Here's the advice experts have for solving London's vacant property problem

London's politicians should call out property owners who let their buildings sit empty for years, even if they don't have the power to tax vacant commercial buildings like those owned by Farhi Holdings Corporation, a local urban policy expert says. 

"I think there's a leadership vacuum here. City council needs to step up and hold private property owners to account for their practices," said Martin Horak, the associate director of Western University's Centre for Urban Policy and Local Governance. 

CBC News has been taking a closer look at empty buildings in London's downtown, including the former library building on Queen's Avenue and the former London Free Press building on York Street. Owner Shmuel Farhi promised to develop both, but has not.

The city's major downtown vacancies also include the Wright Lithographic building and three of four buildings at the intersection of Richmond and Dundas. All three are owned by Farhi Holdings Corporation, which until recently rented the space to Starbucks, Rexall and McDonald's. 

In a statement to CBC News, Farhi who owns more than 100 properties in London, has said a lack of parking and crime deter tenants from signing in the core. 

"When somebody owns so much property, folks inside government and more generally in the city may feel worried about angering that large property owner, and that limits what they say, what they put pressure on, and it doesn't address the issues," Horak said. 

He acknowledges that local politicians do not have a lot of legal means to compel landowners to do more, but he says they have one powerful tool: their voice. 

"City leaders do have public opinion, and they have the pulpit of a public voice, if they choose to use that." 

"It's easy for a city council to get into the spiral of being worried about angering a large property owner like Farhi Holdings Corporation and therefore not calling on them to actually step up and do more," he said. "Our council has been pretty timid about that.". 

Farhi has said in a statement that he believes in the downtown and wants to do his part to revitalize it. 

By the numbers

London's downtown commercial vacancy rate was 16 per cent before the pandemic. It's expected to hit 20 per cent this year. 

In 2019, it was 18 per cent. Waterloo's rate in 2019 was 9.7 per cent, on par with the Canadian average of 9.8 per cent, according to a report put together by commercial real estate company CBRE. 

While the pandemic has hit all cities hard in terms of commercial rentals, some say it's an opportunity to re-imagine how things have been done in the past. 

Shauna Brail is an urban planner and economic geographer at the University of Toronto's Institute for Management & Innovation. She believes it's essential for municipalities to work with private building owners and developers but says if they don't play ball, cities can be in a tough spot.

"Real estate values are such that we can see real estate being used as an investment more than as a place, and when you have land that is being held for investment purposes, or until such a time that developing or redeveloping makes strong financial sense for a developer, you can sometimes end up with a situation where the land and the space is underutilized." 

"That can have negative implications for the quality of that space," Brail explains. 

The urban planner doesn't think taxation, whether as an incentive or a disincentive, is necessarily the only answer. She believes collaboration, to generate ideas and enthusiasm for development, is a route London's political leaders could consider.

"Whether it's sidewalks, improving the street with bike lanes, opportunities for outdoor activities, cafes, those are  ways that can encourage and entice new kinds of investment and activity that bring people together by choice rather than by force."

Future of office use in flux

But Horak, a longtime Londoner, says the city has struggled to develop public-private partnerships and to be really innovative in how it uses public spaces. 

"I don't think we have a culture here of large private landowners wanting to invest big time in downtown and in public spaces and the health of downtown generally," he said. 

The pandemic has also moved office workers into homes, and whether there will be a return to large workspaces, is still unknown. Many of London's vacant downtown buildings could house many employees. 

"Putting pressure on a corporation to invest more in downtown and to make more efforts to rent its properties, some of which have been empty for years and years, isn't going to address the underlying market problems. Only a turnaround in market conditions will do that," Horak said.  

He does note that London has seen a significant investment in residential development in the core with new towers going up on Talbot Street, Richmond, and York streets. 

"That hasn't translated to more demand for office space. The city needs to continue trying to make downtown a more attractive place for investment generally."