City wants to make it easier to convert offices to housing

Ottawa's office vacancy rate has ballooned while its rental housing market remains tight, and city staff are looking to streamline building conversions to solve both problems at once.

In a report to council's planning and housing committee, they're pitching ideas to save developers time and money on projects to transform office towers into apartments.

That includes cutting fees, which can run as high as $54,015 for some steps in the application process. Staff are also recommending efforts to save paperwork, such as waiving transportation impact assessments for most conversions.

The report also recommends more flexible zoning rules. Residential and office buildings don't always have the same standards on things like setbacks from other properties, so developers often have to head to committees and seek amendments when they want to change from one to the other.

That can be a costly, time-consuming process. So staff are recommending automatic exemptions in cases where conversion projects don't add floors or additions. They also want to relax requirements for amenities like patios, gardens or balconies.

City staff hope the ideas will help Ottawa meet its provincial targets to add 151,000 housing units by 2031. A plan to streamline conversions was initially promised as part of an action plan Ottawa submitted to apply for its share of the $4 billion federal Housing Accelerator Fund.

The report doesn't make any explicit recommendations to invest city funds in private conversions.

Staff looked at a Calgary incentive that provides up to $15 million to conversion projects, as part of an effort to revitalize that city's downtown. City of Ottawa staff say they can explore incentives further should councillors wish.

Calgary's office vacancy rate is much higher, at more than 30 per cent. Ottawa's is somewhere between 12.5 and 15 per cent, depending on the source. That's still well above where it was before the pandemic.

Meanwhile, the vacancy rate for residential rentals is barely over two per cent in Ottawa, according to the Canada Mortgage and Housing Corporation.

The federal government is looking to divest itself of potentially millions of square feet in floor space in the National Capital Region, as it targets a 50 per cent reduction in its office holdings. It has already listed Ottawa properties it's hoping to sell, including the two L'Esplanade Laurier towers.