[jdietrich]

The proliferation of charity and community bookshops is substantially the product of tax policy. Commercial property is taxed at ~50% of the nominal rental value, but charities are substantially or wholly exempt from this tax. Importantly, this tax is owed regardless of whether the property is occupied; for a commercial landlord, it is therefore preferable to lease a unit to a charity at a peppercorn rent if the unit is expected to remain vacant for some time. This has had a profound effect on the makeup of retail tenants, particularly in small towns with high vacancy rates, which some argue amounts to a harmful market distortion.

[rahimnathwani]

Yes, perhaps there's an argument that having charity shops is better for the area overall than having too many vacant shop fronts. But if that's the case, why not cut business rates for all, rather than for this arbitrary group?

[cafard]

The group Turning the Page operates pop-up Carpe Librum stores in space provided by the owners of commercial properties in Washington, DC. In some cases, a building is scheduled for demolition and replacement--the store at 17th between K and L NW had an unusually long run.

Periodically the commercial real estate market sags, and it is some years before it picks up again. An owner can be caught between the end of the leases and the rebuilding. In these cases, a charity bookshop is probably not a bad tenant. It is unlikely to disturb neighboring properties with noise or litter. It will probably not start a fire, as squatters have inadvertently done in a vacant block downtown.

And I really don't think that in a large city this is unlikely to distort the market. I haven't counted the vacant storefronts within five blocks either way of the current Carpe Librum at 14th and I NW, but there are quite a few.

[kristianp]

In my country (Australia), charity shops have only a poor book selection and there are no charity book shops. 2nd hand book shops are for profit, although I doubt the profit is very large.

Charity shops benefit the shoppers and the donators, who benefit from how easy it is to get rid of their stuff, compared to the alternatives that are time consuming or difficult.

[jermaustin1]

I ran the number on one that my wife and I would go to in Pennsylvania, and just based on the people I'd see checking out each time I was there, they made decent money.

Their model was, you give us a book, we give you $0.50 off a single book purchase. All books are $1. So if you gave them 25 books, you would get $12.50 in credit, but can only use $0.50 per book you bought. So you still end up giving them a profitable transaction. And most people didn't use credits to buy their books, they went in, and bought 10 books after perusing for an hour or so.

It's such a good concept, I'd like to try it some day in an area where there is enough of a population within an hour that it makes sense.

[RobotToaster]

I don't see how encouraging charities can be seen as harmful?

It would be good if it was extended to organisations like CIC however.

[jdietrich]

It probably isn't good for the economy that large proportion of retailers are charity shops with very thin margins, despite the fact that they're being subsidised in terms of business rates and receive most of their stock and a lot of their labour for free. A charity shop is better than a vacant unit, but it generates very little value, even for the charity.

Local authorities want to see more diverse and vibrant high streets, but they're economically reliant on charity shops - local government collects and spends business rates, but central government funds the rates relief that charity shops receive. They simply can't afford to offer rate relief to other tenants who might use that space to build a more valuable business, because the tax system has distorted everyone's incentives.

In many towns, charity shops are visibly crowding out other kinds of retail. The relief for charities props up landlords and local authorities, taking away the urgency to reform the system and take steps towards a more sustainable future for declining high streets.

The new government are finally talking about fundamentally reforming the business rates system, but it's happening at least a decade later than it should have done.

https://www.cbi.org.uk/articles/the-path-to-business-rates-r...

[jimnotgym]

There is some rate relief for small businesses, but everything you wrote is still true and happening.

[seabass-labrax]

You clearly know what you are talking about, but I don't think you're representing the situation fairly. There are all kind of ways in which businesses may be exempt or partly relieved of commercial property rates. The particularly important one is the the 'small business rate relief', which exempts businesses whose property has a rateable value of less than £15,000 - that's basically all high street shops outside of London.

If by 'other kinds of retail' you mean retail chains or department stores, then yes, the current tax regime causes them to be disadvantaged. But almost every kind of local high street company (including cafés, jewellers, newsagents, toy shops, and yes, even second-hand bookshops) is helped considerably by these tax breaks - it's not just charity shops.

There are lots of reasons why high street businesses and retail in general are struggling, but I'm confident that business rates aren't one of them.

[globular-toast]

Too many charity shops is the sign of a "dead" high street in the UK. It's odd when you think about it because each charity shop is literally unique and you would think worth travelling for, as opposed to the chains that sell the same stuff everywhere. But that's just the way it is. There's a kind of snowball effect caused by too many charity shops that has been noted for decades.

[andyjohnson0]

Independent retailers are squeezed out by charity ahops at the bottom end, and nataional supermarket/coffeeshop/etc chains at the top end. Result is bland identical high streets.

[IshKebab]

It's unfair competition. Also nobody wants a high street filled with endless charity shops and poundlands.

[RobotToaster]

> It's unfair competition.

It's a charity, how is giving them an advantage over chains that put their profits into the pockets of billionaires a bad thing?

[CalRobert]

A lot of these shops are basically just big closets full of some hoarders' junk. It's marginally better than an empty storefront, but not by much.

Funny enough an acquaintance used to volunteer at one and his main income (aside from the dole) was finding the good stuff, taking it, and selling it on ebay (he was delighted when someone's old school Game Boy with original pokemon cartridges came in one day...).

[graemep]

Secondhand bookshops are not usually owned by billionaires. Neither are the things charity shops sell in general.

There is a loss to customers because instead of knowledgeable owners, charity shops are run by volunteers of varying quality.

I know of one case (through a volunteer at a charity shop) in which someone threw out a book of 19th century prints because they "threw out all the old rubbish". That would not happen in a commercial shop. I think its less likely to happen now that there are charity bookshops that tend to take the more valuable books, but I would not say it never happens.

Most importantly, the ability to avoid paying rates reduces the incentive to let the shops out, reducing supply and raising rents. IN many cases owners would rather have empty premises than let at lower rents and removing a cost of doing so makes this more attractive. The higher rents this causes that give chains such a big advantage over the small businesses they have largely replaced.

[CJefferson]

The problem is in many small towns in the UK (like mine) the charity shops outnumbed the non-charity shops, and oftent he competitions isn't billionaires, it is locals who would like to start a coffee shop (for example), but can't compete against "multinational" charity shops.

[nobodywillobsrv]

Discouraging business is bad. Obviously Britain is not doing well if you see many towns

[WaitWaitWha]

can you elucidate on if this was un- or intended consequence, and "harmful market distortion"?