Why is the City of Toronto downsizing its office space? Millennials have something to do with it

How many square feet people are willing to live in has been shrinking for years, and now their offices are shrinking too.

The City of Toronto announced Wednesday it will reduce the office space it leases and owns by 25 per cent over five years, for savings of $30 million a year — and in doing so became part of a North American trend. 

“Clients are coming to us because of wanting to be smarter about how to use their real estate,” said Angie Lee, global workplace sector leader for Stantec, a global design firm.

“Real estate is generally the highest capital expense outside of people, it just makes perfect sense.”

She said her firm was recently able to create a smaller footprint for a big-city tech company, and to reduce the amount of space occupied by a firm in Chicago by an entire floor, resulting in millions of dollars in savings for each of the clients.

The City of Toronto expects to save $750 million over the next 25 years, and liberate eight city-owned buildings for other uses, including community housing. The move will affect 3,930 City of Toronto employees, including 1,630 from the eight city-owned buildings and 2,300 occupying leased office spaces. The changes will be made over five years. 

For most companies, downsizing their office footprint isn’t just about the money saved, said Lee.

Millennials are fast becoming the dominant demographic in the workplace, and they have different expectations, Lee said. With tech getting smaller all the time, millennials are fine with smaller personal workstations, but they want more from their offices than a desk and a filing cabinet.

They want spaces that are tech-enabled, they want a hub where they can socialize with co-workers, rooms where they can meet as a group, offices that provide privacy when they need it, and furniture and spaces that promote wellness, including easily accessible stairs so they don’t have to take the elevator if they want to walk.

Companies are also less willing to maintain big offices for managers who are rarely in them, said Kevin Katigbak, senior workplace strategist at Gensler, an architecture and planning firm.

Office design is something tech companies like Uber think about a lot. Uber Canada employs 250 employees across five floors at its new Toronto office at 121 Bloor St. E. The office features 60 flexible conference rooms, eight team spaces for smaller meetings and 13 phone booths for quieter conversations. There is a library on the 12th floor, two outdoor terraces and a gathering space on the 16th floor.