Canada’s downtown cores aren’t quite ghost towns, but their offices are eerily quiet.
Driving the news: Canada’s downtown office vacancy rate has reached 19%—almost double compared with before the pandemic. In Toronto and Vancouver, vacancy rates have jumped from a little over 4% in 2019 to nationwide highs of 17.9% and 14.8%, respectively.
Why it’s happening: Remote work, hybrid work, flexible work—you name it. While some employers are starting to nudge their staff back into the office, some researchers think the overall trend will persist, shaking out to about 30% of working hours performed at home.
- Toronto, Vancouver, Montréal, and Calgary have been hit particularly hard thanks to a high prevalence of office jobs that could easily pivot to remote setups.
Why it matters: Canada’s office evacuations are changing the feel of urban life for city dwellers, with foot traffic way down and restaurants and other businesses that once catered to urban workers being forced to shutter. They’re also contributing to a “donut effect” in which real estate prices drop in urban centers and rise in the suburbs that ring them.
- One study found that Ottawa, Toronto, and Vancouver all saw a foot traffic decline of 45-48% between January 2020 and last September.
What’s next: University of Toronto professor Karen Chapple says cities can refill offices that once housed remote-ready desk jockeys with organizations that involve physically present staff, such as those in arts and education. Some developers are also trying to lure workers back downtown with nicer amenities, aiming to turn the city into a British-style donut instead.—AP