By Paul Vieira
Ottawa— In response to a significant housing shortage, Canada has announced plans to repurpose surplus office space into residential units. This move is prompted by the hybrid-work model that emerged during the pandemic, which offers an opportunity to reduce the demand for office space.
According to officials at a press conference in the capital, Jean-Yves Duclos, the country’s public-services minister responsible for the government’s real estate portfolio, stated, “We are working together to accelerate the process to identify further assets that have the potential to be repurposed into housing for Canadians.”
Canada currently oversees more than 600 million square feet of office space, with half of that located in the metropolitan Ottawa area. Over the next five years, more than half of the office-space leases are set to expire.
To address the housing affordability crisis, Canada Mortgage and Housing Corp., the national housing agency, estimates that the country will require over three million additional homes by 2030, surpassing current home-building projections.
However, converting office space into housing units presents its own set of challenges, as seen in U.S. cities. In 2020, developers managed to create only 3,575 apartment units through office conversions, accounting for less than 1% of all apartments constructed that year. Additionally, construction loans have become more expensive in recent months, making development lending less appealing to banks.
Recognizing the urgency to address the housing supply issue, Finance Minister Chrystia Freeland emphasized that Canada needs to build more homes at a faster pace to accommodate its growing population. Recent polling by Ottawa-based Abacus Data revealed that 45% of respondents feel that the Liberal government has exacerbated the housing problem, partly due to high immigration levels leading to unprecedented population growth.