Need for more retail space in decline

Why not rezone it for housing?

Reading Time: 3 minutes

Roslyn KuninTwenty-first century cities are undergoing a radical transformation, yet our streets and neighbourhoods are still being planned and zoned for a world that no longer exists.

Take Vancouver’s retail space. We now have too much retail space and we are going to need less. High-profile closures such as Chapters, Sony and Target are just the tip of the iceberg. Walk down any commercial street in the city and you are very likely to see empty stores, even in the best locations. It is not just individual cases of bad management that lead to retail closures, however. Technology is replacing the need for things. Does anyone remember video stores?

Of course, we are still going to buy stuff. Food and clothing cannot be replaced with electronic chips. But while we may still need or want physical things, what the British used to call High Street, the row of mainly smaller shops on a central street in a town, is becoming obsolete. In fact, the more modern retail malls are also beginning to struggle.

Why? Because an ever-growing component of our purchasing is done in either big box stores or online. For confirmation, choose any commercial street in your city or town and look at the businesses that are still operating. More of them – from restaurants to take-out food, barber shops to beauty salons – are now selling services rather than products.

While it has been suggested that more retail space should be converted to even more such establishments, there is a limit to how many we really need. The end result is that the demand for retail space is going to continue to decline.

But in spite of this obvious oversupply in retail space, many cities’ zoning requirements continue to specify that at least the street level of both older and newly-constructed buildings be designed and used for retail or related commercial activities because, well, that’s the way it’s always been. What else can we do?

I have a radical new idea. Why not change the zoning and allow the ground floors to be used for housing instead of for retail, especially in buildings that already have housing on the upper floors? Vancouver, for example, is in need of more housing. It is one of the most expensive cities in the world in which to live. It now takes more than 10 years income to buy a home. Four years is closer to the norm in most other cities.

Vancouver’s vacancy rate for rental housing is also close to zero. Developers are actively trying to relocate tenants from rental buildings they are replacing, but alternate accommodation is hard to find. And forget about trying to stay in a particular neighbourhood at a price you can afford.

Of course, converting unneeded retail space to housing will not solve all of greater Vancouver’s housing problems, but it is a move in the right direction, especially as retail space is becoming less necessary for the times we are now living in.

But you may wonder if people will want to live at street level. Undoubtedly some will, given that other housing options are limited. Clever design and location of entrances and windows can increase the attractiveness of living at grade. Many street-level dwellings were included in the Olympic Village and stylishly labelled as ‘European’.

We continually hammer into our young people that the only constant is change. We expect our entrepreneurs and business people to be nimble and fast on their feet if they wish to remain competitive as the world changes around them. But the cities in which people live and work are still being planned and operated on models that were best suited to the last century.

Just as horses gradually gave way to motorized transport, so store fronts will gradually be reduced in favour of warehouse type outlets and online purchasing. Are our municipalities ready?

Troy Media columnist Roslyn Kunin is a consulting economist and speaker. 

© Troy Media


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The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

Roslyn Kunin

Dr. Roslyn Kunin is president of the Vancouver Institute and has been chair of the Vancouver Stock Exchange, WorkSafe BC, and Haida Enterprise Corporation. She has also been on the boards of the Business Development Bank of Canada (BDC) and the National Statistics Council.

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