The hollowing out of U.S. cities’ office and commercial cores is a national trend with serious consequences for millions of Americans. As more people have stayed home following the COVID-19 pandemic, foot traffic has fallen. Major retail chains are closing stores, and even prestigious properties are having a hard time retaining tenants.
A recent study from the University of Toronto found that across North America, downtowns are recovering from the pandemic more slowly than other urban areas and that “older, denser downtowns reliant on professional or tech workers and located within large metros” are struggling the hardest.
Over more than 50 years of researching urban policy, I have watched U.S. cities go through many booms and busts. Now, however, I see a more fundamental shift taking place. In my view, traditional downtowns are dead, dying or on life support across the U.S. and elsewhere. Local governments and urban residents urgently need to consider what the post-pandemic city will look like.
Decades of overbuilding
U.S. downtowns were in trouble before the COVID-19 pandemic. Today’s overhang of excess commercial space was years in the making.
Urban property markets are speculative enterprises. When the economy is booming, individual developers decide to build more – and the collective result of these rational individual decisions is excess buildings.
In the 1980s, the Reagan administration allowed a quicker depreciation of commercial real estate that effectively lowered tax rates for developers. With financial globalization, foreign money flowed into the U.S. property sector, especially to very big development projects that could absorb large pools of liquid capital looking for relatively safe long-term investments.
Years of low interest rates meant cheap money for developers to finance their projects. City governments were eager to greenlight projects that would generate tax revenues. In many downtowns, office space now takes up between 70% and 80% of all real estate.
The pandemic push
COVID-19 finally burst this 40-year bubble. During pandemic lockdowns, many people worked from home and became comfortable with virtual meetings. Telecommuting grew as conventional commuting declined. Workers with the resources and job flexibility moved from cities to so-called “zoom towns” where housing was more affordable and parks and outdoor activities were close at hand.
Now, many employers want their staffs to return to the office. However, workers are pushing back, especially against spending full five-day weeks in the office. New technologies have made it easier to work from home, and a tight labor market has strengthened employees’ bargaining power.
There are significant knock-on effects. A range of businesses, including restaurants, retail stores and services, rely on downtown office workers. At least 17% of all leisure and hospitality sector jobs are in the downtowns of the 100 largest U.S. cities.
In San Francisco, for example, a typical office worker used to spend $168 near their office per week. Now, with nearly 150,000 fewer office workers commuting downtown, about 33,000 people in the service and retail sectors have lost their jobs.
Terminal decline?
Today, many cities are confronting the prospect of an urban doom loop, with a massive oversupply of office and retail space, fewer commuters and a looming urban fiscal crisis. Washington, D.C., is an illustration.
In December 2022, the city had approximately 27,000 fewer jobs than in February 2020, and it faced a growing financial shortfall from declining property taxes due to downtown business closures and fewer property purchases. The District of Columbia government projects that city revenues will decline by US$81 million in fiscal year 2024, $183 million in 2025 and $200 million in 2026. Washington’s Metropolitan Transit Authority faces a $750 million shortfall because of a sharp decline in ridership.
In the Communist Manifesto, Karl Marx and Friedrich Engels famously wrote that under the pressures of dynamic capitalism, “all that is solid melts into air.” They could have been describing the ever-changing built form of the United States, with people and money flowing to Main Street stores through the 1960s, then to suburban malls in the 1970s and 80s, then abandoning malls for revived downtowns and online shopping. Now, traditional downtowns may be in similar terminal decline.
Repurposing office space
What can cities do with their surplus office spaces? In some cities, such as Columbus, Ohio, investors are purchasing deeply discounted buildings, demolishing them and finding more profitable uses for the land, such as residential and mixed-use buildings. Other options include converting commercial space into residences or more specialized applications such as biotech labs.
But conversion is no panacea. There are many regulatory hurdles, although cities are changing zoning laws to make the process easier. Many office buildings have large internal floor spaces that makes it expensive to divide them into individual residential units that all receive outdoor light. And glass-sheathed buildings with windows that don’t open are prone to overheating.
Worcester, Massachusetts, offers financial aid for small businesses that move into vacant storefronts. San Francisco is considering a proposal to convert its downtown Westfield Centre Mall, formerly home to Nordstrom and other retailers, into a soccer stadium.
In my view, the growth of commercial office complexes that has long been promoted by investors, developers and federal and city governments has probably come to an end. The nation no longer needs so much office space. It will require more community involvement to find out what people want instead. Some communities may focus on housing, while others opt for more recreational opportunities or green spaces.
The downtown filled with acres of banal office blocks, with accompanying ground-level retail stores and shopping malls, is a relic of the 20th century. It’s daunting but exciting to envision what will take its place.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
