CityTalk: How Might Office Conversions Revitalize the Post-Pandemic City?

Click here to read CUI’s full report The Case for Conversions.

5 Key

A roundup of the most compelling ideas, themes and quotes from this candid conversation

1. Making the case for conversions

Pandemic-induced shifts to remote and hybrid work combined with high office vacancies and an office building stock reaching obsolescence present an opportunity to rethink the role of Canada’s downtowns and central business districts. CUI’s eleven-month inquiry into downtown office to residential conversions resulted in an analysis of the types of office buildings suitable for adaptive reuse, the market conditions that make them feasible, the policy and regulatory levers available to support them, and the scale of the opportunity across the country. See our report, The Case for Conversions, which focuses on the downtowns of six case cities: Victoria, Regina, Winnipeg, Ottawa, Moncton, and Halifax.

2. Identifying the right building candidates.

Steven Paynter and the team at Gensler Architecture and Design use a data-rich approach to identify “Goldilocks” buildings. After analyzing over 800 buildings, Steven says, “about 30 percent of the buildings we’ve studied make great conversion candidates that lay out beautifully for residential units that really can add a lot of diversity to your mix of use to a downtown.” CUI partnered with Gensler to analyze office buildings in the downtowns of the six case cities and identify suitable candidates for conversion.

3. More vibrant downtowns.

Melissa Román Burch of the New York City Economic Development Corporation believes that conversions in tandem with public realm improvements will strengthen monocultural business districts by helping them evolve into 24/7 social districts where you can live, work, learn, and play. According to Steven Paynter, by providing opportunities for people to live near their jobs you can reduce commuting times and the strain on public transit, as well as reuse parts of the downtown and existing infrastructure to accommodate activity beyond the 9 to 5 work week.

4. “Cities need to think about how to create flexible built environments”.

Tracey Hadden Loh, Fellow at the Brooking Institute, says that we must enhance our ability to respond, “in a world where the pace of change is faster than ever, and crises are piling up.” Downtown conversions are just one piece of a larger policy conversation around being able to do more with the assets we already have in all types of communities. We must also understand the role policies around office to residential conversion will have in either reducing or increasing inequality.

5. Proper use of financial incentives

There was agreement among the panel that financial incentives shouldn’t be used to buy office buildings. According to Melissa and Steven, the role of public money in office conversions should be to catalyze private investment or create momentum that wouldn’t be achieved without intervention. Joe Nickerson, partner at Sidewalk Real Estate Development in Halifax, says, “You could give me $5 million today. I prefer the property tax credit that I can model over time that impacts the value of my building. The reality is that if you throw those carrots out with less strings attached … people will be creative, and they’ll find opportunities and they’ll act faster.”

Full Panel

Note to readers: This video session was transcribed using auto-transcribing software.  Questions or concerns with the transcription can be directed to with “transcription” in the subject line.

Mary Rowe [00:04:21] Hi, everybody. It’s Mary Rowe from the Canadian Urban Institute. Really delighted to welcome you back to CityTalk. The platform that we’ve been using since almost the second month in and COVID to talk about what’s working, what’s not and what’s next in cities. Appreciating that we have hundreds and hundreds of people that listen across Canada, in the United States and in Europe, even to help us sort of puzzle through this, how have we been learning and what we can glean from this extraordinary period, this three-year period that we’ve been through and that we now continue now to think about what’s next for urban environments. So, we’re very pleased to have you on here. I happen to be in Toronto today. The Urban Institute is a national thing, so we’re in various locations across the country and I travel quite a bit. But today I’m here in Toronto with the Toronto production team, which is the traditional territory of a number of first nations, including the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee and the Wendat Peoples. And as we know, Canada is home to many First Nations, Inuit and Métis people.  It was interesting over the weekend watching all the coronation activity and hearing about people’s coming to terms with the legacies of colonialism at the same time as trying to understand whether or not there are aspects of that tradition that we can embrace. And then what do we have to actually do to fix the components that aren’t, have not been working and a rich discourse on that. And we encourage everyone to CUI and CUI community to continue to float ideas to us about programs and topics you’d like to see addressed here on CityTalk.

Mary Rowe [00:05:46] Because the legacies of exclusion in urban life are many. And the question is, as we come out of this extraordinarily challenged time, are we going to be able to move forward in a more collaborative, just and fair way? So we appreciate the conversation and all the different forms it takes. We have a chat here. Many of you know, and we encourage people to use the chat. As you know, we publish the chat. So as in Vegas, it’s not like as in Vegas. Whatever you put up on the chat will stay on that chat and it’ll be posted online with this video. So keep that in mind. But we always encourage people to be really frank and put out all the concerns they’ve got or questions they’ve got and also leads and resources and suggestions. I see a number of people are coming in and telling us where they’re signing in from. That’s   great too, so that our presenters have an appreciation for where people are situated and also where in this discourse you are …    You find yourself. So we’re here this morning, or this afternoon or early in the morning, depending on where you are. To talk about this, the case for conversions and whether or not or to what extent do we see the transformation of downtown core central business districts into different kinds of more mixed uses? What is the potential for that and what do we see that as … or how do we see that as a contributor to downtown revitalization? We’ve always been very careful to not position this as an answer to the housing crisis. There’s no magic bullet, as everybody knows. But the question is whether or not this is a useful tool and also how can it contribute, or not, to the kind of vibrancy and the kind of realization of complete neighborhoods that we all know is important to downtown life.

Mary Rowe [00:07:22] 18 months ago, we produced an initial report called “The Case for the Core”. Just happened to have that, too. So if you haven’t had a chance to look at these things, have another look because they have some interesting … they actually have ideas that last. So “The Case for the Core” and then now “The case for conversions. And joining us is a group from across the country and also some really interesting folks to the south. Coming to us from the U.S. So we appreciate having diverse opinions on this. So I’m going to ask first Jen Barrett, our managing director, to just run you through briefly the high points of that Case for Conversions report, and then I’ll invite our guests to come on as well. So go over to Jen. You’re looking good.

Jennifer Barrett [00:08:06] Great. Hello? Can you see me? [You look great] Good morning, everyone. Good afternoon. Thank you for joining us. I’ll spend just a few minutes, as Mary has mentioned, to take you through The Case for Convergence, our report which was released in early April. So the project was an 11-month inquiry to look into office conversions that resulted in an analysis of the type of buildings that lend themselves to conversions. The scale of the opportunity across Canada, the policy or regulatory levers available to support conversions and the market conditions in cities that might make them more viable or more feasible. We looked specifically and in detail at six Canadian cities to understand the opportunity, but use this to demonstrate the scale of the opportunity in large cities across Canada. I’ll take you through a number of our key findings. The first one reflects on Mary’s earlier points, which is that many of the buildings that we evaluated working with Gensler Architecture and Design, who are on the call today are buildings that are reaching obsolescence.

Jennifer Barrett [00:09:10] And this in combination with the fact that COVID and a move towards more hybrid and work from home patterns has provided an opportunity for us to rethink what our downtowns are made of and how our downtowns could be more resilient. So conversions really offer an opportunity for intensification which builds on existing infrastructure and amenities that are in place. It provides an opportunity to preserve the in-body energy in buildings that are already built, but also to improve energy performance in aging buildings that are in need of upgrades or retrofits. It can support business or talent retention and population growth in our downtown, as well as climate and economic resilience. And it also provides us an opportunity to reconsider single use buildings and land use that would limit the kind of adaptability that we see a need for currently. Working with Gensler and Associates, we were able to model the inventory of buildings in the six cities we looked at, and what we did through this analysis was created five different typologies. And these are listed here from left to right in terms of the feasibility of conversions, understanding that the characteristics of each building are unique. And so these ranged from what we call brutalist or mid-century high-rise buildings that you see in many Canadian downtowns, several steel frame buildings, as well as low rise buildings, which are prevalent in more smaller, mid-sized cities, and then heritage buildings, which are buildings that have been converted either from light manufacturing or office use into residential uses in previous decades. We also found that policy can make a difference even when the market conditions are strong. And by strong market conditions I mean a high rate of office vacancy as well as a high need for either acute or just general housing supply.

