4 hours Ago By Hiren Mansukhani
“The West End is the place to be,” Mark Garner, president of the Calgary Downtown Association, recently declared, while marking the opening of an apartment building that once housed offices. Garner captured a sentiment that pushed the city to launch a plan four years ago to lure Calgarians to live downtown, which had for years been struggling with high vacancy rates. By 2021, soaring office buildings once home to hundreds of companies powering the country’s economy had become a shell of their former selves — buffeted first by the oil crash in 2014 and then by the pandemic.
The office vacancy rate in the city spiked from 9.8 per cent in 2014 to more than 33 per cent in 2021. The slump in the energy industry triggered an exodus of workers from downtown, a trend that reached a peak during the pandemic, when many began working from home.
The city was facing a phenomenon urban theorists refer to as the doom loop: as people stop using office spaces, the economy built around those occupants — such as stores and restaurants — also begins to fade. The area then grows emptier until it becomes undesirable for people to set up offices there, and the cycle continues. Calgary wasn’t the only one in such a predicament.
Many cities around the world suffered a hemorrhage of workers from their downtowns. Meanwhile, housing costs were outpacing salaries. The vacancy rate in the city was 5.
1 per cent in 2021. By the next year, the rate would plummet to 2.7 per cent, driven by a wave of migration and a lower housing supply.
The number would fall to 1.4 per cent in 2023, further pushing up house prices and pitching Calgary into an affordability crisis. Before the housing challenges unravelled, city council in 2021 received a plan to resuscitate Calgary’s core .
The blueprint, which envisioned funding of $200 million, encompassed housing, business, retail, education and arts. Among the recommendations was an ambition that hadn’t been tested on a large scale before: converting office buildings into residential spaces. The idea had been floating for a long time.
However, skeptics dismissed it as being too expensive and complicated, albeit cheaper than building from scratch. The city report — guided by real estate mogul Hannes Kovac and Trent Edwards, who oversees global investment firm Brookfield’s Canadian residential portfolio, both of whom chaired the city’s Real Estate Sector Advisory Committee — stated that doing nothing would be much worse for the city. “The status quo scenario is the biggest risk to downtown vibrancy, Calgary’s economic competitiveness and fiscal sustainability.
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