“The suburbs are going to be hot” – but shopping malls maybe not?

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The CEO of Simon Malls is bullish on suburban real estate:

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Adding to the pressure has been the migration back to city centers of a segment of the country’s affluent people. But David Simon, son of the company’s founder and CEO, said on a conference call with Wall Street analysts Monday evening that trend had been overblown.

“All of the urbanization two, three, four years ago, the question was, Why are the suburbs going to exist? Everybody is going to live in urban environments, yada, yada, yada,” Simon said. “I’m telling you the suburbs are going to be hot, and our quality real estate is going to be where the action is.”

Putting aside data proving the rebirth of city centers over the last 20 years, even if there is a boom in the suburbs that are home to Simon malls, the bigger question is whether the developer can reinvent those properties adequately given retail’s changed landscape…

For now, Simon seems to be holding its own. After a difficult spring in which many of its tenants, notably Gap Inc., withheld rent while stores were closed for weeks on end, Simon has collected 90% of billed rent for the past three quarters. The company reported today that it has given tenants about $400 million in rent abatements and another $310 million in deferments.

It will be interesting to see how this plays out. Multiple issues need to be resolved:

  1. Can the retail market steady or rebound? Will the problems of COVID-19 keep going or permanently push shoppers to online platforms?
  2. Can malls both shift their focus from retail to other uses, including food, entertainment, community spaces, and residences, quickly enough even as they search for the magic formulas that will keep people coming in?
  3. Will many malls face big problems while some in wealthier areas and with deeper pocketbooks survive?
  4. Might a growing suburban population boost the chances of all malls?
  5. Is the shopping mall a destination of the past? For a few decades they were an exciting place but now no longer have the same buzz.

Given all of this, I would not be so optimistic. Perhaps Simon has a big plan and thinks it can revive their malls. If people are interested in the suburbs again, there might be a glimmer of hope: make some strategic changes at certain malls, become a destination in a way that single-use suburban properties cannot easily match, and try to capitalize on land that could be valuable because of its location.

Driving down, traffic deaths up in Illinois and across the US

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Usually traffic deaths decrease when people drive less. This has not been the case in Illinois or the United States as a whole in the last year:

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About 1,166 people died in motor vehicle crashes in Illinois in 2020, a nearly 16% increase over 2019, according to the Illinois Department of Transportation. That’s a provisional number, said IDOT spokesperson Guy Tridgell, since it takes the state agency 12-18 months to finalize annual data…

Speeding and traffic fatalities typically go down during recessions, according to an October study published by the National Highway Traffic Safety Administration. In Illinois, for example, deaths dipped sharply in 2008 and 2009 according to state data, though they’ve been up slightly since…

About 28,190 people died in crashes from January to September 2020, more than a thousand more fatalities than in the same period in 2019, the federal agency estimated. A full annual report is expected to be released in the late fall…

What’s more, traffic deaths nationally were down from March to May, but jumped back up after states began reopening in June, according to the agency’s estimates.

This suggests safety is not solely a function of the number of miles driven or trips taken. How people drive and the conditions matter quite a bit. In this case, the article hints at multiple possible reasons for this jump. This includes speeding, more impaired drivers, and less seat belt use among those hurt.

I wonder if there are several other factors at play. With many public and private locations shut down, did driving become an even more important escape for some Americans? With limited places to go, driving and doing so dangerously could be a kind of release not available elsewhere.

Second, is there a safety feature to a certain level of traffic? With fewer people out, does this encourage riskier driving compared to having to navigate more vehicles on the road? Too many cars likely leads to more accidents but what about too few compared to typical conditions?

When new residents to an area bring a lot more money to spend on housing

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A piece in the New York Times highlights what happens when residents from one part of the United States move to another. One aspect of this: the new residents can bring a lot of money with which to purchase a home.

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According to a recent study by Redfin, the national real estate brokerage, the budget for out-of-town home buyers moving to Boise is 50 percent higher than locals’ — $738,000 versus $494,000. In Nashville, out-of-towners also have a budget that is 50 percent higher than locals. In Austin it’s 32 percent, Denver 26 percent and Phoenix 23 percent.