Jennifer Barrett [00:10:50] And this means that by evaluating the market conditions, policy and program responses can be tailored to those. Those with softer market conditions would require more policy intervention. It’s important to target buildings that have the right characteristics, not only the physical structures of the buildings themselves, but also the location and that be that they’re close to the kind of amenities and services needed by residents, but also that they’re far enough from incompatible uses. Conversions, we found, can shorten the timelines for housing creation and with adequate funding can provide an opportunity for the creation of some affordable or supportive housing. We also found that zoning that supports conversions as of right without zoning or variances needed provides a strong enabling conditions for conversions to happen. And we also found that deterrents to demolition are important in order to preserve the embodied energy in the buildings that exist. And then finally, we recognize that policies must also ensure that we maintain a healthy office vacancy rate, that we do not want to end up in a situation of overcorrection where we lose necessary office space in our downtowns. Working with our evaluation, we were able to scale up the number of units, housing units that would be possible in cities across Canada. With the six cities we first evaluated, we found an opportunity for 4000 to 8000 units. And then if we add five large cities, including Calgary, Vancouver, Edmonton, Montreal and Toronto, that grows to between 18 and 22,000 units total. And finally, we propose that there’s a value proposition for a diversity of stakeholders. This means for all levels of government there is an opportunity to realize policy goals, whether this be housing or climate resilience, as well as downtown intensification. For the private sector, including developers, building owners or financial institutions, convergence can provide an opportunity for a diversification of a portfolio or for a new type of portfolio that provides a mixed use in buildings and within our downtowns. And then finally, I just want to recognize the many partners who assisted us in this work who are listed here, as well as funding that was provided by Canada Mortgage and Housing Corporation through the National Housing Strategy Solutions Lab. And to encourage you to read the full report at publications. Thank you.

Mary Rowe [00:13:04] Jen, before you step off and I know you’re going to be lurking in the background, as they say. But just a couple of quick questions just to clarify for people. One would be this: The choice of the cities … How did you decide about Victoria, Regina, Winnipeg, Ottawa, Moncton, Halifax? What was the rationale there?

Jennifer Barrett [00:13:19] Sure. The rationale was we looked at a variety of data in a number of cities across Canada, and we evaluated those with high levels of office vacancy, those with either high levels … A need for housing or a very acute housing need, whether that be affordable or supportive housing. And then we also looked at a variety of factors, particularly enabling policy. So we got at that through two mechanisms, one, looking at the policies themselves, but also looking at the number of conversions that had already happened that suggested that the conditions were in place to enable conversions to happen.

Mary Rowe [00:13:53] Yeah, I mean, I think the point here is that when … we’re going to get into this, I’m going to ask everybody else to turn their cameras on so I can call on you shortly, so if the other gang can just put their cameras on so people can see you. Jen, one of the things that I’m anticipating we’ll cover in the panel discussion here is the naysayers, the skeptics who say, oh, it’s too difficult or it’s too whatever.

Mary Rowe [00:14:12] And I appreciate that part of what you tried to do here was just look at the as we used to call in the biz, the positive deviants. There are some examples where it’s actually happening. Why is that? What were the conditions that allowed it? Am I right, too, in assuming that if there are listeners here who feel that they’re … and I’m just delighted to see the range of cities and the range of participants, those of you that are identifying yourself on the chat. Thanks for that because we can see we’ve got builders, developers, designers, citizen groups, activists, some government folks, some economists nice to see some economists always show up. So if people want to do a deeper dive in this, they can get in touch with us and then we can figure out what the process might be to actually do a deeper level analysis in key cities. Right? [Absolutely] Because you are just getting started with those things.

Jennifer Barrett [00:14:57] Yeah. And in our report, I didn’t refer to it, but our report includes a toolkit at the back, which is really kind of a method for other cities or stakeholders to take themselves through a similar process to what we did to evaluate the opportunity.

Mary Rowe [00:15:09] Right. And again, you know, this is not simple and it’s not the silver bullet, but what we’re suggesting is it should be part, as you suggest, an important tool in the toolkit. Thanks, Jen. Stay on for as long as you like. I know you’ll be lurking in the background and we can call you back if we need you. Steven Paynter’s coming with us. Gensler was involved in the early days of this, and Steven’s firm and colleagues participated in the actual creation of the work.

Mary Rowe [00:15:29] So, Steven, I’ll go to you first to give us just a couple of minutes, an overview about your perspective and the work that you’re doing in the field on conversions. Nice to see you.

Steven Paynter [00:15:37] Yeah, good to see and thanks for joining everyone. So I’m Steven Paynter. I’m a partner at Gensler. I’m actually based in Toronto, but for the last four years I’ve been doing these studies and these conversion analyses across North America and parts of Europe as well. So in the last three years, since we first started this, just before COVID, I analyzed over 800 buildings and we’ve worked with nearly … over a dozen cities and about 500 individual developers and stakeholders, too. So we’ve done that. We’re really kind of a data rich approach. And obviously I couldn’t sit down and design 800 buildings. So we’ve done that with a data rich approach which has led to this understanding of how these projects can function, how they impact cities, and how they actually impact the population of downtowns, and to encourage that vibrancy that we’re looking to bring back to most of our downtown costs.

Mary Rowe [00:16:48] This is a work in progress. Right? So that’s part of the I think the narrative that we’re trying to generate here is that you take an inventory, you see where the potential is, and to use that horribly overused phrase, “where’s the low hanging fruit?” Are there some tests that we can start and be able to evaluate and then see whether or not it’s worth pursuing? And if so, what’s the typology that makes most sense. Yes? It’s an iterative thing …

Steven Paynter [00:17:08] Yeah, it is iterative. And what we’ve found, to your point about the naysayers earlier, is that actually when we get into this one, we studied the vast amount of buildings and we did 14 million square feet in Calgary as an example of that.

Steven Paynter [00:17:23] Both is true that the naysayers are right. A lot of the buildings don’t work physically and the kind of people who are more positive about it are also right because about 30% of the buildings we study make great conversion candidates that lay out beautifully for residential units that really can add a lot of diversity to the mix of use to a downtown. So not that … I’m just trying to play everyone. But, you know, both sides are right. It is difficult, except if you have that kind of Goldilocks building and that’s what we’re helping to identify. How do you find those buildings? How do you find two or three of them together so you can create a bit of a mixed-use neighborhood? And then how do you get the policy lined up to support and encourage that as well?

Mary Rowe [00:18:09] I mean, I always … My reaction to this is we can’t just discount things because they’re difficult. You know, sometimes doing the right thing is difficult. But I appreciate that the economics has to work. Let’s go to you, Joe. You’re actually a practitioner of this. You’re in downtown, that beautiful nature in Halifax. And see that lovely Maritimes sunshine coming in and your corporate affiliation is a name that gets Toronto’s attention. But you’re not that “Sidewalk”. You’re the other “Sidewalk”. So, Joe, talk to us about your experience in Halifax with the whole conversion discussion and then we’re going to go from you … we’ll keep going east. Go ahead.

Joe Nickerson [00:18:42] Okay, great. Yeah, I appreciate you having me. Thanks, everyone for joining. So, my name’s Joe Nickerson, I’m a partner at Sidewalk Red is the name of our company. It’s Sidewalk Real Estate Development. So we are really a neighborhood developer in Halifax, Nova Scotia.

Joe Nickerson [00:19:00] My partner started our company about seven or eight years ago, so we’re relatively new to the development scene, but we’ve been scaling up and really fixating our efforts on a couple of core areas of downtown core Halifax, downtown core Dartmouth. And we’ve scaled up, you know, we’re a vertically integrated company. We have in-house construction management, general contracting and property management as well as development. So we came into this building conversion side of things kind of honestly and kind of just fell into it because we’re fixated on four specific areas and we’re not spread out across a large geographic area. We’re really focused on creating healthy neighborhoods and something for the long term. So because of that, we’ve seen older buildings that have high vacancy rates and we’ve been able to target those and acquire those. And over time, we’ve really focused in on adaptive reuse at a smaller scale and have grown this up into what was featured in the report with a larger scale office building that we’re currently under construction on. And for us, there’s a neighborhood component to it. It is certainly not an easy thing to tackle, but we because we started small and have worked our way through it, we kind of know a lot of the pitfalls that you will come into. I wish I had met Steven when we started buying up some of these buildings before to fully comprehend some components of it. But I think, you know, there’s a learning experience on some things. But what we really like about these buildings and we primarily been at the brutalist high rise structures that we’re talking about is it’s differentiated product for our market. There’s not a ton of differentiated product. There’s a lot of new product going up that, you know, works from a similar materiality platform to construct the unit.

Joe Nickerson [00:20:56] So you get some levels of creativity, but it’s rare in new builds that you see 11 1/2 foot to 16 1/2-foot floor to floor is designed in, which is what we’re working with on, you know, in our current building. And so for us, it’s the neighborhoods. It’s obviously making sense of the numbers and practicality of an investment. But at the end of the day, we’re long term owners, we’re heavily invested in the neighborhoods long term, and we believe pretty passionately in differentiated product and loft product, which we’re able to target with these types of buildings.

Mary Rowe [00:21:35] I love the idea that you’re a neighborhood developer. I’ve just got to say, I just love that that positioning of you in the market. And I also just am fascinated for those outside of the architecture world is, you know, when I. Became more exposed to this when I was living in New York and got to hear how architects talk about Brutalism. You know, Brutalism means something quite different in other sectors. But if this is the solution to Brutalist architecture, perhaps that’s a good thing, just saying … But also the enabling conditions piece. It’s interesting, Halifax and Calgary are two cities with a particular set of challenges, and I think that’s instructive for us as we continue to weave forward on this. Let’s now go to a different city and a different scale and where else than New York City. Melissa, thank you for joining us. And maybe you could just explain to people what EDC does. I lived in New York for six years. I know well how important EDC is, but just give people who are listening a little refresher on what it is you lead and then talk to us a little bit about how New York is thinking about the potential for conversions.

