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White Rock Council, Chamber red-flag commercial rents crisis

Significant increases forcing businesses to consider closing or downsizing
White Rock Coun. Ernie Klassen, and South Surrey and White Rock Chamber of Commerce executive director Ritu Khanna said that – without provincial limits on commercial rent increases – they fear such signs will become commonplace in Semiahmoo Peninsula business hubs. (Tim Mossholder/Unsplash image)

White Rock Council and the South Surrey and White Rock Chamber of Commerce have added their voices to those asking for the provincial government to place limits on increases to commercial rents.

Council unanimously endorsed a motion from Coun. Ernie Klassen and Coun. Christopher Trevelyan at the June 12 meeting to submit a plea, for consideration by the Union of B.C. Municipalities, asking the province to establish “a rental limit increase on commercially zoned properties similar to the rental increase limitations that govern residential rental properties.”

“We’ve all heard about the horror stories that are going on out there with commercial properties,” Klassen, a past-president of the White Rock BIA, told council.

“I know that many of the businesses, even in our community, are talking about closing down, because the landlords are coming to us – myself included, in the past – with increases that, from my perspective, I’m not sure exactly how they can justify them.”

“It’s a huge issue,” agreed South Surrey White Rock Chamber of Commerce executive director Ritu Khanna, noting that, following the organization’s AGM at South Surrey’s Softball City on June 29, it plans to write to the provincial government requesting similar measures.

A recent survey of members showed that more than 50 per cent of businesses responding were considering either closing, moving or downsizing, she said.

“There is no protection on commercial leases – even with the pandemic,” she said.

“A lot of lease terms have ended with property management introducing significant increases – and not with a lot of notice, either.

READ ALSO: Commercial landlords on White Rock’s beach ‘push it’ with high rents: real-estate agent

“We have seen and heard that it has forced some businesses to close and made others consider downsizing,” she added, noting that it compounds pressures on brick-and-mortar businesses due to rising inflation, shortages of supplies, increases in operating expenses – including the increase in the provincial minimum wage – and the shortage of labour.

The challenge in assessing the problem in the community, Khanna agreed, is that it’s not a good sales stance for businesses to acknowledge that they are in crisis or close to being shuttered.

“Some of our businesses are struggling quietly,” she said.

“It’s a hidden suffering. These are people who live and work in our community. They are the backbone of it – and they have been some of the biggest contributors to our schools and charities.”

One way of quantifying the problem locally, she said, was the survey on commercial rents that the chamber conducted, anonymously, among its members.

Of those responding, 100 per cent said they were experiencing increases, Khanna said.

Eight per cent said they were manageable, and some 41.7 per cent described them as “challenging but manageable.”

But the remainder – more than 50 per cent of those surveyed – indicated they were either looking at closing, moving premises, or downsizing their operation, Khanna said.

“Zero per cent had experienced no change,” she noted.

Klassen said he fears that, without governmental action, White Rock will soon be – like many other cities around the globe – experiencing high levels of commercial properties standing vacant – which would be seen locally on the waterfront and in recent residential/commercial development in the uptown business hub.

Both he and Khanna agreed it would be wrong to class all commercial property owners and managers as “the bad guy.”

“A lot don’t want to lose their tenants,” Klassen said.

But they are facing complex pressures of their own, he said, including market forces which are, at present, only exacerbated by a lack of regulation on commercial rents.

COVID created a lot of big and interconnected issues for local businesses, Klassen said, including the unanticipated struggle to find new employees.

“I don’t understand where all the people went,” he added.

“We thought if we could just get through COVID we’d be, if not on Easy Street, doing better.

“But it’s not turning out to be that way.”

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