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 empty; the shops have “For Lease” signs on them.
Those businesses shut down because the cost of rent has skyrocketed in harmony with the skyrocketing value and subsequently the skyrocketing property taxes of commercial real estate – a market that was ignited when the Provincial Government introduced the “Foreign Buyers Tax” on residential properties.
To people looking to invest in Vancouver Real Estate, the “go home” tax didn’t make them walk away from owning land in Greater Vancouver; they merely shifted their focus. They were able to do this because the Province’s publicity infused, vote getting campaign designed to cool the housing market didn’t include a “stay out of BC” clause on commercial real estate.
There are no school taxes, no empty home taxes, no foreign owner taxes on commercial and industrial real estate. Human beings did what they always do, they simply adapted to government policies and found ways around the rules in an effort to meet their own needs.
In doing so they are driving up commercial property values, which in turn drive up rental rates and property taxes. Tenants are not only seeing rising rental rates, they are also responsible to pay the increased property taxes which in turn are 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 Andrey Pavlov, a Finance Professor at the Beedie School of Business to join us for a Conversation That Matters about the unintended consequences of a tax that forgot to look at the downstream effect it would have.
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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