Real estate executive Shawn Hamilton thinks the pandemic that emptied the nation\u2019s capital of thousands of federal bureaucrats could eventually breathe new life into an Ottawa downtown long mocked for \u201cthe sidewalks rolling up at four o\u2019clock.\u201d<\/p>\n
Despite using the old line to poke fun at his hometown, Hamilton says he has always been bullish on Ottawa. But he and other market experts believe the pandemic has created opportunities to reinvent the downtown with new housing and modern offices, and by selling or converting old and obsolete Crown-owned buildings that now house bureaucrats.<\/p>\n
Hamilton is a vice-president of business development with Canderel Group, manager of Constitution Square, a three-tower complex in the heart of downtown Ottawa that seems as empty as it was in March 2020 when public servants were sent home to work and wait out the pandemic.<\/p>\n
Rebirth will take time, Hamilton argues, and Ottawa won\u2019t turn into a densely populated, around-the-clock city like New York. However, less reliance on the federal government will pave the way for a downtown where people live and play, not just work.<\/p>\n
\u201cI see it as a place for vibrant urban technology<\/a> businesses, but most importantly, I see dynamic residential, and all that supports residential, in our downtown core,\u201d says Hamilton, who is also president of the Ottawa chapter of the Building and Owners Managers Association.<\/p>\n \u201cThat\u2019s the key to us moving from what they call a 12-hour city to \u2013 okay, I don\u2019t think we will be a 24-hour city \u2013 but we\u2019ll certainly be an 18-hour city. If the federal government decreases and gives some space back, it creates room for other industries to come in here and bring people with them who will be filling that space.\u201d<\/p>\n The pandemic transformed the nation\u2019s capital with an almost overnight shift to remote work, but it could take years<\/a> before the federal government gets a handle on how and where public servants will be working.<\/p>\n Each department is planning for a hybrid workforce, a mix of office and home. Some have started to slowly bring employees back, but with the Omicron variant, the timing of a full return or anything close to it is anyone\u2019s guess.<\/p>\n But on another track, the government is planning for the future of work. Automation, artificial intelligence, machine learning, digitization, data analytics, green technologies and an all-out talent war could all change work and the office. Could the public service someday be virtual with little need for office space or full-time employees?<\/p>\n It\u2019s an evolution that will permanently change Ottawa: the amount and kind of office space needed; retail and other small business near office towers; and commuting patterns.<\/p>\n No other city will feel the impact<\/a> of the federal real estate shift like the National Capital Region where the government is the largest employer and landlord. The government employs about 260,000 people in 102 departments occupying 75 million square feet of leased and Crown-owned space across the country.<\/p>\n Half of that is in the National Capital Region, where headquarters for most departments are located and where 140,000 employees went to work pre-pandemic in offices occupying 38 million square feet.<\/p>\n Will nooks and lounges replace the office in the public service?<\/a><\/p>\n The pandemic upended the federal workplace. What comes next?<\/a><\/p>\n A generational opportunity to make our cities better<\/a><\/p><\/blockquote>\n Real estate and market experts say the government will need less space and that what remains will be reshuffled from old Crown-owned or leased buildings downtown toward a network of suburban satellite offices or hubs.<\/p>\n Nathan Smith, senior vice-president and managing director of Cushman & Wakefield<\/a>, says more hybrid and remote work isn\u2019t a death knell for Ottawa but rather a \u201crebalancing of the government footprint.\u201d<\/p>\n \u201cThey\u2019re extending out of the core or renewing their footprint in locations that make sense. And light rail transit gives them the opportunity to do that outside of the core,\u201d he adds.<\/p>\n Those predictions could change dramatically if political leaders decide to decentralize the public service and spread the well-paid knowledge work across the country, which is much easier to do with remote work.