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Toronto’s property price surge has another victim – small business

First-time homebuyers aren’t the only ones struggling due to the recent run-up in Toronto property prices – a new study shows that commercial property prices have experienced similar gains, putting small businesses sensitive to lease rate hikes at risk.

A recent City of Toronto study provided to The Globe and Mail looks at the assessed value of non-residential properties from 2012 to 2016 in the 84 business improvement areas (BIAs) across Toronto.

On average, the value of non-residential properties in the 84 BIAs increased during the four years by 40.9 per cent. That’s almost as high as the 42 per cent price increase in City of Toronto homes between 2012 and 2016, according to Toronto Real Estate Board data.

Ten per cent of the BIAs had increases greater than 60 per cent, including Dovercourt, College Promenade (College and Ossington), and Queen Street East. Church and Wellesley experienced the highest increase, at 91.4 per cent.

Click here for the full list of non-residential property price increases


As commercial property values increase, small business owners are feeling the effects spill over into their rents. Landlords who have paid high prices for properties often charge more to recoup their investments, and have more incentive to replace low-paying leaseholders in favour of more lucrative retail leases or development opportunities.

While a previous generation of shopkeepers tended to own their buildings, retailers today are more likely to lease. Many of these leaseholders are directly responsible for paying property taxes, which can go up if nearby properties increase in value more than the city average.

There’s a strong correlation between the increase in property value and the increase that businesses pay in rents, says John Kiru, the executive director of the Toronto Association of Business Improvement Areas.

“[The assessment numbers] have a significant impact on the taxes, which could effectively impact the rents. The fear is that once these taxes start translating to rents … it’s going to be almost impossible,” he says.

“For many landlords, the increase in property taxes has gone from $33,000 to $44,000. Those increases are then passed on,” he says. “At the end of the day, it’s the small business that suffers.”

For Sultana Odishou, who owns Romeo and Juliet Hair Studio on Bayview Avenue, rent is a constant concern.

“I’ve seen it go up $800 a month this year,” says Ms. Odishou, who now pays $4,800 per month for 800 square feet of storefront space. That doesn’t account for the additional costs of taxes, electricity and other expenses in running the business she’s had for 19 years.

“It’s becoming too much,” she says. “I have a family, other obligations. I can’t stay open seven days a week. It’s tough.”

Rising rent is a concern that’s shared by many small businesses on Bayview, where it’s common for monthly rent to be in the $7,000 to $10,000 range.

For some areas, such as Bloor Street’s BIA, which saw an 88.5 per cent increase in value, the increases are expected and businesses are generally able to adapt. “The area commands some of the highest commercial rents in the city, which makes it very difficult for a small independent retailer,” said Briar de Lange, executive director of the Bloor-Yorkville BIA.

“Tenant spaces turn over, but new tenants are ready and able to come in. It is a high demand area.”

But in other areas, such as Bayview Leaside, which has seen a 67.6-per-cent-increase, business owners are finding it more difficult.

Dino Carella and Enzo Salvaggio are owners of Hollywood Gelato, a 750-square-foot ice cream shop that has been on Bayview Avenue since 1998. They say that increased road traffic and congestion, decreased foot traffic and parking, more chain stores and the increase in construction in the area have all had a negative effect on business in the area.

“Just on my block we have 15 vacant storefronts,” Mr. Carella says. “Brick and mortar isn’t what it used to be. You can’t pay $7,000 to $8,000 a month. It’s just way too much and entrepreneurs are dying out.”

Dino Carella scoops gelato at his shop, Hollywood Gelato, in Toronto.

He’s currently in the midst of talks with his landlord. “We’ve been battling with the landlord back and forth,” says Mr. Salvaggio. “We’re always negotiating, but we pay a lot compared to everyone else.”

Mr. Kiru says retail has been “under siege” over the last few years, through “the Wal-Marts of the world, and most recently online shopping.” Those issues, coupled with rising property values, are making it harder and harder for small businesses to turn a profit.

Dan Kelly, president of the Canadian Federation of Independent Business, says the hot residential real estate market puts pressure on commercial property.

“There’s no question that the condominium boom is a large part of it. Every little strip of commercial area is being re-evaluated,” he says. And while condos are needed, Mr. Kelly says that “unbridled pressure” is causing rents to rise because of the alternative uses and potential for the space.

“You have to sell a lot of olive oil or a lot of tennis rackets or a lot of paninis to make rent,” he says. “We have to worry that we’re pricing out local independent businesses from Toronto communities.”

Non-residential property prices by BIA

BIAs are listed in alphabetical order. Use the search bar or tap the column headings to narrow or filter results

