The Ontario government has rejected a bill to convert vacant commercial offices into residential housing. The bill was touted as a solution to the housing shortage problem, but was scrapped due to opposition from the government, which was concerned about unexpected side effects.
Bill 201, the Commercial to Residential Conversion Act 2024 (Bill 201), introduced by Ontario Liberal MP Karen McCrimmon in May, aims to shorten the process of converting offices into apartments by about two years. “At a time when there is a dire need for residential housing and commercial building vacancy rates are high, there are many obstacles to converting commercial buildings to residential,” McCrimmon said.
She also explained that the bill was developed in consultation with urban planning experts, and that they focused on improving regulations that were major obstacles to the residential conversion process. However, the Ontario government decided to reject the bill, saying that it could have unexpected effects on existing regulations. “Our government is reducing unnecessary regulations on housing construction,” a government spokesperson said, adding that “we are conducting a further review of the conversion of large commercial office buildings to residential or mixed-use.”
McCrimmon expressed disappointment that the Ford government did not clearly state its reasons for opposing the bill. “This bill was a simple change that would have accelerated the conversion of commercial to residential,” she said. “The government’s rejection of this bill is a missed opportunity to make a real difference in solving the housing problem.”
According to McCrimmon, the bill was supported by the Ontario Real Estate Association and the Ontario Society of Professional Engineers. According to CBRE ’s 2024 Q3 Canadian Office Real Estate Market Report, the national office vacancy rate has increased to 18.6 per cent, with Toronto recording an 18.2 per cent vacancy rate.
As a result, the city of Toronto is conducting a study to examine the possibility of converting office space and analyse the benefits and drawbacks of conversion. In July, the City of Toronto’s Planning and Housing Committee approved the direction of the office conversion policy and requested further analysis and engagement to develop final policy recommendations.
“The loss of office space can have permanent consequences that cannot be reversed even if market conditions change,” said City of Toronto. “Toronto is home to the largest concentration of office employment and corporate headquarters in Canada, and careful analysis is needed when making policy decisions.” The city is currently conducting an office space needs study that includes an office market analysis to assess the benefits and risks of office conversion and develop policy options that balance short- and long-term needs.