As the commentary goes on to note, this means that prices in certain housing markets can then go up. New residents with resources compete with existing residents who may or may not be able to keep up. Several thoughts arise:

-Imagine current NIMBY practices at a national level instead of just at a local or regional level. The piece hints that people in multiple locations might want to restrict migration from California. Mass movements of people in the United States are not heard of and restrictions have been applied before.

-This presents an interesting conundrum for local officials and local planners. Growth is usually good. Until it is not the kind of growth local residents want or it is growth driven by outside forces. If communities want to grow and attract wealthier residents, are they also willing to accept the changes that might come?

-Just as some communities have requirements that developers of big projects pay fees or provide affordable housing, is there some way for a community to “tax” newcomers to help provide funds to offset changes?

-Do these patterns eventually lead to from a perpetual search for the new hot, lower cost of living location? Once Boise, Austin, and Nashville are different, what places come next – Omaha, Billings, Baton Rouge? This would take quite a while to work out but I do wonder how many attractive lower cost of living places there can be at any one time.

“Cities hope eventually to turn their smart street lights into cash cows”

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Cities continue to look for ways to monetize their infrastructure. The new frontier: street lights.

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The poles can serve as billboards where companies buy ad space.

5G providers and others can pay monthly fees to hang their equipment on light poles.

The brass ring for cities is to compile data from smart street lights and sell it for profit.

The bottom line: “We’re seeing a lot of cities buying back their street lights from utilities,” Gardner tells Axios.

“Because all of a sudden, they’ve woken up to the fact that, hey — you know, the boring, kind of arcane corner of the municipal infrastructure space, the street light poles? They’re actually critical assets that we need to own and control.”

This could be the dream of city managers and public works directors everywhere: the same infrastructure that serves the residents of the community can also be used to generate revenue for the city. Imagine covering the maintenance and construction costs of the infrastructure and possibly even adding to the community revenues.

Residents could like this too. However, they might have a few concerns:

-Billboards in even more places? What about visual pollution? What companies are allowed to advertise on government owned property?

-Some communities already have controversy over 5G. This could raise the conflict from it just being present in the community to being officially endorsed by the municipality.

-Sell data about residents and visitors? Is there any expectation to privacy while driving, walking, biking in public?

It will be interesting to see how far this goes across different communities.

Churches and a digital divide during COVID-19

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COVID-19 has pushed more churches into the digital realm but there are patterns in who is operating online and in what ways:

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“The digital divide in churches reflects the digital divide in American society more generally,” says Mark Chaves, a theologian at Duke University and director of the National Congregation Study, which has surveyed religious groups in the US since 1998. Churches with less of a digital presence tend to be located in rural areas. Their congregations are more likely to be older, lower-income, and Black. Those demographic groups are also less likely to have access to broadband, and they have been disproportionately affected by the pandemic, both in health and economic outcomes. Those realities have factored into church outcomes too. A survey from LifeWay Research, which focuses on Christian ministries, found that white pastors were the most likely to report offerings that were higher than expected in the past year. Black pastors, by contrast, were most likely to report that the pandemic economy was impacting their churches “very negatively.” Churches often run on tight margins, and those impacts can have long-term effects: LifeWay Research found that a small percentage of churches have had to cut down on outreach, suspend Sunday School or small group programs, or lay off staff members. Black pastors were more likely to say they cut staff pay or deleted a church position…

For the faith sector, the acceleration of new technologies could lead to massive changes. Other industries, like media and retail, have been transformed as they progressively moved online; money, influence, and attention now converge in a small pool of winners, often at the expense of smaller outfits. Some believe churches might experience something similar. “You’re going to have the top 40 preachers that everyone listens to, and the regular everyday preacher is not going to be able to compete,” says William Vanderbloemen, a former pastor and founder of the Vanderbloemen Search Group, an executive search firm for churches. That’s not to say more niche markets couldn’t also emerge. “People will still show up to hear a message from a pastor who knows their specific community on a micro-contextual level. Like, here’s what happened in our zip code this week, and here’s how it relates to how we think of our God.”…

Chaves, who runs the National Congregation Study, says it’s too soon to know whether this year will have a lasting impact on worship practices, and what that impact would be. “Church attendance has been declining slowly for decades,” he says. “Will we see a shift if online participation stays ubiquitous? Or will it mean that more people are participating?” Some early research suggests that churchgoers are eager to get back to in-person services and worshipping together with their community. While smaller congregations, like First Baptist Church Reeltown, are unlikely to continue broadcasting their sermons on Facebook Live, other churches may find value in a hybrid model, where some people come into Sunday services and others watch from their computers.

