Can we be coaxed back to the core? A new study sizes up the daunting challenge facing Toronto’s downtown
As COVID-19 cases dwindle and vaccination numbers climb, businesses are slowly but surely preparing to see their offices become a hive of activity again.
But in the usually bustling downtown core of Toronto, just how many workers will be returning to the office towers — and how best to keep them safe — is still an open question.
According to a new study from the Toronto Region Board of Trade looking at five different business districts across the Greater Toronto Area, the “Metropolitan Core” has taken the hardest economic hit from COVID, and faces some of the toughest challenges in getting back to a new normal.
Luring workers back to their office towers after a year of working from home, and bringing back tourists and business travellers, are vital to ensuring a strong rebound, according to the report’s author.
“People need to be able to feel safe,” said Marcy Burchfield, vice-president of the board’s Economic Blueprint Institute, who wrote the report, entitled “From Crisis to Opportunity,” to be released Wednesday.
Roughly 550,000 workers per day would come into the downtown core per day pre-COVID, Burchfield said. With office towers — and the businesses that cater to them — largely empty for the better part of the year, that daily flow has slowed to a trickle.
“It’s the area which has been the hardest hit,” Burchfield said. Meanwhile, in the “Goods Production and Distribution District,” which includes Peel Region, the biggest impact has been on the health of workers in the area’s warehouses and manufacturing plants, which have largely seen business carry on uninterrupted during the pandemic, the study found.
Making downtown workers and travellers feel safe in a world slowing emerging from COVID means spreading them out, said Burchfield. That could mean varying standard office hours, a hybrid model where people work from home a few days a week, or using technology to book elevators and desk space.
Businesses are already starting to plan how to reopen their offices, with many expecting to have at least some workers back at their desks by fall, Burchfield said.
“The first piece is deciding who comes in and when. You can definitely space out the workday,” said Burchfield.
Fewer people coming into heart of the city on any day means an economic hit to the area, said William Strange, a professor of business economics at the University of Toronto’s Rotman School of Management.
“If you’re in the downtown core eight fewer hours per week, that’s less time where you’ll be spending money in the core,” said Strange, who studies economics of urban areas in the U.S. and Canada.
Already, some of those economic effects are being felt. A recent paper Strange co-authored found that during the pandemic many U.S. cities saw prices for downtown office real estate fall, while prices outside of the core rose. (Though that effect, he noted, was less pronounced in car-focused, more spread-out cities such as Dallas.)
“If the work can be carried out effectively outside of the office, there is less demand for central business districts. The evidence so far is suggesting not an abandonment of central business districts, but instead a weakening of their appeal,” Strange wrote.
During the pandemic, roughly five million Canadians across the country worked from home — up from the pre-COVID total of two million, said Pedro Antunes, chief economist at the Conference Board of Canada. If even a relatively small fraction of the extra three million continue working remotely once COVID restrictions are loosened, the long-term consequences could be massive for the city which drives much of Ontario’s — and Canada’s — economy, said Antunes.
“If there are even 15 per cent fewer people coming into the downtown core regularly, that will have a huge impact on those businesses which cater to them. It would have an impact on the market for office space. This could be a dramatic restructuring of the downtown economies,” said Antunes, adding we won’t know for a while exactly what the full impact will be.
“It will probably be a couple of years before we really get a complete picture of what the new normal is,” said Antunes.