As business districts continue to feel vaguely reminiscent of a mining town after a gold rush, Canada’s third-largest city is stepping up to show the world it’s not all doom and gloom.
Calgary has confirmed the first three downtown towers that will be converted into living spaces as the city aims to address record-high vacancy rates (that continue to rise because of the demand for higher quality buildings and remote and hybrid schemes).
High supply of office space with low demand + the world’s most heated housing market = developers absolutely buzzing to transform those assets into residential real estate.
- Under a new incentive program, 414,000 square feet of office space will be replaced with 401 (mostly high-end) residential units; a plan put into motion as vacancy rates hit ~32%—double that of Detroit’s when the city declared bankruptcy.
What happened: Office occupancy was trending downwards in many markets since ~2015, but it took a global pandemic to eliminate confidence in a full recovery, leaving architecture and design firms working with cities to identify the top buildings for conversions.
- “Cities like Calgary have got ahead of [any barriers] by completely removing the zoning bureaucracy for these projects and, going even further, actively funding them with grants,” Steven Paynter, Principal at Gensler’s Toronto told The Peak.
Boston and New York are following suit by reducing zoning hurdles, and in Ottawa, the federal government has committed $600 million toward office conversions. In Toronto, where zoning rules still prevent these upgrades, Gensler is exploring residential additions on top of office buildings.
Why it matters: With Canadian immigration expected to top 1.2 million over the next three years, projects that increase downtown populations (and spur economic activity) seem like a good thing on the surface—whether or not those projects will be affordable is yet to be seen.