There are lots of storefronts sitting empty in Toronto, Ontario, Canada, including many in the downtown core. Just take a walk along Queen Street, east of Spadina and see for yourself.
Since the early 2000s, the city’s been handing out property tax rebates to those who own vacant commercial and industrial properties. Apparently, Toronto’s spent $367 million on this initiative between 2001 and 2013.
It’s a perfect example of what economists call “perverse subsidies” (incentivizing what one wants less of).
But on January 17, 2017, Mayor John Tory announced that he wants to scrap these rebates. “We are subsidizing people to keep space empty that is increasing, almost hourly, in value,” he said.
The city hopes to save $22 million a year by doing away with this program.
But the increase in tax revenue from revitalized retail spaces will likely dwarf those savings over time.
Downtown Toronto photo by Storm Cunningham.