Retailers on shopping strips in Sydney and Melbourne are building the case for property owners to pay the price for empty shopfronts amid claims business owners are fearful of negotiating with landlords.
Calls for an “empty shop tax” have escalated after small business commissioners first backed the proposal earlier this year. The tax aims to discourage property owners from keeping stores empty rather than cut the rent.
“The landlords are greedy and shops stay vacant for years… they really don’t care,” owner of Toorak Travel Julie Poumés said.
Poumés agrees with a push from Melbourne’s Toorak Village Traders Association for Stonnington Council to introduce levies on property owners if they don’t find tenants within a reasonable time.
Association president Tony Fialides said business owners feel “intimidation” from landlords at the same time as they were grappling with the challenge of online retailing.
“They are frightened to talk to landlords about the rent — some quite strong businesses are frightened. Owners don’t like the confrontation,” he said.
Stonnington Council mayor Steve Stefanopoulos said the idea of an empty shop levy was being considered by council.
“If it’s vacant for six months or longer, that’s where we might want to levy,” he said.
Australian Small Business and Family Enterprise Ombudsman Kate Carnell and New South Wales Small Business Commissioner Robyn Hobbs have argued that landlords should be encouraged to lower rents in cases where no suitable tenant could be found.
However, implementation of these policies across the country would be difficult. It would involve individual councils adding specific conditions to commercial property rates in their area.
While small business commissioners believe this could also be legislated at a state level, getting consistency across Australia would be a challenge.
Commercial property experts say although the idea of an empty shop levy had been around for years, it wouldn’t necessarily boost availability of affordable shopfronts.
AF Property Consulting founder Amanda Falahey said commercial market rents were always determined by “what someone is willing to pay” for the property.
In cases where a landlord might be holding on to an empty site in hopes of developing it in future, an extra fee wouldn’t change things, she said.
Sydney retailers have also complained of challenging trading conditions and hits to strip shopping in the face of landlords.
Traders in strip shopping areas like Leichhardt’s says empty shopfronts have a domino effect.
“I think it will help make them rent out the space, instead of [choosing to] just not rent it out,” Ms Georgiopoulous said.
She stops short of saying she would move due to the empty shopfronts near her.
“That’s unattractive for us — I wouldn’t do it,” Ms Georgiopoulous said.
Sydney’s Inner West Council is currently seeking feedback from businesses about accessibility and parking in 17 main street areas, including in Leichhardt.