Transforming towers: Might Calgary convert vacant downtown offices into condos?

With office vacancy rates in downtown Calgary at an all-time high, could our city take a page from Pittsburgh and turn commercial buildings into condo or apartments?

Developers in Pittsburgh found financial benefit in converting older office buildings into residential units

U.S. Steel Corp. headquarters building in downtown Pittsburgh. The city made it easier for business to convert downtown office buildings into residential suites in the early 2000s. (The Associated Press)

With office vacancy rates in downtown Calgary at an all-time high, could our city take a page from Pittsburgh and turn commercial buildings into condo or apartments?

Michael Glass, an instructor of urban studies from the University of Pittsburgh, spoke to the Calgary Eyeopener about why it worked for the American city.

Q: How did this happen? Why did your city decide to convert offices into residential space?

A: Similar to Calgary at the moment, there was a vacancy issue. Pittsburgh was very much a "9-to-5 downtown" and there was a sense that in order to revitalize the downtown, attracting businesses alone wasn't going to to do it, retail was fading downtown so why not get a core constituency of residents downtown and hopefully have that spur demand for business to follow in the future.

Q: What kind of commercial buildings were a part of this?

A: Not your gleaming glass towers — the ones might be 40, 50 ,60 years old that may not have modern services [such as elevators] yet have a lot of historic character, so you don't want to tear them down.

Q: Calgary's Class B commercial real estate vacancy rate is at 32 per cent. Who moved into these spaces?

A: I categorize them in two groups: empty nesters who may have raised their children in the suburbs who might want to move in closer to work and all the cultural amenities offered in the downtown area. The other, students attending one of the universities located downtown whether it was mom and dad buying the condo, or a rental.

You don't get too many families downtown, it was usually the younger or the older.

Q: Who led the charge on this? Was it business owners or city government?

A: There had always been individual investors interested in converting old office space into loft apartments. In order to get this happening on a greater scale, the city government stepped up by proving tax incentives for people buying condos, and giving tax abatements to developers.

A pedestrian walks past a sign advertising office space for lease in downtown Calgary. (Jeff McIntosh/The Canadian Press)

Already saturated

Q: Here in Calgary, our condo market is already saturated. Does there have to be demand for housing in order for this to work?

A: There does need to be some demand. If you build it but there's no market for it, all you're going to be doing is spending good money and not getting any return for it.

I would say there is no real long term harm in attempting to stabilize those structures and get some tax revenue out of conversion to residential.

If the commercial market picks up again, then those could be converted back to commercial uses. I don't imagine any zoning changes required.

Q: But most of these buildings weren't built for full time human habitation, how difficult is it to convert an office building into a residential space?

A: If you think about it, the main features that you need, plumbing, access to transportation is all there.

Developers found it was actually more difficult to modernize old Class C buildings to attract the needs of modern companies, than they did converting it into condo or apartment spaces.

With residential uses, you are at least getting something for that property.

Downtown revitalized

Q: What has been the long-term impact?

A: More nightlife, especially in the summer and later in the evenings. This helps with crime in terms of just having more people about. 

It also helps businesses — restaurant and cultural districts in Pittsburgh say they are both doing well because of the resident population that wasn't there 15 years ago.

With files from the Calgary Eyeopener