Relax taxes to revitalise Civic
To borrow from Winston Churchill, trying to tax our way into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
But when it comes to revitalising our city centre, that’s exactly what the ACT Government is trying to do.
Many of Civic’s buildings have been deteriorating for some time – and they detract from the attractiveness and amenity of our city. Look around our CBD and you’ll see boarded up windows and faded ‘for lease’ signs around every corner. You don’t need a finger on the property pulse to understand the real-world impact that a 14.7 per cent office vacancy rate and 15.9 per cent street level retail vacancy rate has on a city’s heart.
Next week, as the 2016 ACT Budget is handed down, the property industry will be looking for policies and programs that better support the transformation of our city centre. This is in line with Chief Minister Andrew Barr’s urban renewal agenda, and is absolutely essential at a time when cities are in fierce competition for talented knowledge workers and capital. How can we possibly expect others to invest in our city if we aren’t investing in it ourselves?
One of the fastest ways for the ACT Government to encourage revitalisation is also the simplest – relax the lease variation charge.
The LVC has been a massive obstacle to adaptive reuse in our city centre for a number of years. As it now stands, developers must pay LVC – that can run into the hundreds of thousands of dollars – on existing buildings that changes use. These significant additional costs are preventing the adaptive reuse of redundant commercial offices into fashionable new apartments, funky student digs, boutique hotels or even retirement living villages.
The ACT Territory’s forecast revenue from the LVC has plummeted and has never reached its projected figures – a clear indicator that redevelopment has been stymied since its introduction.
We know we need more people living in our city centre – but until we have supportive policies that encourage adaptive reuse, we’ll remain just like the man in the bucket.
Catherine Carter is ACT Executive Director of the Property Council of Australia