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Originally Posted by curves2000
A lot of the vacant and commercial lease space hasn't really dropped in price for small and medium sized business, one of the reasons why is high property taxes, business taxes, utilities and other costs.
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Lower rents would actually help commercial property taxes to go down, as commercial property values are in large part tied to average lease rates.
You're not seeing commercial leases dropping because they're at the floor; if they got any lower it wouldn't be worth renting the space at all. Hence why the landlords are just sitting on vacant spaces than desperately trying to fill them with anything and everything.
With respect to property taxes, commercial mill rates have gone up because overall commercial property value has dropped so much, and it's the value of the big towers downtown that have dropped the most. As such taxes on smaller properties—especially ones that are still in high demand such as 17th Ave SW, 9th Ave SE, Kensington Rd/10th St NW—are going up. It's a crappy result of the way we charge property taxes, but that's the provincial government's doing, not the municipal government. Don't forget the provincial government upped their cut of property tax revenue, so even just keeping the city's revenue steady means they
must raise the rates to compensate.
And the city doesn't levy business taxes anymore, so that's a non-starter.
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The same thing can be said on the residential rent front. Does anybody know a lot of people these days skinning landlords on rent? Have rent's really come down for a lot of people? Nope, they are still fairly high considering the same factors above.
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Landlords still have to pay mortgages, and they don't want to lock into leases that guarantee them a loss. Same thing as on the commercial side, really. Rents are about as low as they're ever going to get.