Mary Rowe [00:22:35] And I’m assuming primarily in Midtown, but you’re going to tell us more. So over to you. Thanks for joining us.

Melissa Román Burch [00:22:39] Absolutely. Thank you, Mary, for having me. Yes. My name is Melissa Román Burch. I’m the chief operating officer at the New York City Economic Development Corporation. We sit at the intersection of business and government. The EDC is not a government agency. We work in close coordination with City Hall and we have a number of members of our independent board that are mayoral appointees. But fundamentally, we are a real estate organization that interfaces with the private sector. We are self-funded, 100% self-funded. We do not collect city tax levy to fund the operations of our 500 people that work at the EDC. We pay for ourselves, our real estate portfolio. We are a public benefit corporation, not for profit. So we manage our entire portfolio of 60 million square feet to a double bottom line of both financial returns and measured social impact. In particular, on the topic of office to residential conversions and because of the role that we set sort of at this intersection between business and government, we were tapped by City Hall, by Mayor Adams, working in partnership with Governor Hochul to put together a report right at the beginning of both of their administrations, which started in January of 2022, to focus on how we strengthen New York’s business districts. And this report, called the New New York Report, was put together with the leadership of two deputy mayors, Dan Doctoroff and Richard Barry, as well as with the sort of a blue ribbon panel of 50 some activists, neighborhood developers, real estate developers, business, civic leaders, academics, you know, a broad coalition of folks that came together and over a series of six months, months, came out with 40 recommendations that are truly New York City’s road map for its business districts over this next mayoral term.

Melissa Román Burch [00:24:50] It’s also informed our legislative strategy relative to both things that we want to accomplish at the city level, but also that are sort of controlled and dictated at the state level. One of the 40 recommendations has to do with office to residential conversion. And I want to second the point made that this is not the silver bullet, but my goodness, this is a critical tool that we think there is a real moment in time right now that we need to be focused on how we create the right legislative framework to give more flexibility for the real estate community to respond to how to repurpose and adaptively repurpose office buildings. We think that from a supply side, there’s about 90 million square feet of vacant office space in New York City right now. That’s out of about 450 million total square feet that exist in Manhattan. And we know that some of that office space needs to be modernized and it needs to stay as office because we need excellent, phenomenal office buildings that will attract innovation firms, attract the best talent. So that is not what today’s discussion is. But I wanted to acknowledge that that is absolutely one of the 40 recommendations. As we think about office to residential conversion. We also acknowledge that there is an opportunity to enable more buildings to convert. We have some antiquated regulations in New York that do not permit the conversion of buildings that are older, I’m sorry, that are more recently built than 1961. So you can only convert very old buildings. That’s a somewhat arbitrary date. It’s different in different geographies, but for most of the city it’s 1961 and it’s just one of the many outdated regulations that we are seeking to update that we have to work through our state legislator in order.

Melissa Román Burch [00:26:46] To allow a wider swath of buildings to qualify for conversion. I will just, coming back for one moment, because I know we’ll have more opportunity to dive into the conversion conversation. Is that in addition to converting buildings, which we believe will strengthen business districts by bringing more vitality and vibrancy to these areas and create more 24/7 sort of social districts … Districts where you are living, you’re working, you’re learning, you’re playing, and that these sort of diversity of uses in the districts will sort of enable some of what was more of a monoculture within Midtown and downtown, but primarily in Midtown, to evolve into true mixed use districts. And this is a critical tool. That needs to happen in concert with many street level interventions, investments in public realm, investments in quality of life issues, investments in streetscape, you know, containerization and other things that we’re really confronting in terms of New York City streetscapes. And that’s why this is one of 40 recommendations that we believe are, you know, core to the focus of what we need to do to make sure that our business community and our business districts remain strong and healthy.

Mary Rowe [00:28:13] Thanks, Melissa. I appreciate that. We’re going to come back to you on the other 39 for a few more CityTalks. Because it’s you know, it’s a bundle of stuff that needs to happen. And I think that’s part of our ongoing conversation about how we build cities is it’s not just one thing and it’s never one thing in isolation. And so the question is, how do we encourage this to be one of the key things. Tracy, let’s go to you now. I’m assuming you’re in Washington, D.C.

Tracy Hadden Loh [00:28:35] I know Brookings is based there, but I don’t know where you happen to be. But welcome to City Talk and Interested, because you’ve been tracking this in other American cities. Welcome.

Tracy Hadden Loh [00:28:43] Hello from downtown Washington, D.C. and Piscataway land. I’m at the Brookings Institution here and I am happy to join everyone today because I’m currently doing a research project which a member of Melissa’s staff is participating on. We are working with public and private sector leaders from New York, Philadelphia, Chicago and Seattle in order to envision a future for downtowns and make a set of policy recommendations about how cities should be thinking about this, that has included interviewing many of the members of the New New York panel, which is a very distinguished group that I learned a ton from. As part of that process one of the research reports that this project has generated is a report specifically about office to residential conversions, kind of like how to think about it. With this report, we’re really trying to clarify what the public interest in office to housing conversion is, because there are many interests that are relevant to the building owner. But what is the broader public interest? We need to understand that really clearly and specifically in order to create the right policies around office to housing conversion and, as with any policy conversation, we also need to understand what the role of these policies will be in either reducing or making inequality worse. Because there is … The political economy of downtowns is a big piece of what we’re talking about. We’re talking about the future of downtowns. So in that report, just a quick overview, we talk about how this is early days in this conversation. Like I know that it feels like the last four years have been a million years, but actually the market for the office market has not clear yet.

Tracy Hadden Loh [00:30:38] In most markets, like buildings aren’t even really repricing yet. So it’s like too soon to intervene on a … you know, in some cases, especially in terms of like … Throw a lot of money at the problem. It’s also not clear that return to office has plateaued yet, because one thing that I think many people still aren’t aware of is just how much return to office and office utilization is varying between markets right now, both domestically and globally. The fiscal case for conversion varies from city to city. There isn’t a one size fits all solution. The role that theory plays is in the spaces different, in different places, and so cities are going to need customized solutions. A question all cities need to be asking themselves is before converting offices into housing, have you tried just building housing? Many cities have not tried this. One weird trick that could save cities is simply building housing near jobs, which is the reason we have cities. So just trying to help remind everyone of that. And then, this is also not really about downtowns, even though obviously, like, that’s a topic that I’m interested in. Cities need to think big about how to create flexible built environments. This is even bigger than cities. This is just everywhere. This is relevant to rural areas to, right? We’re in a world where the pace of change is faster than ever and crises are piling up and we need to enhance our ability to respond. We .. our built environment needs to become more flexible. Everything can’t be taking all these years to get studied, and we just need to be able to do more with what we have. So I think that this is a policy conversation that’s relevant to everywhere.

Tracy Hadden Loh [00:32:39] And that’s a message that particularly I have for my federal audience, but that I think is helpful for cities to think about as well because this isn’t just about downtowns, it’s also about neighborhoods. And that can inform policy design.

Mary Rowe [00:32:52] I appreciate, you know, the notion that you … we have to expect more from our buildings that they can. And in Europe, they have, over hundreds of years evolved in different kinds of purposes. And you see it … once you see it once, you see it a gazillion times, something that was a school then becomes a faith place and then becomes a community gathering and then it comes back, you know, 60 years later, it’s something else. So as you suggest, this idea that the life of a building and the flexibility that we want to see, that’s a very important point and that we shouldn’t really be building anything for single use anymore, I guess, that’s the challenge, right? And that we … Yeah, I know. And I appreciate what you’re suggesting. It works at all scales. It’s a principle of urbanism around adaptive stuff. So I’ve got some questions for the group, if I can throw them out. Let me just say this question about what is the public interest, Tracy, that seems to be framing your report? Melissa, do you think about that much? I mean, in terms of how do you see the commercial sector serving the public interest? Have you thought about that, you guys must live with that all the time?

Melissa Román Burch [00:33:54] Yeah, I mean, it is you know, it’s a great question and one that we do internalize very much as the Economic Development Corporation. We are thinking about how we grow the economy and we create jobs.

