Downtown | Montreal wants to facilitate the conversion of offices into housing

As the normalization of teleworking leaves many offices deserted, the City of Montreal wants to facilitate the conversion of downtown towers into apartments, to help alleviate the housing crisis.

“The city center is changing, there are a lot of vacant premises. The high-quality buildings will remain offices, but for the category C buildings, which need a little love, there is potential for transformation for a mixed use, with commercial and housing,” explains Luc Rabouin, responsible for economic development on the executive committee, in an interview on the sidelines of the study of the municipal budget by the Commission on Finance and Administration.

According to data from the City of Montreal, the office vacancy rate in the business district is currently 16%, rising steadily since 2020. Altus Group predicts that it could reach 29% by 2027, since working in hybrid mode becomes the norm.

In comparison, the housing vacancy rate in Montreal is 3%. It is even lower for affordable housing, but higher for apartments with more expensive rents.

What can the City do about this? It could change its regulations to facilitate the transformation of offices into apartments, and elected municipal officials are examining the question, reveals Mr. Rabouin. Currently, the zoning of certain lands prevents residential use.

“We are in the process of revising the urban plan. We are working on a downtown 2030 strategy, there have been consultations on this subject, but also on the City’s vision. Over the next year and a half, we will have more specific orientations on what we can do and what we must do,” he says, adding that it will probably be a few years before such conversions take place. materialize.

The City itself could eventually buy office buildings in anticipation of their transformation into social or affordable housing, but these conversions are more likely to be carried out by private developers, due to the high cost of properties.

The installation of more residents in the city center means that the urban planning of the sector will have to be reviewed. “As soon as there is residential, it takes schools, grocery stores, green spaces,” recalls Luc Rabouin.

Not Place Ville Marie

The president of the Board of Trade of Metropolitan Montreal, Michel Leblanc, is pleased to see that the municipal administration wants to offer more flexibility to owners of office towers, but he does not expect there to be a huge wave of conversions.

“We’re not talking about prestigious buildings like Place Ville Marie,” he points out. Rather, it concerns buildings of a certain age that need investment. The owners will wonder if they renovate so that it remains offices or if they transform them into housing. »

Demand remains strong for Class A buildings, he adds. Some companies are reducing the size of their offices, but recommending higher quality buildings.

Mr. Leblanc points out that it is complex and expensive to transform offices into residences. He cites, for example, the location of plumbing for kitchens and bathrooms, soundproofing, height of ceilings, elevators, etc.

Such investments are not made in a few months. But by knowing the City’s willingness to allow conversions, office owners will be able to begin their thinking and analysis about it, he says.

He notes that local business growth remains strong and that employers plan to hire, even if they are limited by the labor shortage. But the next few years will show if teleworking stabilizes, and how many days a week employees will do their jobs remotely.

In her budget tabled in the spring of 2021, Canada’s Finance Minister, Chrystia Freeland, announced a $300 million program to support the conversion into affordable housing of empty office space that has appeared in downtown areas across the country since the start of the crisis. pandemic.

The government has indicated that this program is part of a new approach, the objective of which is to convert surplus commercial premises into 800 rental units, to meet the strong demand.