Downtown Toronto's pandemic recovery lags behind other cities, data shows

Toronto's downtown is lagging behind many cities in North America when it comes to its recovery from the COVID-19 pandemic and two of the key culprits are commercial leases and commute times, according to data from the University of Toronto's School of Cities.

Toronto ranks 55th out of 63 North American cities included in the school's downtown recovery ranking, which uses cell phone data to compare activity in the downtown core to pre-pandemic levels. From December 2022 to February 2023, cellphone activity in downtown Toronto was at 47 per cent of activity compared to pre-pandemic levels.

But the school's director, Karen Chapple, is optimistic the city's core will bounce back.

Chapple said part of what's holding Toronto's recovery back is the termination of commercial leases.

"Commercial office leases are coming up and people are making that decision to finally give up on that downtown office space or reduce the amount of office space they're using downtown," she said.

Such leases usually last about 10 years, said Chapple. Since the onset of the pandemic, only about 38 per cent of them have come up for negotiation, meaning the future of the other 62 per cent has yet to be seen.

"We're actually likely to see a continued downtrend as long as people are giving up on their office space, unless we can counteract it with more tourist activity, with more residential activity, with more visitor activity. And those could very well be the saviours of downtown," she said.

How downtown could bounce back

Chapple says she doesn't think Toronto will suffer an "urban doom loop" — the idea that a reduction in work in a city's central business district will result in less foot traffic and lower municipal revenues.

"What's going to happen is [real estate] prices are going to have to come down slightly, rents are going to have to come down slightly and then you'll start to see different types of uses come in," she said.

This could create opportunities for organizations like non-profits who were once pushed out of the downtown to move back in, she said.

"There's going to be an upside here as commercial office space prices come down," she said.

Jennifer van der Valk, president of communications and public affairs with the Toronto Region Board of Trade, said there's an opportunity for business leaders and policy makers to reimagine what office space is used for in the downtown core.

"Particularly sectors like digital media, television production, life sciences and innovation in general are areas where we really could look to rethink, reimagine and recreate how our downtown is used, and that will contribute to how we recover," she said.

Commute times also impacting downtown recovery

Another issue hindering recovery, particularly in Toronto, Chapple said, is commute time.

Toronto's is one of the longest in North America on average, she said. That slows recovery because it causes people to want to stay home.

The average commute time from December 2022 to February 2023 in Toronto was 36.31 minutes. In Salt Lake City, Utah, which had the strongest recovery of any city included in the data — at 139 per cent of pre-pandemic activity, the average commute time was 20.64 minutes.

The Canadian city with the shortest commute time was London, Ont., at 25.77 minutes. London's recovery was at 73 per cent.

Part of what fuelled recovery in that city is its economy, Chapple said.

"It's a really boring economy. It had government, health, and education downtown, it didn't have any of those high-wage, high tech-jobs," she said.

In cities that have managed to bounce back despite having a large professional workforce, like New York City, which was at 75 per cent of its pre-pandemic activity, downtown entertainment and tourism is a large driver, Chapple said.

But most cities that are bouncing back aren't relying on tech, professional and managerial workers to bring activity downtown, she said.

"If you have a lot of law firms or accounting firms or management consulting firms in your downtown, those folks don't need to be together to be productive."