Transforming Office Spaces into Homes: London's Bold Move to Address Housing Crunch

In a strategic effort to combat increasing office vacancies and a pressing housing supply shortage, the city of London, Ontario, is pioneering an innovative solution: converting office buildings into residential units. This initiative, announced by Mayor Josh Morgan, leverages the federal government's Housing Accelerator Fund to breathe new life into the city's core area.

Tackling Two Challenges with One Solution

London is facing a dual dilemma: rising office vacancies and a growing need for housing. To address this, Mayor Morgan announced significant incentives for office-to-residential conversions during the annual State of the City speech. This plan involves utilizing $74M from the federal Housing Accelerator Fund, offering $20,000 for each one-bedroom and $28,000 for each two-bedroom unit created through these conversions.

Addressing the Core Area's Vacancy Crisis

London’s office vacancy rate has climbed by 6% from Q3 2019 to Q3 2022, reaching 24.6% — one of the highest in Canada. The city identified a structural market issue, particularly in Class B and Class C office buildings, which constitute about 75% of the vacant office space. These buildings are also the most commonly converted to residential units.

A Comprehensive Strategy for Urban Revitalization

The city's Core Area Land and Building Vacancy Reduction Strategy, underway since May, outlines various measures, including the office conversions incentive program. Additional aspects of the strategy include improving air quality in conversions and a grant program to cover application fees for such projects.

Joining a Growing Trend Across Canada

With this move, London joins other Canadian cities like Calgary, Edmonton, Toronto, and potentially Ottawa, in introducing incentives for office space conversions. This growing trend reflects a shift towards more flexible urban development strategies, repurposing existing structures to meet housing demands.

Beyond Office Conversions: Broader Urban Development Initiatives

Mayor Morgan’s address also highlighted other initiatives, such as encouraging the transformation of downtown surface parking lots into housing and a collaborative project to convert a long-term care facility into supportive housing for the homeless.

London, Ontario's innovative approach to transforming office spaces into residential units represents a forward-thinking solution to urban housing challenges. This initiative not only addresses the immediate need for more housing but also contributes to the revitalization of the city's core areas. As cities across Canada adopt similar strategies, we see a new era of urban development taking shape, one that is adaptive, sustainable, and responsive to community needs.