<\/p>\n Transfer underway<\/strong><\/p>\n Office buildings and hotels converted to apartments, as well as new construction, added more than 3,000 units to the downtown in the past two years \u2013 more than the previous two decades.<\/p>\n \u201cWhat\u2019s happening downtown now is unprecedented,\u201d says Jason Shinder, CEO of District Realty.<\/p>\n St\u00e9phan D\u00e9ry, the senior bureaucrat overseeing the federal real estate portfolio, says the government will unload big office buildings that are at \u201cat the end of their useful life.\u201d A 2020 Treasury Board report showed more than 30 per cent of Crown-owned office buildings, are in critical or poor conditions<\/a>.<\/p>\n At the top of the list is L\u2019Esplanade Laurier, a 1970s Crown-owned office complex, which will go up for sale and could be redeveloped into apartments, condominium, office space or a hotel, says D\u00e9ry, assistant deputy minister of real property services at Public Services and Procurement Canada (PSPC).<\/p>\n The government already had too much office space pre-pandemic. On average, it was occupied 60 per cent of the time. On any given day, 40 per cent of desks sat empty with workers off sick, on vacation, at meetings or working remotely.<\/p>\n PSPC has been reducing its space for years, compressing the square footage per person to 150 square feet from 250 square feet, and taking over floor space devoted to big corner offices and personalized desks for more collaborative space.<\/a><\/p>\n But real estate contraction doesn\u2019t mean personnel reduction. Today\u2019s public service is as large as it has been in a decade<\/a>, growing more than 17 per cent since 2015. Thousands of people hired to work remotely during the pandemic have never seen the inside of an office.<\/p>\n Urban tech firms<\/a>, led by Shopify, are the second-largest user of space in downtown Ottawa. About 11 per cent of Ottawa\u2019s workforce<\/a> is now tech-based \u2013 greater than San Francisco\u2019s 10 per cent \u2013 making it one of the North America\u2019s Top 10 tech hubs.<\/p>\n Ottawa\u2019s population is expected to grow by 20,000 people a year, with a large share coming from immigration. \u201cWe\u2019ll be growing with people and a growing tech environment, and all that paints a rosy picture for the city,\u201d Hamilton says.<\/p>\n Shinder says government delays and indecision on bringing workers back to the office has left the region in limbo.<\/p>\n How COVID-19 could reshape the federal public service<\/a><\/p>\n COVID-19 and the future of public sector work surveillance<\/a><\/p>\n Bad office buildings make good residential spaces<\/a><\/p>\n What \u2013 and who \u2013 is a city for?<\/a><\/p><\/blockquote>\n \u201cThere\u2019s still no plan, it\u2019s all up in the air and nobody knows. That\u2019s got to be frustrating for government employees. It\u2019s frustrating as a landlord; frustrating for small business owners downtown. This touches a lot of people.\u201d<\/p>\n While they wait, landlords are planning based on a few key trends.<\/p>\n A fraction of federal offices has been modernized into GCworkplace<\/a>, the open, collaborative, and desk-sharing space design PSPC is rolling out. The disposal of old buildings, along with the rollover of most leases over the next five years will help speed that up.<\/p>\n Can buildings drive a green shift?<\/strong><\/p>\n The big driving force is the government\u2019s greening strategy for all Crown-owned office buildings to be carbon neutral by 2030.<\/p>\n The government is charging ahead with overhauls of large complexes such as Place du Portage Phase III, Les Terrasses de la Chaudi\u00e8re and Global Affairs Canada\u2019s headquarters, the Lester B. Pearson Building, to help reduce greenhouse gas emissions.<\/p>\n The government also set a target for 75 per cent of its leased building to be carbon neutral by 2030. None comply now. That didn\u2019t stop investors from recently paying $350 million for the massive 50-year-old Place de Ville complex \u2013 considered the second largest deal<\/a> in the city\u2019s history. The government is the main tenant, including Transport Canada, which has indicated a work-from-home policy<\/a> by default for the foreseeable future.<\/p>\n