Just yesterday, CTV News reported that the housing supply across Canada is quickly approaching crisis levels. CTV cites a report from Re/Max, using data from listings from 2012 to 2022 across Canada, that states seven out of eight cities saw a decline in listings. According to CTV, the causes of the dangerously low levels of supply are related to population growth, leading to cities stuck in cycles of success and then crash.&nbsp;Later in the CTV article, they list off some of the cities that have it the hardest. These includes the Halifax region, that suffered a decline in supply of 65.5% over the ten-year period. Ottawa-Gatineau’s supply decreased 41.9% over the ten-year average, with Montreal close behind at 40.16%. In the GTA, supply decreased 6.8%, concerning experts as the population in the area has increased by 21%. The only city with some increase was Hamilton-Burlington, but considering the population and migration numbers for the area, any growth would be considered negligible. On that note, experts suggest the main solution to this problem being (you guessed it!) building more residences.&nbsp;The Toronto Star describes a problem in housing supply and affordability: cities prioritize land for single-family detached homes. For example, they report that above 70% of Toronto land is zoned for single-family homes, in what the Toronto Star says is an attempt to “preserve neighbourhood character.” In other words, accommodating the growing population by building upwards through high-rise apartment buildings is rejected in place for one family dwellings. The Star also reports that the city has not been able to build as many units of any kind as are required. One possible solution to this rather unique problem lies in using the space we already have; commercial buildings.&nbsp;According to BlogTo, near the end of 2021, 16% of office space Canada-wide sits empty. This is the highest number of vacant offices since 1994. Toronto, in particular, has a vacancy rate of almost 14%. With people moving home and out of the office to work, why can’t office buildings, which would otherwise sit and rot, be used to accommodate the supply crisis for Toronto residents?&nbsp;Last year, CBC wrote an article talking about 6 million eligible square feet of Calgary’s vacant office space that would be perfect to turn into housing. In Calgary, the office vacancy rate is 32% prior to the city’s billion-dollar plan to convert the space to housing. Experts say that while ideal, this plan is not simple. First, a building’s location and characteristics, according to RenX, are important factors for its fitness as a home. For example, RenX says that “large commercial office floor plates (10,000 SF2 / 1000 SM2 or greater) result in lightless cores, outdated electrical, plumbing and HVAC systems – all contributing to a costly and exhaustive undertaking.” After all, the purpose of the building is shifting, so the physical features of the building must also reflect that. Historical buildings may pose some problems but RenX says they may benefit from preservation funding allotted to older neighbourhoods. RenX also states that social impact must be considered. Can people actually live there? This includes considering elevators/stairs, entrances/exits, lobbies, and more.Governments at all three levels can directly assist creating a win/ win. There are literally thousands of properties in Canada owned by governments that have been declared surplus. These properties are located right across Canada and in almost every area that needs housing support. In fact, they are often in highly desirable locations where public transit is available. In theory, governments should be expert in navigating the rezoning process and be able to bring the properties to market quickly and efficiently. By contributing to the solution of housing supply they also serve themselves. Maintaining surplus building space is very expensive and delivers no return. Beyond the profit from the sale of the buildings (enhanced by the rezoning), eliminating this expense frees up cash flow that can then be directed to more productive efforts. If the governments want to maintain ownership so that they have greater control over the social aims of the properties, they can easily elect that route.Overall, the housing crisis and current zoning policies put the city in a difficult spot. However, the solution may be right in front of us. With the sheer amount of neglected space around the city collecting dust, should future renters or home buyers have to suffer much longer?We have long said that the first step toward addressing the housing challenges in Canada begins with the creation of great, well-paying jobs. Managing demand, while an uncomfortable subject to discuss given its immigration implications, is as important as managing supply. Our woeful track record of building infrastructure that is timely and on budget has to dramatically improve. But being creative when repurposing our existing stock could be an import and till now underutilized part of the overall solution.&nbsp;

Affordable Housing Crisis: Can Commercial Spaces Help?

RIFO editorial on challenges in Canadian housing affordability and creative solutions, such as office space repurposing and converting into condos.

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