The City of Calgary is intensifying its initiative to transform vacant downtown office spaces into residential and commercial properties. At a news conference held in the Beltline, Mayor Jeromy Farkas announced nine new office-to-residential conversion projects that will add nearly 1,000 homes to the city’s core.

These projects will repurpose 947,000 square feet of former office space into 972 housing units, along with a hostel located on 5th Avenue S.E. Mayor Farkas highlighted the progress made since the city council set a goal nearly five years ago to convert six million square feet of empty office space into various uses, including homes, hotels, and community spaces. "And today, I’m excited to share that we are nearly halfway there," he stated.

The city’s incentive program plays a crucial role in this effort, offering downtown property owners a subsidy of $75 per square foot, with a maximum of $15 million, to encourage the repurposing of unused office buildings. This program is part of a broader 10-year strategy approved by a previous city council in 2021 to revitalize Calgary’s downtown, which has faced challenges following a significant decline in commercial property values after the 2014 oil price crash.

Since the launch of the incentive program, the city has invested over $200 million to facilitate office conversions. This investment has reportedly attracted nearly $800 million in private sector capital, resulting in a total economic impact of approximately $1.4 billion. To date, six office conversions have been completed, yielding 490 new homes and 226 hotel rooms in the downtown area.

Alecia Peters, manager of the city’s downtown business strategy, noted that the incentives have enabled 21 office retrofits, which will ultimately transform 2.68 million square feet of office space and create 2,655 new housing units. The city aims to reduce the current downtown office vacancy rate, which is around 30 percent, to 20 percent by 2031.

"We’re projecting that if we remove the six million square feet of office space, we anticipate that’s going to be about a 10 percent impact," Peters explained.

The demand for the downtown incentive program has consistently exceeded expectations. After the initial budget of $153 million was fully allocated, the program was paused in October 2023 but was revived with an additional $53 million less than a year later. The latest application window closed on October 31, 2024. City council is set to discuss an additional $40 million in funding for the program during the upcoming 2026 budget deliberations.

Mayor Farkas defended the downtown incentives, stating they provide significant value for money. "When you think about the total economic benefit, it brings it up to about a seven-to-one investment," he said.

Ian Pinchin, director of development for Crestpoint Real Estate Investments, also spoke at the announcement. His firm is utilizing the city’s incentives to redevelop the former TransAlta headquarters on 12th Avenue S.W. Crestpoint’s project will convert 133,000 square feet of office space and is expected to receive nearly $10 million in incentive funding. The development will deliver 488 new rental units by 2028, including 73 below-market units.

Pinchin emphasized the importance of certainty in the private sector, stating, "The city’s incentive program is so effective because of its simplicity and transparency. Knowing our costs and the incentive expectations up front has allowed us to reduce uncertainty and give us the confidence to develop two towers simultaneously, which is something we would not have been comfortable doing without the city incentive."