A recent report by JLL Canada is sounding the alarm on Toronto’s Office Replacement Bylaw, warning that it could significantly impact the city’s already strained housing supply. According to the report, approximately 51,000 potential residential units may never materialize due to the bylaw’s requirement that demolished office space be replaced with new office development, even when demand for offices remains weak.
The Office Replacement Bylaw was adopted in 2003 and applies to designated areas, with the goal of preserving Toronto’s role as a business hub and ensuring enough office capacity in key districts such as the Financial District, University of Toronto area and Yonge-Eglinton, as well as within 500 metres of public transit lines.
JLL believes that the bylaw is becoming increasingly problematic in light of Toronto’s current oversupply of office space. Developers faced with the requirement to rebuild office space, even in underperforming buildings, often find these projects are not economically feasible.
