VANCOUVER (NEWS 1130) – We have heard a lot about the crazy state of Metro Vancouver’s housing market but it’s not just pricey homes sitting vacant in some areas, there are also plenty of empty storefronts along otherwise bustling corridors.
So, are the changes we’re seeing in some neighbourhoods having an impact on local stores and restaurants?
“I think there certainly could be [a trickle down effect] but, in terms of identifying the actual extent of vacant homes, there have been various research studies that have considered the issue in an isolated sense and we are still peeling back the layers of the onion on that one,” says Ryan Berlin, a demographer and economist with Vancouver’s Urban Futures Institute.
Commercial real estate broker Sherman Scott with Colliers International agrees.
“The difficulty we have in answering that question is that we don’t have any stats on how many homes are vacant on the West Side or in other areas. If we had those, we could probably say with more certainty.”
But Scott believes the revved up housing market is having other, more measurable, effects on businesses.
“What we are seeing is prices in the commercial real estate investment market increasing significantly. Certainly owners are trying to get a return on their investment, which would mean charging tenants more rent,” he tells NEWS1130.
“At the same time, property taxes have been increasing dramatically as prices have gone up. I was looking at some properties that saw approximately a 20 per cent increase, which gets passed on to the tenants.”
Scott says the proposed rapid transit expansion has also changed the business climate along the Broadway Corridor in Vancouver.
“We’ve seen quite a bit of speculative purchases along West Broadway in particular. People have paid some pretty high prices for commercial property and are looking for flexibility in leases with demolition clauses. The landlord wants the right to tear down the building and redevelop in the future which makes it difficult for a new tenant to come in and invest money into a property if they don’t have a long term lease.”
But back at the offices of the Urban Futures Institute, Berlin believes the open market will create a balance over time.
“To the extent that lease rates are too high for some business to stomach, creating vacancies above normal levels, the impact should be to bring those rates down,” he says.
“We may see cyclical trends in vacancies, but that should smooth out over time.”