Mary Rowe [00:34:06] But, you know, we’re also thinking about what it means to, you know, to be able to sustain this pace of job growth. Part of how, you know, we are in an affordable housing crisis within New York City. I don’t think that we are alone in that. But I did just want to make that clear that it is a decade’s crisis in the making. But there’s also sort of the new acknowledgment of the, you know, the last decade we’ve seen incredible growth of jobs. Almost 900,000 new jobs were created in New York City from 2010 to 2020. And in that same period, about 206,000 housing units were created. And while it is more than just a city of housing supply that supports our, you know, our job base, you know, we’re a regional economy, those are just New York City jobs. And there has been a mismatch in the type of, you know, growth and in many restrictions that have prevented more housing production to occur. So we are thinking about the public benefit. I did want to highlight that New York has done this before. And we are very much, like me sitting in this chair today, are looking very much at previous examples. I want to highlight Lower Manhattan, which actually used to be extremely office centric and in the late nineties and early 2000 was already confronting high vacancy rates in office because that office staff was really becoming obsolete and noncompetitive with newer office supply in Midtown, there was a tax abatement program that was put into effect, called for 421G that actually enabled the conversion of office space to residential in Lower Manhattan in a very, you know, finite location.

Melissa Román Burch [00:36:07] 13,000 units were converted and created, about 13 million square feet converted, creating about 13,000 units. And then that program sunsetted. So that abatement which was really used to demonstrate that housing could thrive and survive in lower Manhattan, that abatement sunsetted and then an additional 17,000 units were created in Lower Manhattan without the abatement. So I think that this question about public benefit is also about sort of public use of resources and how we are thinking about tax incentives. Within the market interventions need to happen and when we think we need to … You know, I liked your commentary, Tracy, about like we’re still in the early innings and we are seeing that the market right now is on their own converting office to residential. We’re seeing examples of that, right? However, none of it is happening with affordable housing. And so a big part of the debate that we’re having right now as we think about our legislative actions is do we want to introduce abatements to incentivize the creation of conversions with affordable. So I just wanted to put that out there into this debate.

Mary Rowe [00:37:27] Thanks, Melissa. You know, we had Carl Weisbrod on, oh, probably 18 months ago to talk about in the Lower Manhattan and … before people were really talking about this the way they are now. And part of the comment that we made was that it was another crisis, 9/11, that presaged having to rethink how you would create a complete neighborhood. In my understanding, too, I wasn’t in New York then, but I was in New York subsequently living there. And one of the dilemmas you then had is you had to now then come in and invest in public realm. And so part of the introduction of mixed use is into these neighborhoods that have been primarily monocultural, is that there’s now going to have to be other kinds of uses, investments in civic spaces, investments in grocery stores.

Mary Rowe [00:38:06] And actually, I guess the point, Tracy, that you’re making is that you want to try to create neighborhoods that have work opportunity and leisure opportunity and recreation opportunity and residential opportunity. And both Joe and Steven are working in cities where they’ve had to kind of come to terms with it. Steven, I want to go to you because Calgary has become kind of the poster child for this, because you had empty offices, floors for almost ten years in that city. So was there a more of a sense of urgency there that they had to repurpose and that those spaces weren’t going to fill up anytime soon, right?

Joe Nickerson [00:38:41] Yeah, absolutely. If you look at where Calgary was in in 2019, so pre-pandemic, they had a vacancy rate of 32%. And if you took sublease space into account, it was over 40%. So they were ahead of the curve in a bad way in terms of a problem and then variant of the curve in terms of coming up with a solution. So if you look at their program right now, which incentivizes conversions at $75 a square foot, you can get $75 and its effectively a cash grant rather than a tax. Abatements are very effective and easy to understand, but they paired with money to upgrade upgrade public infrastructure. So more parks, more schools, fixing some of the transit. But the advantage of getting rid of that monoculture is that you can actually just by default fix some of those problems if you can bring people closer to where they work. And as Tracy said earlier, putting people in their jobs is the whole point of a city. You know, if you can bring people downtown, you actually reduce the commuting.

Joe Nickerson [00:39:49] So you reduce the strain on public transit. And you can actually reuse some of the downtown that only really gets used 9 to 5 during the week and utilize that on the evenings and weekends. So you’ll see, you know Toronto is a good example too … The entire PATH system closes at 6:00 and is closed all weekend. If we started to get people down here, all of a sudden that would actually just be used more than it is today. Same with the downtown parks. No one’s there on the weekend, no one’s there in the evening. Some of the infrastructure exists. It’s just not really utilized …

Mary Rowe [00:40:25] In a in a 24/7 adaptive way. Exactly what Tracy was getting at, that we have to have flexible spaces just for people listening who aren’t from the center of the universe, a.k.a. Toronto. The PATH is an underground mall, basically, it’s a walkway that creates the connections between the CBD. And it was populated prior to COVID with all sorts of little shops and different kinds of things. And then all of that went away and now it’s having all sorts of struggles and in other parts of the country they’re called plus fifteens or they’re located there, they’re connectors, forms of connection that that build from building to building. I want to go to a question that Joe mentioned and ask the gang about this. How important is ownership of the building? Because, Joe, you said “we’re in for the long haul”, so you’re continuing to own these buildings. How important is that?

Joe Nickerson [00:41:16] From our perspective, it certainly helps us make sense of reinvestment into the buildings. It’s, I think, more so from a neighborhood investment standpoint. The long-term nature of what we’re doing is important because some of these, you know, some of these projects and some of these strategies that we’re putting into motion don’t have five- or seven-year payback windows like your typical, you know, REIT or private equity structure that has more immediate payback requirements.

Joe Nickerson [00:41:51] So it allows us to approach the neighborhood in a different way. I don’t think from a building conversion standpoint, it necessarily has to be the same. Like, we look… the building that we’re converting now is just under 200,000 square feet. It’s actually a faster project for us than building a comparable new build. You know, and that is a bit of a unicorn. There was the right amount of vacancy in there. It’s in the right location, but it’s an existing building. So if you can figure out a way to convert that without having to do the structure, you know, and dig a hole in the center of a downtown, you know, there’s some advancement through that. But I think we came into it earlier in the process without any natural incentives. The way that is kind of moving the needle a little bit in Calgary because we made a business case for this specific building. They’re not these aren’t abundant everywhere. This was one that we sourced off market because we identified it as an opportunity and the pound for pound rate of doing it made sense, but it still is not … I think it’s a supply demand constraint that we’re running into here as well.

Mary Rowe [00:43:00] You as the developer, the owner-developer, are in essence providing patient capital. And the dilemma we’ve got is if you look at the commercial stock in any of these cities that we’re talking about, particularly in New York and in Toronto and in the large urban centers that Tracy’s studying, these are generally large financial institutions that own or pension funds or REITs that own these buildings and aren’t in the patient capital business. So I guess that’s an interesting question about where should the money come from? And do we ever think we’re going to have a financial climate with enough abatements or enough subsidies? I can see as I’m chatting that the chat is blowing up.

Mary Rowe [00:43:38] So lots of different ideas in there. Where do we think the money should come from to get the larger scale buildings? Or do we say forget them? Don’t focus on those big towers that happen to be back here behind me. Instead, focus on the scale of building that Joe has identified and look at that sector. Any thoughts on that? Either from Tracy or Steven or Melissa?

Steven Paynter [00:43:59] I think I can start … One of the big things we’ve found is the really large-scale buildings, generally are newer and generally will produce too many units. And I know that sounds like a strange thing, but you can’t suddenly do a project with a thousand units in it and expect it to be A) successful and B) completed in a reasonable amount of time. So most of the time, looking at these kind of 20 story buildings, can we produce somewhere between 100 and 400 hundred units? And that seems to be the size that people are willing to invest in. Now, I don’t know that it needs to be, you know, the kind of patient capital thing or some of it can become condominium. For sure … But I think we need a mix between those things that people can own, things that people can rent and the incentives actually help tip the needle to create more of that and create it more quickly. So that’s really where that kind of partnership between different types of funding is coming in.

Mary Rowe [00:45:02] Steven, could you imagine a mixed building? Are we ever going to see a situation where you could convert a chunk of a commercial building into housing and the rest could remain commercial?

Tracy Hadden Loh [00:45:12] This is already happening and lots of places …

Mary Rowe [00:45:13] It’s already happening …

Steven Paynter [00:45:16] And New York is primed for this, by the way. Any city that has podiums, buildings with smaller towers. Yeah .. the egg-shaped building …

Mary Rowe [00:45:24] But we already do it with retail. Retail goes in on the ground floor and then Tracy, how do we build it then if we want to put commercial back in, how would that work? Tracy How are you seeing it in other cities?

Tracy Hadden Loh [00:45:33] So move office tenants to the lower floors by one bank of elevators and then the top of the cake convert into stunning housing that is served by a second set of elevators. Or the bottom is a hotel and the top is office like you can make a cake using different layers and in different ways.

Mary Rowe [00:45:54] Melissa, is this being talked about in midtown or other parts of New York?

Melissa Román Burch [00:45:58] Absolutely. And right now, this is really the only alternative that we have for conversion. You’re seeing a lot of mixed buildings because we have a cap on the amount of residential that any one site is able to have in New York City. We call it the FAR cap, but we don’t need to get into specifics. But there’s actually legislation trying to lift that cap so that we could actually create single use buildings through conversion. Right now, many of the buildings, you know, unless they’re smaller buildings, you know, these larger buildings have to work through more of a mixed-use format. So it is absolutely doable. I just wanted to add as well that, you know, there’s a whole Rubik’s Cube of … I mean, partly why this topic is just so fascinating is there is just like a whole Rubik’s cube of factors that really go into site by site by site figuring out is, you know, is this an opportunity for conversion? And some of them are physical characteristics.

