The federal government plans to convert more of its office buildings into apartments as Canada grapples with a housing shortage.

Jean-Yves Duclos, the minister of public services and procurement, told CTV News recently that the government needs to repurpose office buildings into residential properties as it disposes of federal properties in Ottawa. He said Prime Minister Justin Trudeau’s government has already converted some office assets into housing and will repurpose more.

“The downtown of Ottawa needs to be revitalized,” said Duclos.

Downtown Ottawa office vacancy hit a record 15.1% in the second quarter of 2023, according to a CBRE report. The federal government will need to rejuvenate and modernize its Ottawa office portfolio as a majority of leases face expiry in the next five years, says the commercial real estate services firm.

Avison Young anticipates that Ottawa’s downtown office market could get smaller as more availabilities spur utilization changes.

The government is also expected to redevelop office assets in other Canadian markets to offset the rental-housing shortage and upgrade the federal office portfolio.

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