One way to think about this is to consider the marketplace of American religion. Because there is no state-sponsored religion and there is the free exercise of religion, religious traditions and congregations can compete for people. In this competition, innovation and flexibility can help lead to increased market share. The Internet and social media are additional tools in this competition. Want to appeal to those using those mediums? You have to have a presence. Or, perhaps a group can seek others who eschew digital worship.

Using the Internet for church is not new. But, COVID-19 may have accelerated this market competition. Could churches compete without going online? Just as businesses suffered, how many churches might close because of COVID-19? Who can provide a compelling church service and other activities in online forms? Can you easily translate online viewership to attendance or membership measures? Could certain churches flourish in certain platforms while others utilize other options?

And what this means for religiosity in America is hard to know. In addition to church attendance figures, does this push Americans further down the path of individualistic and voluntaristic faith? Is church via Internet or social media really church in the same way without embodied action and sacred spaces?

Putin’s palatial McMansion?

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McMansions are big but not usually too big. At some point, they become a mansion. Does it make sense then to compare a structure that may have been built for Vladmir Putin to a McMansion? Here is the argument:

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That film is Putin’s Palace, an expose of the Versailles-scaled estate Russian President Vladimir Putin has allegedly constructed for himself on the Black Sea. Produced and narrated by Alexei Navalny, the now-jailed activist and opposition leader, the film runs to nearly two hours and has been viewed more than 106 million times on YouTube — almost certainly record viewing for any film on architecture…

Located outside the seaside town of Gelendzhik, it is almost comically lavish, a virtual Kremlin-on-the-sea, surrounded by vineyards and protected by multiple levels of security, including a no-fly zone overhead. According to the film, it has its own church, a sculpture garden, a boulevard lined by rare trees, an arboretum (with 40 gardeners to keep it up), an amphitheater, an underground hockey rink (Navalny: “Who needs a palace in which you cannot play hockey?”), an amphitheater, a guest house accessed by a 260-foot-long bridge, a power station, staff dormitories, an operations center, a pair of helipads and its own gas station…

But Cirillo is no Rastrelli, and so while the palace apes the scale and grandiosity of the Hermitage, it lacks the essential dignity of the original, its sense of imperial grandeur. It is, in effect, a McMansion scaled up to palatial level, with the kind of amenities you’d find in an upscale suburban development in North Dallas: indoor pool, home theater, gym, bar, closet space galore…

Besides the tawdry detailing and construction, the essential difference between the palace and its historical models is conceptual. The great palaces were not just residences, but public expressions of an all-encompassing philosophical framework that reflected the monarch’s godlike presence across the entire physical and intellectual space of empire.

With this argument, a McMansion is defined less by its size but more in how it tries to imitate established styles or buildings and fails. Imitating the palaces of the past is not necessarily easy to do and the project can instead turn into a farce.

I wonder if it can also go the other way: can a McMansion be scaled down to a much smaller size? Imagine a McMansion tiny house that attempts to replicate a larger dwelling. Or, even a relatively small house that tries to do too much in borrowing elements.

Perhaps this argument works an additional way. Labeling any house or building a McMansion immediately casts the structure in a negative light. Putin and McMansion can be an easy link for those critical of his actions. Of course someone like that would live in a McMansion rather than a coherent architectural marvel? I have read many stories of how powerful people create outsized structures meant to display their prestige and power. Do such people often create architectural marvels or do they tend toward McMansion territory?

