As cities and towns across Canada age and evolve, old buildings become outdated or are no longer needed for their original purpose. Neighbourhoods also evolve - what was once a warehouse or industrial district near downtown becomes a trendy upscale place to live. What was the wrong side of the tracks is now the right side, meaning low-income housing is being replaced by upscale homes. One of the key issues facing cities and towns across Canada today is how to provide affordable housing.
Karine LeBlanc, Media Relations Officer with Canada Mortgage and Housing indicates that “CMHC provides provinces and territories with funds through the Investment in Affordable Housing program which gives them the flexibility to invest in a range of affordable housing programs and initiatives to meet local housing needs and priorities. Initiatives can include, for example, new construction, renovation, homeownership assistance, rent supplements, shelter allowances, and accommodations for victims of family violence.”
One way CMHC has identified to create more affordable housing is adapting old non-residential buildings into housing. While there are no specific limitations on the types of non-residential buildings that may be converted to residential use, certain types of buildings lend themselves more easily to conversion - old schools, hospitals, offices, motel and hotels buildings can be converted into apartments. Warehouses and factories are suitable for open concept live-work spaces.
CMHC studies identify seven advantages of converting non-residential buildings into housing including; construction costs are usually lower, housing is delivered faster, less stress and resistance from the neighbours, opportunity for historical preservation, neighbourhood revitalization and environmental friendliness given reuse of materials and building.
The key barriers to conversion from CMHC’s perspective may be; difficulty in obtaining traditional financing, additional time for design, land use changes and building permit approval, expensive environmental cleanup, loss of employment in community and unexpected problems in construction.
Lessons Learned From the Netherlands
One of the most objective and comprehensive studies of the feasibility of converting non-residential buildings into housing was conducted in 2014 in Europe. The “Adaptive reuse of office buildings: opportunities and risks of conversion to housing” study looked at 15 buildings in the Netherlands, all of which were office building conversions to housing.
The study found the advantages of conversions were, preservation of the unique heterogeneity of architecture in a neighbourhood, office buildings are constructed to carry more weight than housing, in most cases additional floors could be added to improve the economic feasibility of the project. In addition the study identified the reuse of a building that is vacant and derelict as positive outcome, as well as, adds diversity to the housing inventory of the community, which attracts new and diverse residents.
On the negative side the study showed, older buildings don’t meet modern building code, which often leads to major renovations to both the exterior and interior of building and residential buildings require more vertical shafts for electricity, water and plumbing than office buildings especially after 1965 when pre-stressed concrete was used which loses its strength when cut. Another major barriers were the fact that many older buildings lack parking, green space and balconies, all required to create attractive residential buildings. In addition, their low ceilings don’t allow for the higher ceilings that are the norm in modern residential development today. Like the CMHC study, the Netherlands research found cost overruns as a result of slow approval process and increased hours spent developing solutions to unforeseen problems as key issues faced in office building conversions.
The authors concluded in all 15 cases, the success factors for the conversion of offices to residential buildings were - low purchasing price, adaptable floor plan, government subsidies, purchase and conversion by housing associations that in general work with long-term investment scenarios and do not require profit-maximization
A municipality may use several approaches to encourage the conversion of non-residential buildings for the purpose of affordable housing. These approaches include adopting flexible zoning policies such as those for mixed-use developments and live-work spaces and allowing residential conversions as a permitted or conditional use in appropriate commercial or industrial zones.
Other municipal led initiatives include, undertaking an inventory of vacant public and privately-owned buildings that may be suitable for conversion and notifying affordable housing providers about publicly owned, non-residential buildings that are suitable for conversion and offering these buildings to such providers on favourable terms.
Critical to successful adaptive reuse projects is providing technical assistance from building inspectors and planners to groups interested in converting non-residential buildings into affordable housing. And finally, providing tax exemptions, fee exemptions, waivers, reductions, grants or other financial incentives
CMHC Case Studies
Regina’s Renaissance Retirement Residence
In early 2005, the Derrick Building was an abandoned city-owned, five-storey office building in Regina, unoccupied for 15 years. By late 2006, it was transformed into a seven-storey seniors’ residence with a mix of market and affordable units. The conversion of the building into the Renaissance Retirement Residence was carried out by a private company with support from all three levels of government.