Melissa Román Burch [00:46:55] And I know Steven’s, you know, studied those in Joe your you know, living them in your projects. You know, how do we even create flexibility in terms of residential typologies with a zoning to allow us to maybe think about, you know, bedrooms that don’t have windows in New York? You know, there’s different types of things that have worked successfully in other cities. And I think that’s very much in the discussion because we know that many of the buildings that we might want to convert have deeper floor plates and need to contend with issues in New York around, you know, depth of floor plate and access to, you know, to windows. But I am not expert in those topics. I just wanted to acknowledge that that is even, you know, when you talk about ownership, that is another one of those issues, the capital structure of the building. You know, we have some buildings that are not owned by three or four large institutions, but are owned by whole consortiums like 30 different people in the ownership structure. So good decision making around those is incredibly complicated. Those buildings have sort of been sitting on some nice, consistent cash flow for the last 20 or 30 years, and their ownership structure isn’t even used to making large, you know, major strategic decisions, like certainly not something on the scale of “do we want to convert this building to a whole another use?” So capital structure matters a lot as well as ownership, and that’s part of the Rubik’s Cube of what will enable a building to convert alongside of some of these physical characteristics.

Tracy Hadden Loh [00:48:28] I want to build on what Melissa’s saying and double back to your question, Mary, about like, where’s the money going to come from to pay for this and how is that going to work? So like the two biggest barriers to conversion are not like … It’s not feasibility, or zoning or whatever.

Tracy Hadden Loh [00:48:42] Those are barriers … The two big barriers are very few office buildings are actually empty. They’re just half empty … So these are positive cash flow buildings that have tenants in them. And that means that the value of the building is a barrier … like if someone is like, Yo, this building is free, then it’s like, okay, let me see what I can do with it. But it’s like, not free because it’s a positive cash flow building. And so questions like…  If it even needs to convert. Like, who’s going to help make that possible? Like, it’s going to address the economics of that. And that is not a public sector role alone. Right. Like what unlocked a lot of conversions in Lower Manhattan was also like … Buildings either falling into foreclosure or the owners finally admitting, “Wow, this thing’s really not worth what I’ve been saying it’s worth all along” and repricing.

Steven Paynter [00:49:39] That’s happening now on a huge scale …

Tracy Hadden Loh [00:49:40] But this is like a necessary step that needs to happen. And like, I’m hearing cities talk about like incent … Like trying to accelerate the conversion process and like looking at incentives or essentially like buy buildings at their pre-pandemic valuation. And I don’t think that’s an appropriate use of the public money.

Mary Rowe [00:50:00] You wouldn’t accelerate ….

Tracy Hadden Loh [00:50:02] Somebody like that here. And it’s like it’s going to be CRE.

Mary Rowe [00:50:06] Okay, Melissa and Steven, go ahead Melissa …

Melissa Román Burch [00:50:10] I mean, I would say that there’s not enough public money in the world to solve the affordable housing crisis or, you know, sort of thinking about the built environment of our cities. And that is why it is so critical that the public think about how to leverage private investment. So any incentives should be about how are you leveraging private investment.

Melissa Román Burch [00:50:30] And so I just wanted to put out there that our framework, you know, the way that New York City looks at this is very much about public private partnership, but it is absolutely that we are creating you know, we are catalyzing investment that wouldn’t have happened, but for some of these interventions. And so that’s how we really think about the actions that we’re taking and what’s necessary and what’s not.

Mary Rowe [00:50:54] Steven, jump in.

Steven Paynter [00:50:55] Yeah. So what Tracey is talking about, about the repricing that’s absolutely happening right now. And if you look at the information that the JP Morgan put out in January, they said it was going to be $5 billion worth of defaults on commercial real estate this year. They revised that two weeks ago to be $40 billion. So that repricing is actively happening and those complicated ownership structures are seeing that. And then the trading they’re building. And that’s why Joe can go pick up a building in Halifax, because it essentially goes into default and then becomes cheaper in the market. Where I think the incentives come in isn’t buy those buildings. Because you’re right, that’s a kind of ridiculous use of money. It’s actually to create momentum there that you wouldn’t otherwise get. So coming back to Calgary again, because they’re the most far advanced on this, but when we did the study with them, we analyzed all of the data and we said, we think you can do … 3 million square feet of conversions … Will happen if you change the zoning rules and you ask people to do it. They said that wasn’t enough. They had a 14 million square foot vacancy problem. They wanted to get rid of half of it. And that’s where the incentives came in, was we can do 3 million in the market.

Steven Paynter [00:52:11] Great. We know they need to get to 6 to stabilize our tax revenue. So what do we need to put in to do that? And they saw it as an investment. I think the payback on it was only about five years to get people in the downtown to increase the tax revenue and then to pay back the investment. So I think that’s where the public money comes in. It’s not to pay for it, it’s to make it happen more quickly. And that’s what happened in in New York, in downtown New York was, I think you said 13,000 units created and then 17,000 after the tax abatement. That’s what we’re talking about now. It’s how do you kickstart it so that you reap the benefits going forward?

Tracy Hadden Loh [00:52:49] I think that’s the right way to think about it. Right? That like, this is about like … I heard affordable housing as a public interest in conversions. That’s absolutely correct. That’s absolutely the right way to think about it. But another extremely important public interest is stabilizing and diversifying the tax base of the jurisdiction.

Joe Nickerson [00:53:16] One important thing to note, because like from a number’s standpoint, this is one thing that we’re very aware of and that we understand in a good way of looking at a lot of these buildings is there needs to be some openness and creativity. I agree it’s not a public funds issue where they should be buying buildings. That’s not a good use of funds. But having a property tax, a direct property tax incentive applied to something … is something that’s multiplied as a reduction to the expenses of that building and directly impacts the value.

Joe Nickerson [00:53:48] So it’s a very skinny way to throw out a direct incentive without any strings attached to it. That as a developer, as someone who looks at opportunities, I can model that in to a forward-looking cash flow and apply that. You could give me $5 million today. I prefer the property tax credit that I can model in over time that impacts the value of my building. And the reality is if you throw those carrots out with less strings attached to those things, people will be creative and they’ll find opportunities and they’ll act faster. But if we put funding out there with crazy strings attached to it that no one actually unlocks, nothing is going to get done. Nothing’s going to change in a hurry. And if the expectation is wait for buildings to reprice so that guys will lose their shirts on who own them at the REIT level, there’s going to be no more capital coming into that space to invest in housing when guys have lost their shirts on that component. And it’s like … as complicated as this issue is, it’s truly a first-year economics, first class economics issue. It’s supply demand. We need to increase supply and we need more investment into our downtowns, into our buildings, to increase that supply, because otherwise it’s not getting built.

Mary Rowe [00:55:07] So, Joe, I’m just going to intervene for a second as somebody who failed not once but twice, Economics 100 just saying and you know, I am interested in what you folks collectively see as the potential uses for this converted space. Melissa you got at it a bit. I know that some … Officials are thinking about whether or not there’s a potential to create actual subsidized, affordable public housing in some of these structures.

[00:55:36] Is … And could we imagine other kinds of congregate uses? Could we ever imagine long term care facilities in these places, or could we imagine student dorms? And I know … everybody … We have a very lively chat at CityTalk, and I just want to thank everybody who’s engaging and responding to one another. Thanks. And as I said, well, publish everything you say and every link you provide. But there’s lots of concern here that all we’re doing is creating a whole bunch of small units for rich people. So is there a way for us to target this and to actually address the more profound acute housing need that we may have or the mixed housing need we have? Melissa, you first, then Steve and then Joe, then Tracy.

Melissa Román Burch [00:56:14] Great … You know, it’s such a good question. So, you know, certainly this conversation around how we utilize incentives to activate affordable housing – delivery within office to residential conversion is critical because without it, you know, it’s you know, I want folks to know that converting a building is very expensive. I mean, there is a lot of, you know, investment. These are almost full sort of, you know, you get to preserve the structure. But, you know, in many of these instances, sometimes the buildings have to be reclad. There’s, you know, new MEP systems. I mean, there’s obviously totally different interior construction that comes with them. So these are significant investments. I don’t think that … the market at this point is sort of enabling 100% market rate housing to be delivered. Most of that in New York has been rental housing. And, you know, just a bit of that has been condominium. But I think that it would be good to have some of all of it.