Combining local government and company towns in a Nevada proposal

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A proposal in Nevada would create “Innovation Zones” where companies could form their own local governments:

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According to a draft of the proposed legislation, obtained by the Review-Journal but not yet introduced in the Legislature, Innovation Zones would allow tech companies like Blockchains, LLC to effectively form separate local governments in Nevada, governments that would carry the same authority as a county, including the ability to impose taxes, form school districts and justice courts and provide government services, to name a few duties.

Sisolak pitched the concept in his State of the State address as his plan to bring in new companies that are at the forefront of “groundbreaking technologies,” all without the use of tax abatements or other publicly funded incentive packages that had previously helped Nevada bring companies like Tesla to the state.

During his speech last month, Sisolak specifically named Blockchains, LLC as a company that had committed to developing a “smart city” in the area east of Reno that would run entirely on blockchain technology, once the legislation passes…

The draft proposal lays out the requirements for the zone, including the applicant owning 50,000 acres of undeveloped land, all within a single county but separate of any city, town or tax increment area. And the area would have to be uninhabited. The company would also need to have $250 million, and a plan to invest an additional $1 billion over 10 years into the zone.

This would appear to come at the nexus of trends. First, Americans generally like the idea of local government. They believe it to be more nimble and responsive to local needs as local officials can focus more on getting things done than getting bogged down in ideology or numerous competing interests.

Second, tech companies and other big companies like the idea of large campuses. Having a sizable portion of private land where employees can do all sorts of things, including work, is already a feature in some tech headquarters.

Third, governments want to attract businesses, whether headquarters or manufacturing facilities or office parks, that can help bring jobs, tax revenues, and status. This proposal provides different incentives compared to the traditional tax break.

Fourth, businesses like the idea of controlling activities regarding their company. Company towns are not new nor are ideas about creating regulation free zones for business activity. Being able to create local regulations, collect taxes, and more could be attractive to some companies.

Would such a proposal prove successful? It might depend on the definition of success: it could work out well for the business but perhaps not for employees or surrounding communities. And even if it does work, is it broadly transferable to other locations? The conditions in Nevada might be different than many other locations in the United States.

How searching for houses online became sexy

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With SNL poking fun at the ways people in their late 30s use Zillow to look at housing, what makes online home shopping such a current phenomena? I thought of the numerous factors that had to come together – here is an incomplete list:

SNL “Zillow”
  1. The rise of online real estate sites and apps. These have been around for years but between Zillow.com, Redfin.com. Realtor.com, Trulia.com, and more, potential sellers and buyers have a lot of easily accessible platforms. These options are now ubiquitous: people can search at any time from any location for any length of time. And now that some online listings have video tours and/or 3D models, viewers can get a good sense of what a property is like without ever getting near it.
  2. COVID-19 adds much to existing patterns. With some people interested in moving out of cities and health risks making it more difficult to see homes, online viewing may be the primary option.
  3. The SNL spoof targeted a particular age group – people in their late-30s – who might be in the middle of a housing dilemma. By this age, those interested in settling down somewhere may or may not have the resources (think school loans, unstable employment during COVID-19 and the last economic crisis in the late 2000s) to buy in the places they want. But, the browsing is free and all sorts of homes in all sorts of locations are available.
  4. The single-family home has always been an important part of the American Dream. Today, this is true and in new ways. The home is a respite away from COVID-19 and political polarization. It is an important investment as buying the right home is not just about enjoying day-to-day life; it should pay off in the future when the homeowner wants to sell and housing values have continued to rise.
  5. Americans also like to consume and compare their social status or possessions to others. With homes occupying such an important part of American mythology, these larger patterns carry over to these sectors. Browsing homes online allows for window shopping and comparisons on one of the most expensive investments. And homes are not just dwellings; they offer windows into lifestyles and neighborhoods.

Put all of these together and you get an SNL reflection on how home searching and purchasing happens today.

Asking tough questions of American athletes

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The story of a Danish journalist who covers the NFL and asks certain questions of players hints at cultural differences in approaching both sports and important social issues:

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Back in 2016, Kjærsgaard-Rasmussen lived in Burbank, Calif., for a year with his wife and son. It had always been his dream to spend some time in the States, so when his parent company asked him to help its esports arm transition from Twitch streaming to television studio production in Los Angeles, he jumped at the opportunity. He had a great house and a pool. He had friendly colleagues at work.

