The City of Vancouver has released the long-awaited results of its 2019 study of the health of retail-zoned businesses in key neighbourhoods.
Even before the COVID-19 crisis, many of Vancouver's neighbourhoods were facing increased commercial property taxes as high as 45% and businesses vacating stores at a rate of 40%. It's unfortunate but not surprising that the report found there are now fewer independent businesses and more chains. Commercial buildings are also being bought up by numbered companies and developers, who may not always have the best interests of their commercial tenants in mind.
The research found that:
- Chains have grown 24%, while independents have reduced 13%*
- Vacancies have increased 40%
- 67% (4 of the 6 study neighbourhoods) have vacancies higher than considered "healthy"
- Commercial building ownership is becoming concentrated in the hands of developers (71% increase) and numbered companies (45% increase)
- It's getting more expensive to do business. Property tax increases in the 6 study areas range between 15% (South Granville) and 47% (Marpole) with a mean of 30%
What can be done?
According to the report some core factors for healthy retail nodes are:
- Fair and predictable property taxes and rents
- Presence of anchor tenants, including one or more retail grocery stores (or equivalent)
- Relatively low vacancy rates (typically under 10%)
- A complementary tenant mix that is appropriate for a given local shopping area’s community role
- Strong leadership and proactivity from the BIAs, including regular interface between leadership and key anchor tenants and landlords
- A clean, safe, and friendly public realm
- Accessibility by all modes, with appropriate parking supply geared to the customer base
- A sufficiently sized local trade area with a residential population and density to support local businesses
- A supportive regulatory environment including timely permitting and licensing, sufficiently flexible zoning, and streamlined points of contact between businesses and City administration
*One thing to note is that this study uses Statistics Canada's definition of a "chain" as a business with four or more locations. We don't agree with this definition, and consider any privately owned, B.C.-based independent business to be "independent" based on their local economic impact and ability to make local decisions.
Check out the Executive Summary, Full Report and Report to Council.