This recent article in Business in Vancouver caught my attention as it represents a key planning challenge in our region: the rising cost of commercial real estate. While increasing commercial land values is not the critical challenge that deeply entrenched housing unaffordability and neighbourhood gentrification can be, when the cost of a storefront increases beyond the ability of local-based and local-serving retail to pay for it, it can be a real loss for any community. This issue came up a few times when I was working on the OCP update for the City of North Vancouver and there are no easy answers.
“In a growing number of transactions this year, speculators appear willing to pay up to $1,000 per square foot – equal to $44 million per acre – for Vancouver commercial land assemblies. This is about three times higher than the prices that shocked the market in 2015.”
When a local business makes an investment in community, is part of the attractiveness of a community, and then is priced out by the desirability of a community, that is a real challenge that planners, urbanist and civic leaders need to put some energy into solving. Furthermore, the high cost of commercial land assemblies narrows the range of developers able to pay the price, typically privileging large-scale developers who prefer to work with large-scale retail tenants. Here in Vancouver, this challenge is heightened by the emphasis on commercial ‘corridors’ as potential ‘mixed-use’ redevelopment sites (a topic I may touch on in greater depth later this week).