CONVERSATIONS THAT MATTER
Walk down Vancouver’s Robson Street these days and you’ll see store after store papered over. The businesses that used to occupy the spaces are gone. The shops have “For Lease” signs on them.
Those businesses shut down because the cost of rent has skyrocketed.
An expert blames, in part, the province’s foreign-buyers tax on residential properties.
That “go home” tax didn’t make foreigners seriously intending to invest in Vancouver walk away; they merely shifted their focus to commercial real estate.
There are no empty home taxes and no foreign owner taxes on commercial and industrial real estate. It is easier to manage, easier to invest in and easier to lease that office building or a retail store, yet owners still get the uplift of a land value appreciation they wanted in investing here, says Andrey Pavlov, a professor of finance at SFU’s Beedie School of Business.
That shift in focus, he points out, is driving up commercial property values, which in turn drives up rental rates and property taxes.
Tenants are not only hit with rising rental rates, they are also responsible to pay the increased property taxes, which is driving many independent businesses out of business.
The only companies that can afford the rent are national and international chains which charge more for their goods in Vancouver than in any other North American city.
Along the way, the very soul of Vancouver’s retail market is disappearing along with thousands of jobs.
We invited Pavlov to join us for a Conversation That Matters about the unintended consequences of a tax when government forgot to look at the downstream effect it would have.
Simon Fraser University’s Centre for Dialogue presents Conversations That Matter. Join veteran broadcaster Stuart McNish each week for an important and engaging conversation about the issues shaping our future. Please become a Patreon subscriber and support the production of this program at goo.gl/ypXyDs