Have you ever deplored the large number of vacant commercial spaces by walking in the streets of Plateau Mont-Royal, Rosemont-La Petite-Patrie or Outremont? Many small traders can no longer afford to pay rent in the fashionable neighborhoods of the metropolis. But who should we blame? Promoters who speculate on their empty premises, or the City that practices taxation considered abusive by some owners? Explanations.
“The truth may be somewhere in between,” says Richard Ryan, chair of the Economic Development Commission and Mile-End city councilor, in an interview at the Téléjournal Grand Montréal .
“In the central neighborhoods or arteries that are becoming more” trendy “and more attractive, the property value of the commercial premises is increasing enormously. It becomes a problem, yes, because some homeowners are going to want double or triple [rent],” says Ryan.
“You make a lot more money on the speculative value of a building than on a short-term rent,” adds Glenn Castanheira, business development consultant.
When we leave a building rot in Montreal, we are thanked by a drop in taxes.
Glenn Castanheira, Business Development Consultant
This business strategy is completely legal. Some homeowners do not hesitate to keep dwellings deliberately vacant for a few months or years, hoping their value will increase. This is called artificial occupancy rate. The Association of Commercial Building Owners of Quebec (APBCQ) counts 25% of vacant premises in the metropolis.
As a result, in these neighborhoods, many large arteries end up with several empty premises, buildings are degraded or graffiti and vandals are falling prey. It makes all those who want to revitalize these shopping streets cringe.
This speculation on vacant premises particularly affects independent traders. Many of them do not renew their leases and put the key under the door.
“It’s not uncommon to see” triple net plus “leases, meaning the tenant has to pay rent, business taxes, school taxes, and building maintenance,” adds Glenn Castanheira.
Franck Hénault, a cheese maker on Mont-Royal Avenue, made this bitter observation. Small traders can not keep up with rising rents, unlike big brands that can not afford to go where they want.
“The right person is often a big banner because they can afford to pay,” he says.
The non-supervision of commercial leases in Quebec is killing more businesses than any economic crisis.
Franck Hénault, trader
However, many promoters refuse to be blamed. This is the case of Peter Sergakis, president of the Union des tenanciers de bars du Québec. He refutes the fact that many homeowners speculate through their empty dwellings.
“The problem in Montreal is the improper taxation of the municipality,” he says.
Something that Richard Ryan recognizes. “It’s the law of the market, and the city is the first who benefits with the increase in property value. ”
Act in consequence
In 2015, in a report filed with the Coderre administration, the Commission on Economic Development recommended imposing a surtax and requiring a permit for vacant premises.
Richard Ryan, the current Chair of the Commission on Economic Development, intends to deal with this issue this year.
Around the world, many cities have adopted measures to end the artificial occupation of premises. This is the case of Paris and Chicago.
In San Francisco, the administration has chosen to act against the establishment of franchises downtown by limiting their number.