[00:57:13] I mean, part of our mantra right now in New York is that we have a housing crisis and an affordable housing crisis like we want to start production of all types, not just one type. And I would put in that, you know, absolutely other typologies around seniors housing, supportive housing. I know we’re talking about housing, but I did just want to pick up on a thread that you mentioned, Mary, which is that in addition to thinking about what makes a city vibrant and how office buildings can be reused, they can also be reused. If we’re really looking at how we bring more academic institutions into our city core as well. I was just, you know, the EDC was involved in a transaction just recently in Times Square where we helped to create really a vertical campus for a university that is now putting, you know, 300,000 square feet of their campus into these buildings. So, you know, I think there’s all sorts of creativity and of course, getting those types of uses in there now opens up. “Wow, do we need, you know, student housing in closer proximity”, which is another typology that maybe connects back to this housing discussion?

Mary Rowe [00:58:24] Yeah, I’m with you about the not underestimating the role of … And similarly cultural institutions that can use these big floor plates. Right. So the thing I want to keep you guys on for another hour, but sadly, we can’t. We’ve only got 4 minutes. So I’m going to go quickly to Steve and Joe and Tracy. For last words from you guys about what you think … What balls should we be keeping our eye on here as we see the mix of conversion and adaptive reuse on the commercial space? Steven, Joe, then Tracy.

Steven Paynter [00:58:48] Yeah, I think the big one I think the affordable housing will come, by the way, because a lot of these buildings have … larger floor plates that actually encourage larger units and more family size units. And I think the next big wave that we’re seeing and I know CUI spoke to this as well, is what happens when you combine the need for housing and the need for … and the office vacancy with what we’re seeing in terms of sustainability credits. And local law 97 in New York and what’s happening across Canada with that money coming in. Yeah. This new stock of housing we’re producing should be the future of housing. It should be the net zero buildings. We’re going to reclad these things. We’re going to reuse the concrete structure and save all of that carbon, just up 2 million kilograms for building. Then we should be thinking this isn’t a now problem, this is what we’re doing for a 50-year issue here. Yeah, New York is very primed for that because of what they’re doing with Local Law 97. The rest of us should be doing that too.

Mary Rowe [00:59:47] Multi solving …  Joe.

Joe Nickerson [00:59:50] Yeah, I’ll try to be quick too. So for us or for me, I think it’s anything that we can do to spur supply. Keeping in mind the dynamics and health of a downtown, we’re very focused on mixed use. I think it’s critical that you don’t just try to fix the problem all at once, but you create open incentives that people can work with without a million strings attached to them to try to reengage investment into downtowns. And I think with supply, affordable housing will come. But if we just try to fix the affordable housing issue in isolation, it’s going to filter down to, you know, they’re up to the other rungs in the market … Expendable building is just a fact.

Joe Nickerson [01:00:36] And that’s kind of where we’re at. So anything we can do to help move supply need I think is the only solution to getting us there.

Mary Rowe [01:00:42] Yup … More and more and more. Last word to you, Tracy.

Tracy Hadden Loh [01:00:44] So office to housing conversions aren’t going to solve the housing crisis. Like these are not actually meaningful amounts of supply. The case for this is like a placemaking case about like creating whole neighborhoods … so just want to be clear about that right off the top. And so, as cities think about making conversions easier, which is a good thing to do. Financial incentives to do that should be paired with regulatory relief to make the built environment more flexible. It’s not okay to throw money at a problem without also trying to fix the problem, which is something that cities do a lot. So just make it easier to build new housing. In addition, to making it easier to convert things into other things. Right. It’s not just offices and housing. What about, like dead malls into offices? Everything needs to be able to change into something else and just make it easier to do that. And then I think that … this is bigger than downtown. Everywhere needs to be able to change. Like what needs to happen in a lot of cases is like obsolete office space and other locations is like what we need to eliminate from the market so that those jobs can locate in the downtown, in the most successful way.

Mary Rowe [01:02:03] Don’t you feel it’s a bit like those snow globes? Do you have snow globes in the US guys? You know those things where you throw it up and then the whole thing changes.

Mary Rowe [01:02:11] That’s what we’re in. We’re in a big urban snow globe. Who knows where it’s all going to finish down. Thank you for joining us, Melissa, Steve and Joe and Tracy, very much appreciate you sharing your expertise, your perspectives, your hunches, your observations, we’re all about the real here and what what’s the possibility. We’re about people, places, potential and what is possible. We have two CityTalks coming up in the next couple of weeks. One is on placemaking with the Healthy Communities Initiative and you’ll see in the chat it’s on the 18th at 1:00 Eastern about placemaking and making the case for placemaking, which Tracy just suggested convergence is part of. And also at the end of this month, we’re going to talk seriously about the mental health crisis that we’re experiencing. I’m sure, Melissa, that you will nod your head about this and Washington as well, addressing the mental health crisis that’s challenging our downtowns and our main streets right across this country. And how do we actually engage all the stakeholders. And there’s many in this chat that know about this. So I hope people like Cathy Crow will join us at the end of May to talk about how we’re going to address mental health and how that contributes to creating a complete neighborhood. Thanks so much, gang, for helping us talk about the case for conversions. We appreciate your dedication to this and thanks for joining us on CityTalk.

Full Audience
Chatroom Transcript

Note to reader: Chat comments have been edited for ease of readability. The text has not been edited for spelling or grammar. For questions or concerns, please contact with “Chat Comments” in the subject line

11:58:50 From Emilie Charlebois (CUI) to Everyone:
Welcome everyone! We invite you to say hello in the chat before we get started. Tell us where you’re watching from!
11:59:19 From Emilie Charlebois (CUI) to Everyone:
Please change your chat settings to “Everyone” so that everyone can read your comments.
11:59:52 From Andrew McCreight to Everyone:
Hi all. City of Ottawa.
12:00:00 From Emilie Charlebois (CUI) to Everyone:
Share your thoughts on social media! @canurb #citytalk
12:00:12 From Mayja Embleton to Everyone:
Mayja from the City of Edmonton
12:00:19 From Larissa Stefurak to Everyone:
Hello, from Toronto – Thanks CUI for arranging informative talks
12:00:37 From Sharon Livingstone to Everyone:
Sharon Cabridge
12:00:40 From Rhiannon Hayes to Everyone:
Hello from Winnipeg!
12:00:47 From Mayja Embleton to Everyone:
Great music choice!
12:00:56 From Tim Wiens to Everyone:
Afternoon everyone from Guelph Ontario!
12:01:07 From Luisa Trevisan to Everyone:
Hello from Calgary!
12:01:17 From Erica Sangster to Everyone:
Hello from Victoria!
12:01:23 From Sadie Gilker to Everyone:
Hello! Sadie calling in from Musqueam, Squamish and Tsleil-Waututh territory (Vancouver)
12:01:26 From Beate Bowron to Everyone:
Hello from downtown Toronto
12:01:26 From Deb Moore to Everyone:
Greetings and good morning from Victoria, BC
12:01:35 From Cathy Crowe to Everyone:
Hi from Toronto.
12:01:44 From Judith Norris to Everyone:
Hello from Toronto! I agree great music choice.
12:01:55 From Lorraine Hopkins to Everyone:
Hello from Tkaronto!
12:02:16 From Emilie Charlebois (CUI) to Everyone:
We are recording today’s session and will share it online at
12:02:23 From Emilie Charlebois (CUI) to Everyone:
We have closed captioning enabled for today’s session. If you would like to turn it off, please click on the button at the bottom of your screen and disable.
12:02:41 From Emilie Charlebois (CUI) to Everyone:
We hope this session is as interactive as possible, so please feel free to share comments, references, links or questions in the chat
12:02:52 From Emilie Charlebois (CUI) to Everyone:
Please change your chat settings to “Everyone” so that everyone can read your comments.
12:03:05 From Emilie Charlebois (CUI) to Everyone:
Do you have specific questions for the panellists? Post them in the chat, and we’ll try to answer as many as possible.
12:03:19 From Emilie Charlebois (CUI) to Everyone:
Responses to questions and additional resources will be provided in the chat by CUI staff.
12:04:18 From Sueling Ching to Everyone:
12:04:26 From Matt Pelletier to Everyone:
Hello from Charlottetown
12:04:36 From Jean-Marc Nadeau to Everyone:
Good day…I’m joining you from SUMA in Regina, SK.
12:04:36 From Matt Grady to Everyone:
12:04:42 From Shawn Persaud to Everyone:
12:04:49 From David Caballero to Everyone:
Mexico City
12:04:50 From Reg Nalezyty to Everyone:
Thunder Bay
12:04:50 From Darcy MacDonald to Everyone:
Antigonish, NS
12:04:51 From Karol Murillo to Everyone:
Hello from Hamilton
12:04:51 From Judy Lam to Everyone:
Hi from Hamilton!
12:04:58 From Michelle Groulx to Everyone:
Hi from Ottawa!
12:05:06 From Greg Newman to Everyone:
Delta, BC
12:05:19 From Elizabeth Cushing to Everyone:
Halifax NS
12:05:34 From Lorna Stewart to Everyone:
Greetings from sunny Victoria, BC.
12:05:40 From Andrea Betty to Everyone:
Penetanguishene Ontario!
12:06:03 From David Scrivener to Everyone:
You can read the report’s Mary referenced on our website.
12:06:10 From David Scrivener to Everyone:
Case for Conversions:
12:06:10 From Emilie Charlebois (CUI) to Everyone:
Jennifer Barrett, Managing Director, Canadian Urban Institute
12:06:16 From Michael DelGiudice to Everyone:
Greetings from Miami!
12:06:24 From Derrick Holman to Everyone:
Hello from New York.
12:06:24 From Emilie Charlebois (CUI) to Everyone:
Jennifer oversees the Bring Back Main Street and Restore the Core initiatives and leads CUI’s Applied Solutions Lab, which undertakes research, engagement, partnerships and creative problem solving to shape public policy, implement best practices and help public and private sector leaders build capacity and identify solutions. Jennifer’s diverse experience in the U.S. and Canada has focused on improving social, environmental and economic sustainability.
12:06:25 From Patrick Robson to Everyone:
Hello from Niagara
12:06:41 From Emilie Charlebois (CUI) to Everyone:
Jennifer has worked in the public, private and non-profit sectors including affordable housing, land use planning, social development policy, and economic development. She has served as a municipal representative for the federal Homelessness Partnering Strategy and the Canadian Municipal Network on Crime Prevention, and as a participating member of the Canadian Institute of Planner’s New Urban Agenda Committee. She is a Registered Professional Planner and holds a Master’s degree in Urban Planning from McGill University.
12:07:02 From Mark Roseland to Everyone:
Greetings from Phoenix AZ and Vancouver BC
12:07:05 From David Scrivener to Everyone:
Case for the Core (from 2021):
12:07:24 From W Scotte MacQueen to Everyone:
Gensler DC here!
12:10:10 From David Scrivener (CUI) to Everyone:
Reposting the two reports for those who missed them:

