How the State killed the shops in the center

The data released a few days ago by Confcommercio show an accentuation of the phenomenon of desertification commercial, which appears more accentuated in the historic centers than in the suburbs and affects both the Centre-North …

How the State killed the shops in the center

The data released a few days ago by Confcommercio show an accentuation of the phenomenon of desertification commercial, which appears more accentuated in the historic centers than in the suburbs and affects both the Centre-North and the South. In particular, «In the historic centers there are fewer and fewer traditional activities (fuels -40.7%, books and toys -35.8%, furniture and hardware -33.9%, clothing -25.5%) and more and more which offer services and technology (pharmacies +12.4%, computers and telephones +11.8%), as well as accommodation (+42%) and catering (+2.3%)”.
To remedy this situation, and consequently combat commercial desertification, we were asked to intervene with projects urban redevelopment to maintain services, liveability, safety and attractiveness of cities.

Indeed, it is worth noting that, if these data have the merit of further raising awareness regarding a situation of degradation of the historic centers which is becoming more and more alarming, on the other hand it does not seem they can be invoked to request the use of the typical paraphernalia of state interventionism and public and urban planning to remedy this situation. The degradation that is being discussed, to which the reported commercial desertification is correlated, is rather the direct consequence of the numerous public interventions that have taken place over the years under the legislation that authorized them and even promoted or supported them, above all by the powerful ideological weapons of the intellectual, politically oriented. They have been made explicit both in urban planning with the zoning of the territory and with rent control, to which the fiscal lever has been added, with numerous national and local taxes.

With rent control, implemented with various legislative measures, used from time to time, and also cumulatively, which have covered, and still cover, a vast area previously left to the contractual freedom of the parties, such as, for example, measures to block evictions, the imposition of a minimum duration of rental contracts (even six years for uses other than residential) and the almost automatic renewal of the same, limitations on rent increases to a lesser extent than inflation or the cost of living, etc., the vitality of the real estate market has been stifled and the value created by exchanges and competition has been reduced, making the solutions and incentives that this determines impracticable. Owners and developers were thus discouraged from maintaining existing supply or taking risks to produce new supply, which ended up artificially increasing demand for real estate and creating a shortage in the market. In turn, the tenants have often had to desist from searching for suitable units and even from undertaking or maintaining commercial, artisanal, professional or other activities.

Finally, through the property taxation, particularly high and penalizing, individual choices and those of companies regarding consumption, work, savings and investments were influenced, consequently producing an alteration in their behavior and resulting in an inefficient allocation of resources, to be employed in areas and sectors chosen by politicians and bureaucrats. Furthermore, taxes have also discouraged contractual activity, often acting as an insurmountable obstacle and preventing the meeting of supply and demand. In this regard, it is sufficient to recall the different tax regime that can be applied to rentals for residential use, with the option for flat rate tax at 10 or 21 per cent, compared to rentals for other uses, shops and offices first and foremost, subject to ordinary regulations (for the sole registration of the contract there is a registration tax of 1% or 2% if one of the two subjects does not have a VAT number).

From what has been highlighted above, it is clear that a reform that opens the doors to the market and free individual choice is now unavoidable. And both in terms of urban planning and construction, in which models of redevelopment and development of the territory could be adopted according to private rules, through consent expressed in private legal acts rather than imposed by public authorities. To this end, positive experiences of some realities in the United States could be effectively borrowed through some simple changes aimed at allowing individuals to live, inhabit and work in realities truly created by them and to their extent. For leases, the word should finally be put to an end to the over one hundred year old restriction regime and the equally dated law of “fair fee” (which still today regulates rentals for uses other than residential), which have frozen the market, in favor of the full freedom of the parties and their contractual autonomy. In this regard, the very recent initiative of the Argentine Prime Minister Javer Milei is emblematic, as he intervened decisively to liberalize rents in his country. The results were not long in arriving, as the press reports in recent days have highlighted. The reform should also include the taxation of the entire sector, which should be contained within very minimal limits, without any further national or local burden and with the extension of the flat tax tax option to the non-residential rental sector, even more contained in the amount of 10 percent.

Using other tools or taking other routes will not only stop the crisis in the sectorbut it will end up making it even worse, and perhaps irreversibly. is also on Whatsapp. Simply click here to subscribe to the channel and always be updated (free).