The owners of vacant storefronts in Vancouver could find themselves facing another tax, similar to the one imposed on empty homes in the city, if the provincial government gives the idea the green light.
A majority of Vancouver city council voted Tuesday to ask the province to explore the measure, in an effort to target property speculators.
“Investors are buying commercial property, sitting on them, waiting for them to deteriorate,” Mayor Kennedy Stewart argued as the measure was debated.
In Chinatown, where the commercial vacancy rate sits around 18 per cent, the proposal has met with a less than enthusiastic response.
“To consider this as being an issue of speculation is just ridiculous,” Jordan Eng, president of the Chinatown Business Improvement Association, told Global News.
“The city should really look at themselves, and look at how they’re handling their own real estate when you have the Chinatown parkade that has a 73 per cent vacancy within the parkade plaza.”
The property Eng is referring to is the city-owned Chinatown Plaza at 180 Keefer Street. Assessed at $14.7 million in 2021, more than half of the commercial units sit empty.
Other Vancouver BIAs say red tape and escalating property taxes are to blame for commercial vacancies.
“(Businesses) occupy seven per cent of the property and they pay 43 per cent of the taxes. This is the problem,” said Neil Wyles, executive director of the Mount Pleasant Business Improvement Association.
“The city needs to get their house in order before they look at something like a vacancy tax.”
Wyles said the city should prioritize issues like the wait for permit approvals, which can take months or years to approve.
Stewart insists any potential tax would only target speculators, and would not apply to the city’s vacant properties or “good” landlords.
“We definitely do not want to punish property owners that are trying their hardest to improve their properties and have businesses open,” he told Global News in an interview.
“If we do it right we’ll lower rents for business owners and that’s what’s important here.”
Paul Sullivan, a property tax agent with Ryan ULC, told Global News he wasn’t aware of any leasing agents holding spaces vacant to speculate on the market.
“To suggest that people would prefer to pay their mortgages out of their pockets than through investment income with tenants is ludicrous,” he said.
“It is just not reality.”
For the time being, the controversial proposal will remain an idea only: the city does not currently have the power under current law to enact an empty stores tax.
As with Vancouver’s empty homes tax, the provincial government would have to amend the Vancouver Charter to empower the city to act.