Case for Conversions (2023):

Case for the Core (from 2021):
12:12:37 From Aundre Oldacre to Everyone:
Sustainable developers in NYC
12:12:46 From Emilie Charlebois (CUI) to Everyone:
If you have any questions you would like us to follow up on, please send to
12:12:50 From Tim Wiens to Everyone:
SLR Consulting Ltd. Here – Acoustics Design at your service!
12:13:05 From Andrew Browning to Everyone:
What is a “healthy” office vacancy rate? Landlords would perhaps say 5%, tenants might say 15% (lots of choice and downward pressure on rents).
12:13:14 From Emilie Charlebois (CUI) to Everyone:
Steven Paynter – OAA, ARB – Principal, Gensler Toronto
12:13:28 From Emilie Charlebois (CUI) to Everyone:
Steven Paynter is a Studio Director and Principal at the Toronto branch of Gensler, the global design and architecture firm with 53 locations around the world, including in the Americas, Europe, Asia Pacific, and the Middle East. He is widely recognized as an industry leader and an invaluable resource for market expertise to developers, landlords, and tenants alike. Steven is frequently called on to provide thought leadership on topics such as unlocking the value of Class B & C buildings by converting them to residential, shaping the future of cities, the urbanization of suburbia, and design of post-pandemic office buildings.
12:13:30 From Jennifer Barrett (CUI) to Everyone:
We considered 10% to be a healthy vacancy.
12:13:41 From Emilie Charlebois (CUI) to Everyone:
Engaged in original research, he has led the development of a tool for rapid assessment of existing office building stock for ESG performance. Steven was nominated by Business Insider as one of their Top 100 People Transforming Business in 2022, and his work and leadership have been featured in publications such as the Globe and Mail, Calgary Herald, BBC, South China Morning Post, RTE and Architectural Record.
12:13:56 From Emilie Charlebois (CUI) to Everyone:
12:14:02 From Emilie Charlebois (CUI) to Everyone:
12:14:29 From Toby Greenbaum to Everyone:
Hello from Ottawa
12:16:10 From Emilie Charlebois (CUI) to Everyone:
Joe Nickerson – Vice President & Partner, Sidewalk Real Estate Development (Halifax)
12:16:12 From Emilie Charlebois (CUI) to Everyone:
Joe Nickerson is the Vice President of Sidewalk Real Estate Development (R.E.D), a Halifax-based firm which takes an unconventional approach by valuing sustainability and the curation of thriving neighbourhoods. He is a leader with a proven history of success managing a variety of real estate portfolios for high-net-worth families in Toronto, Alberta, and British Columbia. Joe has worked at RBC Capital Markets and for both private and public real estate holding companies ranging from $100M to $11B in AUM. Joe holds an MBA with a specialization in Real Estate & Infrastructure from Schulich School of Business and studied Private Equity & Finance at SDA Bocconi University in Milan, Italy.
12:16:17 From Emilie Charlebois (CUI) to Everyone:
12:17:01 From Emilie Charlebois (CUI) to Everyone:
Welcome new joiners! Just a reminder to please change your chat settings to “everyone” so we can all see your comments.
12:17:07 From Emilie Charlebois (CUI) to Everyone:
Share your thoughts on social media! @canurb #citytalk
12:17:40 From Beate Bowron to Everyone:
Toronto had a conversion project of class C office buildings about 20 years ago. Mixed use development was as-of-right in the downtown , except the Financial Core. Dedicated approval resources are key. It was very successful, but, obviously it’s time to consider this again.
12:20:10 From Emilie Charlebois (CUI) to Everyone:
Melissa Román Burch – Executive Vice President and COO, Economic Development Corporation (New York, NY)
12:20:14 From Emilie Charlebois (CUI) to Everyone:
Melissa Román Burch is NYCEDC’s Chief Operating Officer and leads the Real Estate Transaction Services and Asset Management divisions. As COO, she oversees public/private developments involving City-owned property, and manages NYCEDC’s portfolio of 200+ unique and iconic assets spanning 64 million square feet, composed of commercial and industrial real estate, critical infrastructure, and energy assets. Melissa joined NYCEDC in April 2022 after two decades as a leading property executive and developer of large-scale, mixed-use projects distinguished by investments in transportation infrastructure, environmental leadership, and innovative partnerships. Prior to NYCEDC, Melissa served as Executive General Manager for Lendlease, where she initiated and led all acquisition and development activities for the NY region. Melissa was previously Executive Vice President for Forest City Ratner, where she oversaw the development of Pacific Park Brooklyn.
12:20:22 From Emilie Charlebois (CUI) to Everyone:
12:20:27 From Emilie Charlebois (CUI) to Everyone:
12:25:38 From David Scrivener (CUI) to Everyone:
Here’s the New New York report that Melissa referenced:
12:26:32 From Emilie Charlebois (CUI) to Everyone:
Tracy Hadden Loh – Fellow at Brookings Metro, Anne T. and Robert M. Bass Center for Transformative Placemaking (Washington D.C.)
12:26:34 From Emilie Charlebois (CUI) to Everyone:
Tracy Hadden Loh is a Fellow with the Anne T. and Robert M. Bass Center for Transformative Placemaking at the Brookings Institution (Brookings Metro), where she integrates her interests in commercial real estate, infrastructure, racial justice, and governance. She recently co-authored Myths about converting offices into housing—and what can really revitalize downtowns (, which details the extent to which office conversions should be supported for downtown revitalization. She serves on the boards of the Washington Metropolitan Area Transit Authority and Greater Washington. Her most recent writing includes two co-authored chapters in Hyperlocal: Place Governance in a Fragmented World. She also previously served two years on the city council of Mount Rainier, a small town in Prince George’s County, Maryland.
12:26:44 From Emilie Charlebois (CUI) to Everyone:
12:26:47 From Emilie Charlebois (CUI) to Everyone:
12:26:55 From Emilie Charlebois (CUI) to Everyone:
12:27:43 From David Scrivener (CUI) to Everyone:
Previously, Joe mentioned a project he’s working on in Halifax. You can read more here:
12:28:50 From David Scrivener (CUI) to Everyone:
Here’s the report Tracy is talking about from her work at Brookings:
12:29:34 From Karol Murillo to Everyone:
Good point:)
12:32:47 From Toby Greenbaum to Everyone:
How does one define the “public interest”?
12:34:54 From Mary-Ann Thurber to Everyone:
What about infrastructure around converted buildings? In order to attract families, should developers think about parks, play areas, etc., or does that add too much cost?
12:36:01 From Emilie Charlebois (CUI) to Everyone:
As always on CityTalk the chat is vibrant and active. Amplify the conversation and share your thoughts #CityTalk @canurb
12:36:22 From Jennifer Barrett (CUI) to Everyone:
@Mary-Ann Thurber. Yes, certainly the analysis should include location to understand what amenities exist to support residents and what would be needed to support new residential uses. Fortunately, many downtowns have infrastructure like transit, libraries, etc.
12:37:16 From Karol Murillo to Everyone:
Are you seeing conversions for families (i.e. more than 1.5 bedroom units)?
12:37:48 From Roberta Sager to Everyone:
Great discussion! In addition to civic/public spaces and amenities..any thoughts on the impacts of servicing infrastructure (water, wastewater, utilities etc.) when converting?
12:38:33 From Dianne Himbeault to Everyone:
How much of an issue are building codes and municipal plan examiners not knowing how to approve the conversion work, even in cities where policies are very permissive
12:41:25 From Jennifer Barrett (CUI) to Everyone:
@dianne Himbeault. Our work includes an evaluation of Building Code challenges. Commercial vs. residential do have different regulatory needs that need to be figured out especially exits. The second challenge is that building codes tend to be focused on new construction. Provincial codes that include sections for existing buildings and help apply the transition to residential. You can learn more in the supportive docs of our report:
12:42:24 From Dianne Himbeault to Everyone:
12:43:42 From Jennifer Barrett (CUI) to Everyone:
@karol Murillo. There are examples of larger units and congregate living such as supportive housing or student residents. It really depends on the configuration of the building.
12:43:51 From Kieron Hunt to Everyone:
