last report from commercial real estate services group CBRE), the City is asking for the public’s opinion on what to do next.

“The City is undertaking a study to analyze current office market conditions, understand the benefits and risks of converting office space to alternative uses, and explore policy options that would balance office needs in the short-term and long-term,” a page on the Toronto website dedicated to a study of vacant commercial real estate reads.

“Several municipalities [have] introduced interventions, including financial support for businesses, cultural events, promotion and marketing, infrastructure investments, and enabling office-to-housing conversions,” it continues, adding that Toronto is also in the midst of “a prolonged housing crisis that has elevated pressures for residential intensification.”

While offering office conversions as one potential option among many different solutions, the City notes that this costly move presents a “permanent outcome that cannot be reversed later if market conditions change,” which could be problematic to Toronto’s status as a national hub for all sorts of brands and industries.

So, a comprehensive analysis will need to take place, currently in second phase, with a community consultation meeting on the issue planned for May 15.

Between now and the summer, City staff will work on forecasting future office space needs under different types of economic conditions, on looking further into what would be required (and what would be gained and lost) in converting office space for both alternative residential and non-residential uses, and create potential policies and plans for adaptive reuse.

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