British Columbia

Small businesses struggle to stay afloat in Vancouver amid rising rents

It's no secret land values are soaring in Vancouver, and, in some neighbourhoods, including popular shopping areas around Commercial Drive and Main Street, small independent businesses are paying the price.

Empty store tax, rent control protection and a voice at the table — small businesses look for solutions

Much and Little is facing an almost 80 per cent rent increase. (Sarah Savoy/Much and Little)

It's no secret land values are soaring in Vancouver, and, in some neighbourhoods, including popular shopping areas around Commercial Drive and Main Street, small independent businesses are paying the price.

Sarah Savoy, owner of Much and Little on Main Street, is facing an almost 80 per cent rent increase, while the stores surrounding her business have remained empty for years.  

She wants to see an "empty storefront tax" introduced to prevent landowners and developers from sitting on properties as rents around the neighbourhood increase and small businesses go under.

"Empty storefronts do nothing for a neighbourhood," she said. "Why not tax the property owner, create the incentive for them to set the price for something fair yet competitive."

Supporting small businesses is good for everyone in the neighborhood, she told CBC Early Edition host Stephen Quinn.

"The landlord makes some money, someone can run a business and the community benefits," she said.

"It’s scary, I think the general climate out there is not small business friendly," says Sarah Savoy, owner of Much and Little on Main Street. (Ash Kelly/CBC)

Rising rents

Businesses need better rent protection from all levels of governments, said the executive director of the Commercial Drive Business Society, Nick Pogor.

In some cases, increases in property assessments are driving rents up because the extra tax cost is passed on to the tenant.

Rezoning bylaws play a role. A two-storey building zoned to allow more stories to be built, for example, is assessed at a higher value, Pogor explained.

"It's a bit of an anomaly in the way that property owners are taxed," he said. "The property owners are essentially paying tax on empty space."

Impact of urban planning

In the Commercial Drive neighbourhood, a new community plan came into effect last year that rezoned some properties.

Kent Munro, the assistant director of planning for midtown at the City of Vancouver, was involved in the Grandview Woodland plan that aims to increase density in the area by 30 per cent over the next three decades.

"It's one of the only communities in the City of Vancouver that has lost population in the last 15 years," he said. "That's not a healthy sign for a community."

He said the plan is to draw in more people to the neighbourhoods, not to push businesses along the Drive out.

"Commercial areas do change and evolve," he said. "It's important for communities to keep up and keep changing and let that evolution happen."

Double edged sword

Darcy Houser has owned the 24-hour Super Valu grocery store on Commercial Drive for almost 20 years.

"Density for us is probably a good thing because it means more people in the neighbourhood but it's also a double edged sword," he said.

His store just absorbed a 30 per cent increase in rent.

"It’s difficult for small independents to compete with the big-box stores, they have the deep pockets to pay the high rents just to have a presence on the Drive," says Darcy Houser, owner of Super Valu grocery store. (Margaret Gallagher/CBC )

It's hard to compete with big-box stores and chains, he said, and the added cost of rent will have to be taken off their bottom line to keep prices competitive.

"It's important that mom and pop shops have a place at the table and survive, because, otherwise, we're going to look like every other neighbourhood in North America," he said. "I don't think that's what people really want."

With files from The Early Edition. 

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