Kieron here in Halifax and our firm, FBM is currently on the ground floor of the building that Sidewalk is converting from Office to Residential. It’s great to see and “hear” their progress in working towards creating a more lively downtown with full time body heat in an increasingly walkable and cyclable downtown Halifax. The key to conversions is to keep the street frontage and edges for retail animation and opportunities
12:45:05 From Matt Pelletier to Everyone:
In cities with a large federal government footprint (e.g., Ottawa and provincial capitals), should individual cities be engaging with PSPC to get more properties slated for conversion? The recent agreement with the union puts a wrench in the federal plans to end remote work, so that could create an opportunity to push for the federal government to scale down its office property portfolio.
12:45:41 From Lori Tesolin to Everyone:
In addition to housing, what about other industries that may want to have flex/collaborative space in downtowns? The creative/arts community has been doing this for decades in old industrial buildings after the manufacturing sector restructured globally.
12:46:38 From Rory McNeil to Everyone:
Building on Lori’s question, has there been any consideration of alternative non-residential uses that office space could be repurposed for? The concern being that if and when the office market returns, spaces converted to residential are never coming back but alternate uses could provide more flexibility.
12:47:59 From Jennifer Barrett (CUI) to Everyone:
@Rory McNeil. We’ve seen some institutional uses. NYC is focused on some necessary amenities such as childcare for some floors.
12:48:07 From Ashok Prasad to Everyone:
The balance of units that allow for longer term ownership (accommodate families) and smaller units for transitional users is critical to the success of a development. This makes buildings financially viable and there are users that have a vested interest in the health of the local community.
12:49:46 From Andrew Browning to Everyone:
These older Class B/C buildings are the cheapest office space for users. Don’t want to solve one issue (high vacancy) and create another (office rent affordability) – especially important for smaller businesses and start-ups.
12:49:55 From Cathy Crowe to Everyone:
What is federal role in Canada? RHI $$$ during COVID helped to finance some repurposing (albeit they weren’t office buildings).
12:53:19 From Steven Paynter to Everyone:
Yes – overbuilds are happening for sure
12:53:30 From Steven Paynter to Everyone:
We’re doing a 49 storey overbuild in Toronto
12:53:34 From Emilie Charlebois (CUI) to Everyone:
We love your comments and questions in the chat! Share them with everyone by changing your chat settings to “everyone”. Thanks!
12:54:20 From Rory McNeil to Everyone:
Often an older existing office building will not be at the maximum heights or densities that more recent municipal policy allows for. Have you found that this has been the case in the example cities? Why would a developer – or a municipality trying to acquire affordable housing do conversion rather than demolition and rebuild at a higher height and density?
12:55:08 From W Scotte MacQueen to Everyone:
Not to mention the carbon accountability shift and demand for more efficient buildings.
12:55:42 From mary shaughnessy to Everyone:
Housing for homeless people would be helpful, but NOT all of them living together in the same building (which evidence shows does not work as well as scattered housing).
12:56:03 From Jim Yanchula to Everyone:
Hey Canadians, many of the matters you are chatting about are to be addressed in the City of London (Ontario) Core Area Land & Building Vacancy Reduction Strategy scheduled to be tabled for our Municipal Council’s review at the end of this month.
12:56:38 From Emilie Charlebois (CUI) to Everyone:
The conversation can move fast and we may not have been able to address everything in the chat. If you have any questions you would like us to follow up on, please send to
12:56:39 From Karol Murillo to Everyone:
Hi Jim, can you send the link on the chat?
12:56:48 From Emilie Charlebois (CUI) to Everyone:
Keep the conversation going #CityTalk @canurb
12:56:53 From Mary-Ann Thurber to Everyone:
One of the issues we face in Edmonton, and I’m sure other cities, is the fear of crime downtown. That makes it difficult to attract people to live downtown
12:57:13 From Paul Musembwa to Everyone:
Please do this again ASAP. We need to hear each of the panelists speak at length
12:57:14 From Kieron Hunt to Everyone:
long before this renewed conversion trend started, Simon Fraser University was ahead of the times by creating downtown campus in vacant office and old shopping centre space in the early 90s in the heart of Downtown Vancouver. This campus has been immensely successful
12:57:21 From ben Diraimo to Everyone:
Excellent discussion!!
12:57:27 From Darcy MacDonald to Everyone:
What a great interesting discussion, big thanks to the speakers and Mary for coordinating.
12:57:38 From Washington Fajardo to Everyone:
12:57:40 From Canadian Urban Institute to Everyone:
Karol, in response to your question about Jims comment:
12:57:43 From Jennifer Barrett (CUI) to Everyone:
@Rory McNeil, One of the major incentives or triggers for building conversions/retrofit is that the embodied carbon in existing buildings that can take decades to make up for in a time when reduction of GHG is needed. There are also opportunities to build up from existing buildings.
12:58:01 From Emilie Charlebois (CUI) to Everyone:
COMING UP: Next City Talk will be on May 31st at 12:00pm EDT: How can we work together on the mental health crisis in our downtowns? Stay tuned for more details by signing up for our newsletter or following us @canurb
12:58:17 From Elena Bird to Everyone:
Great talk. Thank you!
12:58:18 From Alana MacKinnon to Everyone:
Thank you, such a great panel and really insightful conversation!
12:58:19 From Karol Murillo to Everyone:
Would love to see Tracy’s examples where the mix is happening? Podium are housing etc.
12:58:21 From Emilie Charlebois (CUI) to Everyone:
Canada Healthy Communities Initiative Mobilizer Session: Register now for Building the Case for Placemaking: What is it and Why Does it Matter? happening on Thursday, May 18, 2023 @ 10:00am PT / 1:00pm ET. This 75-minute session, hosted by Mitchell Reardon from Happy Cities and Mary Rowe from CUI City Talks, delves into the well-being impacts of cultivating spaces for public engagement and asks: What are we learning from our experiences over the past three years? Is there a super-power in community-driven change? How can we continue to build support for these incredible efforts?
12:58:24 From Emilie Charlebois (CUI) to Everyone:
Join us next Thursday for this free public webinar! Register here:
12:58:28 From Lorraine Hopkins to Everyone:
As someone working in Canada’s affordable housing space (at Evergreen), and I’m based in Toronto, this has been a fabulous talk, thank-you!
12:58:33 From Steven Paynter to Everyone:
normally it’ 50 yrs to “make up” the embodied carbon. On average the buildings we’ve studied account for 2 million kgCO2/e
12:58:48 From Toby Greenbaum to Everyone:
12:58:50 From Toby Greenbaum to Everyone:
12:59:01 From Karol Murillo to Everyone:
Thank you…fantastic panel!
12:59:05 From Emilie Charlebois (CUI) to Everyone:
Thank you for joining us! We have recorded today’s session and will share it online within a week at
12:59:22 From Steven Paynter to Everyone:
If anyone has follow up questions please reach out
12:59:29 From Jacquelyn West to Everyone:
Appreciating the energy and participation to bring this conversation forward, thank you Mary and esteemed panel!
12:59:39 From Jennifer Barrett (CUI) to Everyone:
@karol Murillo. Sidewalk’s building at 1660 Hollis Avenue in Halifax is a mixed-use building. There are other examples in Ottawa, Winnipeg, Regina.
12:59:49 From Washington Fajardo to Everyone:
It’s also possible to add a new layer of “natural” landscape at the rooftop of existing buildings
12:59:58 From Mary-Ann Thurber to Everyone:
Edmonton has mixed use buildings as well
13:00:15 From Barbara Maly to Everyone:
Thanks great discussion!!
13:00:21 From KATRIEN DARLING to Everyone:
Insightful discussions…thank you panelists
13:00:25 From Eva Ing to Everyone:
Thank you for the fantastic conversation !
13:00:26 From Daniel Bernstein to Everyone:
Thank you! Very informative. From NYC.
13:00:49 From Elizabeth Cushing to Everyone:
Thank you, great discussion!