Converting Offices to Affordable Housing Could Boost Transit, Cut Emissions

From cities like Ottawa and Calgary to a multi-agency initiative in the United States, the work-from-home trend combined with a deep affordable housing crisis has policy-makers looking at how to convert empty office space into apartments.

As a side effect, the shift could help bring down tailpipe emissions and other climate pollution by shortening or eliminating commutes and locating more housing closer to transit.

In Ottawa, city staff are considering lower application fees, reduced administrative paperwork, and more flexible zoning to help clear the way for office conversions, CBC reports. Faced with rising office vacancy rates and a tight rental housing market, the city has been looking at a streamlined conversion process as one part of a future application to the federal government’s C$4-billion Housing Accelerator Fund.

Zoning is emerging as a key obstacle. “Residential and office buildings don’t always have the same standards on things like setbacks from other properties, so developers often have to head to committees and seek amendments when they want to change from one to the other,” CBC explains. To minimize that costly, time-consuming process, “staff are recommending automatic exemptions in cases where conversion projects don’t add floors or additions. They also want to relax requirements for amenities like patios, gardens, or balconies.”

With those general targets in mind, office towers originally designed in the brutalist architectural tradition might be good candidates for conversion, University of Ottawa post-doctoral fellow Sarah Gelbard told CBC this week, over TV images showing the current National Defence Headquarters building downtown.

“A lot of them are approaching the point where they need a lot of rehabilitation, and so it does become a point of either being rehabilitated back to their original use, or is it an opportunity to reimagine what these buildings could be?” Gelbard said. “And certainly, as we’re in a housing crisis, the conversation does get into whether or not they’re better served as housing.”

CBC says a downtown revitalization program in Calgary that offers up to $15 million per conversion was one of the inspirations for the Ottawa plan. “Calgary’s office vacancy rate is much higher, at more than 30%,” the news story states. “Ottawa’s is somewhere between 12.5 and 15%, depending on the source.” But that’s still well above pre-pandemic levels, and the Canada Mortgage and Housing Corporation places the city’s very low rental vacancy rate at just over 2%.

In the U.S., the Biden administration is bringing together four federal agencies and putting tens of billions of dollars on the table to get more empty offices converted into affordable housing, ABC News writes. “This presents an area of opportunity to both increase housing supply while revitalizing main streets. It’s a win-win,” said National Economic Council Director Lael Brainard.

ABC says the U.S. Department of Transportation, the Department of Housing and Urban Development, the General Services Administration, and the Office of Management and Budget are working on a suite of measures “designed to specifically encourage the creation of new affordable housing units near transportation hubs like bus terminals and subway stations.” Transportation Secretary Pete Buttigieg said the government will supply “over US$35 billion in lending capacity”, in the form of below-market rate loans for new housing construction and office conversions near transportation hubs.

“These downtowns and central business districts… are already designed and oriented around public transit,” Buttigieg said. “Our intention is to make the most of this opportunity to add more housing near transit in ways that not only reduce the cost of housing but also reduce the cost of transportation.”

Despite continuing efforts since the pandemic to get office workers back to their (non-remote) desks, ABC says work from home “may actually be continuing even after the end of the pandemic, as businesses are waiting until long-term leases expire and then drastically shrinking the amount of floor space they occupy.” That has many U.S. cities offering tax incentives for conversion projects to help cover the “often-prohibitive costs” of turning an office space into a home.