EDITORIAL: Rent control no cure-all in Taipei

Mon, Apr 08, 2019 - Page 6

The issue of empty storefronts in eastern parts of Taipei has made headlines, followed by heated debate among residents, businesses and government agencies about the cause and how to solve the problem.

Some people have suggested rent control for landlords, while others — including Taipei Mayor Ko Wen-je (柯文哲) — are mulling a vacancy tax to make stores more affordable for would-be tenants.

However, the real issue is not just that rising rents are squeezing out businesses, but that the number of shoppers is declining.

The issue of empty storefronts is not unique to eastern parts of the city; it happens in other business districts in the capital and in other major cities in Taiwan as well. It is common to see businesses open and close from time to time due to competition or because of other factors. For example, the number of empty storefronts in the Shida Night Market (師大夜市) area over the past few years rose amid a standoff between business owners and residents, who demand a better quality of life.

What has drawn attention to the rising number of empty storefronts in the east is that the departures include some long-time merchants, including Yun Fu Lou Restaurant and Kitchen Pucci, as well as cosmetics retailer Sa Sa and fashion brand Superdry. Moreover, events like these in Taipei routinely snare high levels of media attention.

Rising rent is an important factor driving away commercial tenants, but if that is the case, why has the number of new retail stores and entertainment facilities kept increasing in the city’s other business areas, such as Ximending (西門町) in western Taipei and in Xinyi District (信義) near Taipei 101? Whose problem is high rent anyway?

Real-estate agencies and business consultancies have attributed the decline in the east to dramatic changes in consumer behavior and retail business models in the past few years, especially the emergence of e-commerce, which affects not only storefronts, but also physical stores in other industries. The decreasing number of brick-and-mortar bookstores is an example that reflects changes in reading habits and online purchases. Moreover, storefronts in the east have lost out to Ximending and Xinyi when it comes to attracting people with special characteristics and in-store experience.

The Taipei City Government under Ko has helped revive business in the city’s historic Dadaocheng (大稻埕) and trendy Ximending areas. Now it is time that the city government took steps to regenerate the east.

On Saturday, Ko visited the area and announced a four-point plan on Facebook, including that the city government would make improvements to pedestrian infrastructure and develop more distinctive stores. The city government can help facilitate business development, but store owners also must also adapt to the new era of retail by establishing and maintaining an engaging environment for consumers.

Rent control or a vacancy tax are not cure-alls for the empty storefront problem and such measures would require careful planning to avoid angering residents. However, the most dangerous aspect of such a plan is that it might do more harm than good to business activity in a slowing economy.