Toronto has a housing crisis and a growing number of empty office buildings, so why don't we just turn them into apartments? On paper it sounds perfect. Cities in Europe have done it successfully, and even Calgary has started repurposing office stock into residential units. But in Toronto it's not that simple: outdated zoning laws, costly renovations, and the way these buildings are designed make conversions more trouble than they're worth. Office-to-housing conversions aren't the magic fix for Toronto's housing crisis that many people think they are.
The pandemic forced companies to adapt to remote work, and many realized they didn't need expensive downtown office space anymore. Shopify is a prime example: they were set to anchor The Well with seven floors (348,000 sq ft) but announced a permanent shift to remote work in 2023 and put the space up for sub-lease. Office vacancy rates in Toronto's downtown core hit 19% as of Q4 2024 according to Altus Group, compared to an all-time low of 2.5% in 2019 (over 7 times higher). Three major barriers make conversions nearly impossible in Toronto. First, zoning: Toronto has strict laws separating office from residential space, and applying for rezoning takes years. European cities have flexible mixed-use zoning that makes conversions way easier. Second, building design: most Toronto office towers have deep floor plates, meaning the central area is far from windows. Offices prioritize open floor plans and don't need natural light everywhere, but residential units do. Converting these spaces would leave large, dark interior sections that wouldn't be pleasant to live in, requiring developers to rework entire layouts, tear down sections, add internal courtyards, or completely redesign the structure. These are massive costs and logistical challenges. Third, cost and incentives: in Europe, governments provide grants and tax breaks to make conversions viable (Netherlands, Germany). Toronto has no significant financial support, so developers foot the bill for major renovations, and it's usually cheaper to tear down and build purpose-built residential from scratch. Many of Toronto's largest office towers are owned by institutional investors (Brookfield, Blackstone, Oxford, Cadillac Fairview owned entirely by Ontario Teachers' Pension Plan) who would rather hold onto properties and wait for office demand to return than sell at a loss.
Calgary shows what's possible with the right support: their $100 million incentive program has already converted over 1.5 million sq ft of office space into 1,400 residential units across 11 projects, with a goal of 6 million sq ft by 2031 (they're already 25% there). Calgary recognized early that office demand wasn't bouncing back and stepped in with financial support. Their buildings are also easier to convert because they're not as large as Toronto's towers. But Toronto's office market is fundamentally different. While Calgary sees entire buildings sitting empty, Toronto's 19% vacancy is spread out across different floors in multiple buildings. For example, 121 King West and 145 King have 25-50% vacancy but aren't fully empty, making full-scale conversions difficult without displacing existing tenants. Even around King and Bay, RBC North Tower, Scotia Plaza, and Commerce Court West are seeing around 25% vacancy: scattered, not concentrated. This makes large-scale conversions far more complicated than in Calgary. Without faster zoning approvals, government incentives like tax breaks or subsidies to offset high conversion costs, and more adaptable office designs in future developments, office-to-housing conversions simply won't happen at any meaningful scale in Toronto.
This isn't a magic fix for Toronto's housing crisis. Office conversions could be part of the solution, but they won't happen at the scale we're seeing in Calgary. Toronto's zoning and approval process moves far too slowly, and even if we sped that up, there are fundamental issues: deep floor plates make most offices unsuitable for residential use without massive renovations, and vacancies aren't concentrated in a few buildings where you could do clean conversions. They're scattered across the city in buildings that are still partially occupied. The financials don't add up either. Without government incentives, it's cheaper to tear down and build new, and institutional investors who own most of these towers aren't in a rush to sell at a loss. They'll wait for office demand to return, even if that means keeping buildings half-empty. Calgary made it work because they recognized the problem early, threw $100 million at it, and their buildings are smaller and easier to convert. Toronto doesn't have that kind of proactive thinking or financial commitment. Could conversions work here in theory? Sure, if we had faster zoning approvals, real incentives, and buildings designed with adaptability in mind. But right now, none of those conditions exist. So while it sounds appealing, office-to-housing conversions are at best a band-aid solution, and more realistically, not a real option at all for Toronto's housing crisis.
