Mayor’s State of the City Address to include incentive plan for downtown office building conversions to residential

On the eve of the mayor’s State of the City Address, CTV News has learned that Josh Morgan intends to announce a plan that would convert vacant downtown office space into residential units.

The annual speech to about 1,200 local business leaders will take place Thursday morning.

Operating as a Community Improvement Plan (CIP), the conversion program would offer financial incentives to building owners.

Almost 30 per cent of the office space in Downtown London is vacant.

Housing advocate Abe Oudshoorn explained the benefits of converting vacant office space into homes, “Office to residential conversions are just a win-win all around. We know we have vacant spaces downtown and we know we have people who are desperate for housing.”

In 2021, the City of Calgary launched the country’s first Office Conversion Program.

It has already approved 13 conversions, and four more proposals are under review.

Those projects total 2,300 new residential units that will revitalize 2.3 million square feet of vacant office space.

The Calgary program provides a financial incentive of $75 per square foot—and caps the total amount of municipal funding awarded to each project.

Morgan is expected to provide some financial details of a London CIP during his annual address.

Oudshoorn said municipal contributions can offset some of the financial risk of converting a building to residential use, “Renovations can be a quicker way to get things done, but it doesn't mean it’s easier. When you start working on a building there are a lot of things that need to be done, [such as] plumbing, insulation, those sorts of things.”

During the 2022 election, Morgan's campaign platform included the creation of targeted Community Improvement Plans that would financially incentivize high-density residential development in the downtown and other appropriate areas.

During his first State of the City Address, he briefly mentioned the potential of a CIP program for office conversions - leading to a spontaneous round of applause from the audience.

Oudshoorn believes being a financial partner in a conversion would give city hall leverage to negotiate a percentage of affordable units with below-market rents.

“If the city is partnering on the development of these conversions, then that gives them an opportunity to talk about affordability, to set some of those apartments at a rate that are going to help us reach our affordable housing goals,” he explained.

The Mayor’s State of the City Address will be held on Jan. 25 and is hosted by the London Chamber of Commerce.

You can watch the full address live on our website at 8 a.m.