BIA Assessed value 2012 ($) Assessed value 2016 ($) Change (%)
ALBION-ISLINGTON SQ 72,247,103 80,490,300 11.4
AVENUE ROAD 291,074,585 418,640,700 43.8
BABY POINT GATES 34,134,331 48,772,200 42.9
BAYVIEW AVE. 122,073,501 204,618,500 67.6
BLOOR ANNEX 199,756,553 274,637,700 37.5
BLOOR BY THE PARK 77,295,835 102,298,200 32.3
BLOOR STREET 2,377,719,307 4,483,127,600 88.5
BLOOR WEST VILLAGE 340,942,425 437,236,700 28.2
BLOORCOURT VLG 150,358,645 213,825,800 42.2
BLOORDALE VILLAGE 53,449,269 74,341,500 39.1
BLOOR-YORKVILLE 1,063,763,433 1,744,093,200 64
CABBAGETOWN 134,644,725 210,654,700 56.5
CHESSWOOD BUS AREA 463,447,000 563,468,900 21.6
CHINATOWN 397,776,431 580,390,527 45.9
CHURCH-WELLESLEY 98,903,740 189,344,200 91.4
CITYPLACE FORT YORK 91,412,200 134,646,900 47.3
COLLEGE PROMENADE 74,849,753 119,957,800 60.3
COLLEGE WEST 25,046,120 35,083,800 40.1
CORSO ITALIA 113,272,320 143,955,500 27.1
CROSSROADS DANFORTH 55,714,951 72,520,300 30.2
DANFORTH MOSAIC 257,963,329 363,838,800 41
DANFORTH VILLAGE 222,404,813 303,189,200 36.3
DOVERCOURT VLG 9,766,700 15,625,500 60
DOWNTOWN YONGE ST 5,444,271,469 7,603,521,910 39.7
DUFFERIN WINGOLD 67,170,100 103,395,400 53.9
DUKE HEIGHTS BIA 1,588,510,753 1,924,086,100 21.1
DUNDAS WEST 95,020,949 138,815,800 46.1
EGLINTON HILL 24,573,300 36,935,000 50.3
EMERY VILLAGE 2,098,632,804 2,473,718,496 17.9
FAIRBANK VLG BIA 60,109,000 85,597,500 42.4
FINANCIAL DISTRICT 14,775,468,386 17,558,938,050 18.8
FOREST HILL VLG 65,276,000 79,648,600 22
GERRARD INDIA BAZR 52,205,404 66,942,100 28.2
GREEKTOWN DANFORTH 243,246,039 337,805,200 38.9
HARBORD STREET 33,688,044 49,329,100 46.4
HILLCREST VILLAGE 44,769,097 62,984,800 40.7
HISTORIC QUEEN E 346,349,693 605,890,500 74.9
JUNCTION GARDENS 96,767,835 145,307,750 50.2
KENNEDY ROAD 417,341,963 507,279,200 21.6
KENSINGTON MARKET 187,097,040 259,137,900 38.5
KNOB HILL PLAZA 19,029,101 23,381,300 22.9
KOREA TOWN 114,184,083 151,685,500 32.8
LAKESHORE VILLAGE 69,585,155 100,319,300 44.2
LESLIEVILLE 139,152,787 217,878,900 56.6
LIBERTY VILLAGE 678,718,712 928,213,400 36.8
LITTLE ITALY 226,199,720 319,578,000 41.3
LITTLE PORTUGAL 65,327,960 101,595,900 55.5
LONG BRANCH 44,090,656 57,124,300 29.6
MIDTOWN YONGE 287,157,768 462,388,400 61
MIMICO BY-THE LAKE 35,427,572 46,908,800 32.4
MIMICO VILLAGE 15,140,569 19,829,900 31
MIRVISH VILLAGE 99,064,700 143,057,400 44.4
MOUNT DENNIS 31,076,800 38,787,000 24.8
MOUNT PLEASANT 156,737,800 237,542,400 51.6
OAKWOOD VILLAGE 32,842,500 45,344,800 38.1
OSSINGTON AVENUE 71,028,948 116,371,700 63.8
PAPE VILLAGE 48,778,027 57,528,800 17.9
PARKDALE VILLAGE 145,230,372 210,276,900 44.8
QUEEN STREET WEST 788,812,591 1,046,685,500 32.7
REGAL HEIGHTS VLG 60,071,236 86,119,400 43.4
RIVERSIDE DISTRICT 108,432,071 146,492,000 35.1
RONCESVALLES VLG 136,788,635 187,170,600 36.8
ROSEDALE MAIN ST 213,392,433 338,753,200 58.7
SHEPPARD EAST VLG 289,718,680 354,961,200 22.5
shoptheQueensway.com 268,758,969 354,871,100 32
ST CLAIR GARDENS 62,918,100 86,274,100 37.1
ST LAWRENCE MARKET 2,369,224,326 3,439,779,945 45.2
THE BEACH 269,373,637 352,024,800 30.7
THE DANFORTH 153,601,696 197,245,241 28.4
THE EGLINTON WAY 169,722,001 237,061,900 39.7
THE KINGSWAY 121,433,296 185,101,100 52.4
THE WATERFRONT 1,144,229,406 1,509,067,005 31.9
TORONTO ENT DIST 6,769,269,050 9,171,241,111 35.5
TRINITY BELLWOODS 67,569,281 97,724,300 44.6
UPPER VILLAGE 86,254,600 124,540,300 44.4
UPTOWN YONGE 438,063,457 699,786,700 59.7
VLG. OF ISLINGTON 80,466,089 104,394,000 29.7
WEST QUEEN WEST 302,299,925 451,726,500 49.4
WESTON VILLAGE 69,064,700 95,152,600 37.8
WEXFORD HEIGHTS 157,052,907 195,480,600 24.5
WILSON VILLAGE BIA 312,239,900 380,183,100 21.8
WYCHWOOD HEIGHTS 119,371,700 163,550,300 37
YONGE-LAWRENCE VLG 304,053,000 448,536,900 47.5
YORK-EGLINTON 71,562,085 102,255,900 42.9

Source: City of Toronto; MPAC. Data includes all non-residential property categories, such as commercial, shopping centres and office buildings, within the boundaries of Toronto Business Improvement Associations between 2012 and 2016.


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