(Photo by Nicholas Kampouris / Unsplash)
A version of this op-ed was originally published on PostAlley.org and has been adapted with permission.
Blank street walls and empty storefronts have become a crisis in American downtowns, attracting undesirable activities and driving away customers who no longer feel safe traversing sidewalks. How did we get here?
A decade ago, economists became alarmed by the vast increases in retail space being built and marketed in urban centers following the Great Recession of 2008. By 2017, this was widely recognized as a gross oversupply. Every building owner hoped for a bank, a national brand retail outlet or an upscale restaurant. In commercial tenancy lingo, these are known as “credit tenants” — that is, businesses with deep pockets. Many would hold out for these golden geese, turning away local merchants who could not commit to long-term leases at premium rates.
This was a form of real estate lottery. Obviously, not every building would get such a tenant. Yet landlords held out, thinking they would snag the winning ticket. Some would keep a space vacant and declare a loss rather than lease to a small local business. Of course, brokers fed this mythology, as a credit tenant would net them a larger commission.
In a sense, for decades, real estate brokers designed urban streetscapes. Now, the upscale credit tenants have fled. Have the lease rates gone down? Apparently not. We are left with dead, if not festering, street conditions.
Over the past several decades, big urban department stores have fallen into the trash bin of commerce. Just as in shopping centers, downtown department stores were the anchors that attracted a wide variety of other businesses. Without those retail magnets, the smaller retailers lost a sizable share of their customer base. Many simply didn’t survive the loss.
Amazon and other internet retailers have certainly had significant impact. In the era when the quality of customer service was declining, the appeal of home delivery in which your wishes were a few quick clicks away is more appealing than pawing one’s way through racks of clothing and unhelpful sales staff.
Of course, another factor was the pandemic. That also kept customers away for fear of the transmissible Covid-19. It caused an attitudinal re-set, if not an economic one. Covid seemingly pounded the last few nails to the coffin of downtown shopping. Some cities have entire blocks that are lifeless or that support activities that are unsavory at best and dangerous at worst. So how do we fix it?
Going small
Could small-scale manufacturing fill those vacant spaces, as Ilana Preuss proposed in Next City recently? Those activities don’t attract the large numbers of customers needed to enliven a street. Small-scale workshops could be a good use for the “gray areas” that flank the cores of city centers; while retail stores benefit from being concentrated in smaller and more walkable locations, workshops, studios, custom fabricators and the like could find space in those peripheral locations.
Indeed, that pattern was found in city centers for centuries in districts that specialized in making clothing, shoes, furniture, equipment – products that require more floor area but without paying top dollar. City economic departments would do well to identify and match those businesses with building owners.
Within the denser, more tightly-knit city centers, a plethora of other uses should be sought. There is no shortage of candidates: small start-up stores, small cafes and eateries, small services (barbers, hair salons, banks, Amazon boxes), small grocers, small fabrication and repair shops, small food markets, bike and scooter rental, repair shops, minority and women-owned businesses (coupled with SBA loans and grants), artist studios, art galleries, community meeting venues, senior centers and adult education centers, neighborhood health centers, bakeries, take-out foods.
You may have noted the repeated use of the word “small.” Building owners need to get over the fact that they aren’t going to get a big bank, a large national brand clothing store, or an upscale restaurant to occupy an entire (or even half of a) building frontage with a singular, lucrative lease.
It’s going to take marketing these spaces to small locally owned businesses — and at significantly lower rents.
Cities could help this by giving both building owners and small businesses tax breaks for occupancy of spaces less than 2,000 square feet. Local governments can hire consulting firms to help in the marketing and matching process; they can cut the bureaucratic red tape that kills so many small businesses, setting up one-stop permit center for small businesses where trained staff guide prospective merchants through the process. Take the relentless misery of being a small business out of the equation.
The tabula rasa
More difficult will be the filling of empty spaces in office buildings. As the Baby Boom population retires, the era of huge office towers may be largely over. And although it’s a popular notion in some quarters to advocate converting these office buildings to housing, the practical and economic obstacles are formidable.
Painful as it might be, it’s worth considering demolishing mediocre and dated office towers and constructing apartments in their place – and doing the necessary site and architectural design for the replacements to be livable.
It might sound shocking to imagine office towers being imploded or bashed into bits with wrecking balls. However, most cities in the world have seen multiple waves of redevelopment in which older, dysfunctional or inefficient buildings were removed and new ones built in their place. This is not at all unusual in the history of cities.
Creating a tabula rasa allows for planning that includes features such as child care, gardens, parks, esplanades and promenades, schools, shops and services, and medical care that were not parts of the previous pattern of development. Thankfully, by now, urban designers and financial institutions have learned lessons about the benefits of mixed-use development, ground-related housing, and flexible commercial and live/work places.
Already, some cities are rethinking regulations and the type of public investments needed to transform a monoculture of workplaces into more diverse, sociable and sustainable places to live. A full-time resident supports many times more retail space than a weekday office worker.
Finally, the public has an important role to play in this restructuring. It sounds trite, but “buy local” should be the watchword. Keeping businesses thriving in your community feeds families. Bolstering annual bonus checks for corporate VPs does not.