A few years from now, Bernie Myers will be able to see the entrance to Ottawa’s Lyon light-rail transit station from Morguard Corp.’s regional office on Sparks Street.
“It’s going to be great,” says Mr. Myers, Morguard’s top executive for Eastern Canada, who manages a commercial property portfolio of five million square feet – one of the city’s largest. Not only will rapid transit get buses off the streets, he says, but it will bring new opportunities to people who want to work downtown.
“It’ll be easy to attract a diverse group of employees,” he says, bringing both walking urbanites and far-flung suburban homeowners to businesses downtown. Whether it will tangibly boost property values in the capital, though, is a question that’s best left to time.
“It takes time for a system to be large enough to have that impact,” he says.
By making it easier to get to the core while creating attractive development opportunities around stations in suburban areas, the LRT will help change the way people work in Ottawa. Set to open in 2018, the transit system is expected to accelerate the movement of the city’s largest tenant – the federal government – to newer buildings, largely outside of the core, opening up more space downtown. But it’s unclear how quickly this will happen: While developers plan to play the waiting game, the City of Ottawa is doing everything it can to get people building along the line.
The city’s Bus Rapid Transit (BRT) system is one of the biggest of its kind in North America, but it’s long been overcapacity. The new 13-station light rail “Confederation Line” will replace 12.5 kilometres of the BRT’s central east-west route, from Blair Road to Tunney’s Pasture, including 2.5 kilometres underground through downtown. The $2.1-billion project is hoped to be the first line in a network of light rail throughout the city.
In spite of the city’s best efforts, development around the non-core BRT stations never intensified. Ottawa’s planning chair, Councillor Peter Hume, hopes to correct that .
“The success of our program will be defined by how much intensification we get around these transit stations to drive ridership,” Mr. Hume says. “No question, it’s a gamble.”
To do that, the city is making it as easy as possible for developers to start building, including by prezoning land around the stations for high density.
“We need to see this start to happen in the five- and 10-year time frame to critically say it’s been a success,” Mr. Hume says. And if Ottawa developers hesitate within that window, “we’re prepared to go and pitch our opportunities to developers across the country.”
Ottawa’s LRT boosters often point to the Yonge subway line in Toronto, where the streets around Eglinton and St. Clair stations have significantly intensified since the subway line opened in the 1950s.
Seventy years, though, have elapsed since then, making developers and urban planners alike hesitant to believe Ottawa’s LRT will give an immediate boost to density around stations. And not all Toronto subway stations have led to greater density: The land around many stations on the city’s Bloor-Danforth line, even just outside of the downtown core, hasn’t intensified at all.
George Dark, an urban designer and partner with Toronto consultancy Urban Strategies Inc., says that Ottawa’s detailed plan should help it avoid Bloor-Danforth-style problems. “What Ottawa’s done is the opposite,” he says, and it’s “sending clear signals for development.”
Driving the charge to develop along the LRT will be the federal government, which is naturally Ottawa’s biggest employer. “I would describe the line as a public-sector-driven light-rail project,” says Kelvin Holmes, managing director of Colliers International’s Ottawa office. The light rail line, he says, will allow governments to easily move employees or departments station to station.
The government is trying to update its civil service work place, launching the Workplace 2.0 program that opens up office spaces and shrinks the amount of floorspace per employee. It also involves moving to greener, Class-A office space, which in many cases means moving out of Ottawa’s downtown B- and C-class buildings. LRT stations will offer a natural place to put these offices while keeping employees a stone’s throw from transit and, in turn, the core.
The rail line will change the way a huge number of Ottawans live and work. While new developments will cluster around suburban stations, the LRT should directly boost the value of the properties on or near the underground downtown stations, too, says Frannie Heeney, a market intelligence co-ordinator with Colliers in Ottawa.
In a report published last month, Ms. Heeney wrote that demand for both residential and office space in the core should grow with the LRT, boosting property values and rental rates – especially within 400 metres of station entrances. People want to live downtown, or at least work there, but buses and parking can be frustrating – LRT will make either option easier.
The much-discussed future network of underground shops and businesses next to the stations, like Toronto’s PATH system, will only further boost property value. Light rail may also encourage more amenity-focused businesses to locate in the core, as far-flung residents have easier access to the core, Colliers says.
The office vacancy rate in downtown Ottawa rose to 8.8 per cent in the first quarter from 6.9 per cent a year prior. While government departments are vacating some of their space in the core, Ms. Heeney says it will give smaller, private companies an opportunity to move into “really interesting space in the downtown.” Meanwhile, more distant office spaces in transit-barren industrial areas will likely see greater vacancy in the coming years.
A bustling downtown makes sense to Mr. Myers, who manages $1.8-billion worth of property in the city through Morguard. “A lot of people like to work downtown because of the vibrancy, the sense of being where the action is – more so, probably, in this city because of the Hill.”
But he isn’t ready to quantify the LRT’s impact. “We’ll have to wait and see.”