Chris Corry: First do no harm – a new motto for the Spokane City Council
Cities across America have watched as businesses close and commercial property remains vacant. The pandemic certainly played a role as has remote working patterns expedited by the COVID-19 shutdowns. However, anti-business policies and actions have had a tremendous impact as well. Crime and homeless vagrancy are forcing businesses to close or move out of downtowns because of a lack of traffic, theft, organized retail crime, employee safety and more.
A colleague recently traveled to Spokane for a visit and told me that taking the Division Street exit was like exiting to the set of a “Walking Dead” episode or exiting to Seattle. The impact of drugs on those wandering the night was obvious and disturbing and left them feeling like the Spokane they thought they knew was gone.
Spokane Councilmember Zack Zappone’s new proposal ostensibly aimed at revitalizing the city, would expand Spokane’s residential “rent protections” to commercial properties while another proposal would create a registration and fine system for vacant properties payable by the owner.
Rent regulations are known by many names, including rent control, rent stabilization, or rent caps. Whatever the label, one thing is clear: Rent control does not reduce rental prices. In fact, many studies found it had the opposite net effect of raising rental prices. It also made it more difficult to find housing for those not already in housing and for those with less secure credit.
Placing similar rental regulations on commercial property would be disastrous for Spokane businesses. Unlike residential housing, commercial property involves much more initial cost on the landlord’s part to attract and move-in tenants. This can include tenant improvements, long-term lease discounts and more.
Commercial property owners would think twice about renting to a new business and would potentially need to create more strict and expensive leases upfront to ensure they can manage their costs. In other words, while fighting business vacancies they could easily create more vacancies.
The inherent assumption behind the legislation is that the Spokane Council knows better than the owner what the expenses of the property are and that all the variables across the thousands of leases across the city are better planned for and managed by the Council than by the property owners and their tenants.
This hubris all but guarantees higher initial prices and regular increases in order to build up rental income for when your expenses increase beyond any threshold triggers.
The second proposal would have businesses with vacant property fined.
Weaponizing code enforcement to monitor and punish property owners is the last thing needed to revitalize Spokane businesses. Fining businesses for trash, graffiti and for lacking protection from unauthorized persons seems especially rich given the state of trash, graffiti and the preponderance of “unauthorized persons” making private camping and drug use out of public places owned by the city.
There are a variety of options that do not require intrusive mandates from the city that could help commercial property owners and Spokane businesses thrive.
The first is taking a tougher stance on crime. Target, Nike and others have shuttered their doors in Seattle. They cited theft and organized retail crime as major factors. Let Seattle be a cautionary tale. Strengthening and enforcing shoplifting laws will help reduce theft and other crime. It is past time to do so. Spokane police have already said crime in certain parts of downtown has reached a “full-on crisis mode”
Spokane businesses note that they have seen a downturn in foot traffic in areas that have been taken over by the homeless.
The city of Spokane has a financial incentive to make changes. The success of the business community in Spokane impacts both property and sales tax revenues to the city. Lack of commerce will cost not just the business, but the city as well. Sales tax and property tax revenue potential alone should be reason enough to ensure proper policing and code enforcement.
The city can play a vital role in growing commerce in Spokane. It can be done by enforcing the law and keeping streets safe – what residents and businesses already expect of the city.
Chris Corry is the Eastern Washington director for Washington Policy Center and lives with his wife and children in Yakima. Members of the Cowles family, owners of The Spokesman-Review, have previously hosted fundraisers for the Washington Policy Center and sit on the organization’s board.