But what he noticed over time is that he’d end up having a version of the same conversation every day, one that never broke beneath the surface. He remembered, for example, being confused about a situation involving how to get the local water authority to turn the water on at his house and wanting to ask someone about it—a step beyond hello and how are you. He felt like there was an immediate recoil…

It shines a light on something that seems to permeate culturally, reverberating from the sporting world that Kjærsgaard-Rasmussen finds himself thinking so much about. Maybe it’s the end result of widespread, rigorous media training, which creates a fast-food experience of well-meaning words pieced nicely together but ultimately containing no substance, an appeal to our innate desire to move on. In some unconscious way, does our lack of exposure to actual humility and openness inform our default setting, which is to simply wince through the tough stuff and avoid it in real life, too?…

The phenomenon is not necessarily unique to the U.S. Kjærsgaard-Rasmussen saw, for example, the further any players drifted from Denmark (perhaps to the English Premiere League) the less likely they were to be interested in answering difficult questions or exhibiting any kind of remorse for something negative that had happened. It creates a situation where it feels for Kjærsgaard-Rasmussen like he is doing something wrongwhen he’s merely asking fair questions.

At the least, this story sheds light on how others in the world can view what many Americans would take as normal. The NFL is the NFL. Except when you are viewing it with a different lens. Americans also have the ability to watch many sports around the world through an American lens with an American network and broadcasters providing the commentary and interpretation.

At a deeper level, this asks what we expect to hear from athletes and others regularly in the public eye. Does it generally ring true that Americans just want to stick to sports, rather than consider the actions of athletes and those associated with teams? Probably, even as sports has been an important social scene regarding social change (and resisting it).

What the architecture of City Hall communicates

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A new book titled City Hall looks at the design of city hall across American communities:

“Our democratic heritage goes back to ancient Greece, and so it stands to reason that when America was born, so to speak, in the late 18th century, municipal buildings referred to the Greco-Roman architecture, with the pillars and pediments and cornices,” he says. But as the country matured, different forms of architecture began to emerge. “Then it becomes, ‘Do we still embrace the neoclassical style architecture, or do we start embracing our own time?’” he adds. (That argument more recently played out at the federal level, when former President Donald Trump tried to make neoclassical architecture the default style for all national buildings in his controversial “Making Federal Buildings Beautiful Again” effort.)…

In many of these examples, governments used their city halls to express civic pride, and to be “at the forefront of progressive building technologies and changing architectural styles,” architectural historian Thomas Mellins writes at the beginning of Drooker’s book…

Regardless of the architecture, there is a recognition among mayors and architects that municipal buildings are ultimately places for the people, and that the designs need to convey a message of approachability. In San Jose’s new city hall, which opened in 2005, Richard Meier’s postmodern design made extensive use of glass, making a statement about government transparency as well as energy efficiency. The building’s unusual three-part structure emphasized that theme: There’s the rotunda and the city council chamber, and in between them at the heart of the complex is an open plaza that then-mayor Ron Gonzales and his administration wanted toserve as the “people’s living room.”

Public or civic buildings present a unique opportunity to highlight particular values and create public space to be used and enjoyed. This can be done in a variety of architectural styles or forms, affected by trends in architecture, regional differences, the size of the community, the resources available, and more.

This reminds me of James Howard Kunstler’s critique of Boston’s City Hall, a building designed by noted architect I. M. Pei. Kunstler argues that the space is not inviting and not a worthy public space. The Brutalist architecture does not necessarily invoke warm fuzzies about local government.

In contrast, many suburban communities opt for modest city halls in either more traditional styles or simpler postwar forms. Many suburbanites like the idea of smaller local governments and the suburban structures can highlight tradition and/or efficiency.

West Chicago City Hall depicted on Google Street View.

Part of the approachability of these a city hall or civic building involves how well they fit with the surrounding landscape. A Brutalist building could be more approachable with lush greenery around it. A plain suburban city hall could be more inviting if it did not sit behind a large parking lot. More broadly, American communities would benefit from inviting public spaces that are connected to civic buildings.