The Work-From-Home (WFH) model became a necessity during the COVID-19 pandemic in 2020, as lockdowns forced many employees to work from home. Although the lockdowns officially ended in 2022, many companies have continued to adopt WFH policies or transitioned to hybrid models, where employees work in the office part-time.
As a result, demand for downtown commercial office space has significantly declined. In Hamilton, for example, the vacancy rate for commercial office spaces has reached 18.2%, leading to fewer economic opportunities in the city.
Commercial landlords are struggling to attract tenants to their office spaces. Additionally, the high costs of building conversions and a lack of expertise in residential development and property management have made it challenging for landlords to pivot. Many have opted to wait for the market to improve, leading to continued underutilization of these properties.
In response, Hamilton City Council has launched a pilot program to provide grants and incentives to commercial landlords to support the conversion of office buildings into residential units or hotels. This initiative aims to help landlords find more profitable uses for their underutilized properties while addressing the city’s housing shortage.
By converting these buildings into residential apartments, the program will increase the city’s housing supply. Offering the option to convert spaces into hotels will also attract major conventions and events, drawing visitors and preventing overflow into neighboring suburban areas like Stoney Creek and Ancaster.
The City of Hamilton has allocated $2.5 million to fund the program, with grants of $10,000 per studio unit and $20,000 per three-bedroom unit. The program will run throughout the year, with a review scheduled for the fall of 2025.