THE CHALLENGES OF CONVERTING COMMERCIAL REAL ESTATE PROPERTIES INTO RESIDENTIAL BY STACEY NEWMAN
To address Canada’s ongoing housing crisis, the notion of converting commercial real estate properties into residential often emerges as a potential solution. The reality is that rezoning from commercial to residential use is a complex process involving municipal approvals and public consultations. 42
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In this article, STAY Magazine explores the primary reasons why such conversions are not as simple as they might appear, with acknowledgements to Brian Flood, EVP and practice leader of hospitality and gaming at Cushman & Wakefield for his insights and assistance. ZONING AND REGULATORY HURDLES
One of the most significant obstacles is zoning. Commercial properties are often located in areas zoned for business activities, not residential living. Changing the zoning designation of a property requires navigating through complex municipal regulations and often involves lengthy public consultations and hearings. According to the Canada Mortgage and Housing Corporation (CMHC), “Zoning by-laws regulate the use, size, height, density, and location of buildings on properties.” Another major challenge occurs when the municipal infrastructure is not in place for residential such as city services, schools and parks etc.