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Retail at grade: When does recipe for success become overbearing policy?

If you look at any major development in any major city in Canada, you will almost always hear the...

If you look at any major development in any major city in Canada, you will almost always hear the term “mixed-use.”

Mixed-use implies diversity and vibrancy and activity. It can mean any blend of residential, commercial, retail, institutional or office space, but oftentimes it involves residential units above with retail spaces at grade. 

However, the trend of retail at grade is not just a design choice, it’s often required by policy in municipal plans and zoning bylaws with the goal of creating street typologies that are lively and attractive to pedestrians. 

Toronto implemented mandatory retail at grade on a number of streets to encourage pedestrian-oriented development and to promote local shopping. Other towns and cities around the GTA have followed suit and often push for retail at street level in new developments. 

The unfortunate reality is that retail can’t work everywhere.

Even in the most picturesque European cities, retail is strategically located in areas where pedestrian traffic is naturally abundant.

For retail at grade to work best in Toronto, it should be focused on streets with great connectivity to major transit stations where natural pedestrian traffic will help it thrive. However, that context doesn’t always exist in smaller municipalities in the GTA.

Places like this have retail-at-grade policies but are also home to car-dependent cultures. Combine a low level of pedestrian activity with a high supply of retail at grade and you may end up with a lot of abandoned and empty storefronts.  

Toronto’s retail-at-grade strategy

In Toronto, the Priority Retail Streets zoning bylaw mandates a minimum of 60 per cent of lot frontages in new developments along designated streets be dedicated to retail space.

The bylaw applies in Toronto’s downtown core and includes streets like Yonge, Church and Queen, as well as less major streets like Cumberland Street, Hazelton Lane and Elm Street.

Even parts of Dundas Street West where “For Lease” signs already flood the streets are a part of the bylaw.

At municipal meetings, Torontonians often express that they want to see increased retail stores in the form of mom-and-pop shops and not “another chain store.”

Despite this desire, it is often another franchised retail store that pops up to fill the retail space.

One reason for this is the retail spaces built tend to be larger and more expensive than many independent businesses can maintain. 

Developers sometimes push back on these retail requirements and argue there is not enough demand to warrant retail.

For this reason, the retail requirement can turn an attractive residential opportunity into a riskier investment that may not be worth taking. 

Retail-at-grade policies around the GTA

Retail at grade may not be perfect in Toronto, but at least there is a fair amount of residential density to sustain some retail. This is not the case for many municipalities in the GTA which try to emulate Toronto’s policies.

These suburban municipalities have been operating on the principle of “if you build it, they will come.” This can be a good strategy, but it only works when the right infrastructure is in place to promote density and pedestrian traffic. 

Successful streets such as Queen Street West are vibrant due to their proximity to transit, nearby destinations like Trinity Bellwoods Park and surrounding high-density housing.

People are always traveling through this area, making it desirable for local businesses to set up shop. 

But, places like Burlington, Aurora and Newmarket have been built around the car and therefore do not facilitate as much foot traffic along the downtown streets.

Too often, these streets act only as lower-speed highways for commuters to get from point A to point B.

Additionally, the majority of housing surrounding retail-at-grade streets is comprised of low-density, single-family homes.

These characteristics can lead to desolate streets, which leads to the decline of local businesses, something that only got worse during the pandemic. 

I am a fierce advocate of well-designed ground floors and activated storefronts, but even I will be the first to admit that walking by abandoned storefronts harms the pedestrian experience.

Just as a vibrant mixed-use street can promote pedestrian activity, a vacant retail street can ward off pedestrians if they don’t feel safe or have nowhere to shop. 

So, what needs to happen?

Don’t rush retail: A case study of City Place

The largest master-planned community in Toronto, City Place, understood the negative impact of forcing commercial retail at grade. Early on in its development, the builders of City Place decided to construct residential at grade and it has been widely regarded as a successful project because of it.

Having residential at grade made the project easier to develop and provided some much-needed additional housing in the downtown region.

There are still some businesses – like a dog spa, a Tim Hortons, a barber shop and others – but there are not nearly as many shops as the density can support. Now that buildings are filled and residential communities are established, there is a much higher demand to include retail at grade.

This increased demand means City Place can adjust to include more retail spaces and entrepreneurs don’t need to worry about going out of business due to a lack of traffic or demand.

The issue for most municipalities is they are constructing the retail infrastructure before the demand has had a chance to build. In these cases, retail is being forced upon all properties on certain streets without the required density or foot traffic. City Place shows how retail incorporation can be done right. 

As we (hopefully) begin to enter a post-COVID world, we can reignite the best that retail experiences offer our public realm by ensuring that retail ends up where it makes sense.

If demand is high for residential, allow developers to build high-density residential buildings from top to bottom. If a demand for retail is high, trust the private market to respond.

The bottom line is that in order to create vibrant retail streets, we sometimes have to let the market govern itself. 

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