Fitting COVID-19 into the cycles of American cities

Derek Thompson writes about how COVID-19’s effect on retail and restaurants will affect American cities:

The song of American urbanization plays on an accordion. Americans compressed themselves into urban areas in the early 20th century. By mid-century, many white families were fanning out into the suburbs. Then, in the early 21st century, young people rushed back into downtown areas. But in the past few years, American cities have begun to exhale many residents, who have moved to smaller metros and southern suburbs. As with so many other trends, the pandemic will accelerate that exodus. Empty storefronts will beget empty apartments on the floors above them.

The American cities waiting on the other side of this crisis will not be the same. They will be “safer” in almost every respect—healthier, blander, and more boring, with fewer tourists, less exciting food, and a desiccated nightlife. The urban obsession with well-being will extend from cycling and salads to mask design and social distancing. Many thousands of young people who might have giddily flocked to the most expensive downtown areas may assess the collapse in living standards and amenities and decide it’s not worth it. Census figures will show that the urban exodus went into hyperdrive in the COVID years. There will be headlines exclaiming the decline of the American city or, more punchy, “Americans to New York: ‘Drop Dead.’”

Then something interesting will happen. The accordion will constrict again and American cities will have a renaissance of affordability…

But the near death of the American city will also be its rebirth. When rents fall, mom-and-pop stores will rise again—America will need them. Immigrants will return in full force when a sensible administration recognizes that America needs them, too. Cheaper empty spaces will be incubators for stores that serve up ancient pleasures, like coffee and books, and novel combinations of health tech, fitness, and apparel. Eccentric chefs will return, and Americans will remember, if they ever forgot, the sacred joys of a private plate in a place that buzzes with strangers. From the ashes, something new will grow, and something better, too, if we build it right.

Several thoughts in response:

1. Thompson hints at one of the vital pieces that makes cities work: the density of people and activity. Restaurants and retailers are not just functional entities that provide jobs and revenue; they bring in extra people who want to visit, eat, browse, be around other people who are doing similar things. The kinds of everyday activity that make urban neighborhoods unique and attractive are difficult to maintain during COVID-19 when restrictions limit contact and social interaction.

2. After just reading The Death and Life of Great American Cities with one of my classes, I wonder: what would Jane Jacobs do in times of global pandemics?

3. Thompson describes populations moving in and out of American cities as conditions change. From a broader perspective, I am not sure I would agree with the accordion example: the longer-term trend in the United States since the early 1900s has been toward suburban growth and development. The percent of Americans living in cities has stayed relatively stable since the beginning of the postwar era while government policy, cultural ideology, and population shifts have swelled suburban populations. If American cities can gain and lose residents, it is a relatively small accordion compared to the tremendous suburban growth over the last century.

4. A problem with predicting future urban trends is that the patterns of the past may not happen again in the future. COVID-19 is the sort of event that is difficult to know the effects of, particularly years down the road. Will life return to normal or will the effects of a significant economic shutdown and shelter-in-place for many people change future behaviors? We do not know. At the same time, I do not think Thompson’s predictions are unreasonable. How exactly the affordability of land plays out could be an arduous process; land that was relatively overvalued before COVID-19 may not quickly become affordable and it may take time to clear significant debts or mortgages for numerous urban properties.

Less restaurant and retail business, lower local sales tax revenue

The ongoing effects of COVID-19 on business activity, particularly restaurants, will impact communities:

Restaurant dining room closures resulting from the coronavirus pandemic are wreaking havoc on the industry’s bottom line and upending the lives of many working in the service industry. Those losses also will be felt by communities that rely on restaurant sales taxes and special food and beverage taxes to help fund municipal services. Some suburbs will feel the effects much more than others because of how heavily they rely on such taxes.

Sales taxes at restaurants and bars contributed more than $2 million a week to 83 suburbs, a Daily Herald analysis of 2019 tax records on the Illinois Department of Revenue’s website shows.

In a dozen suburbs, sales taxes from restaurants and bars represented more than 20% of all their sales tax revenue last year…

“It’s not just restaurants and bars, though,” said Rob Karr, president and CEO of the Illinois Retail Merchants Association, pointing out many sources of sales tax have had sharp drops. “Everybody in the retail sector has been negatively impacted, aside from groceries.”

With more Americans eating out in general, the ability of restaurants to draw visitors from other communities, and connections between eating and other recreational and cultural activities, eateries can be important sources of revenue.

Communities can aspire to have a diverse tax base where they draw tax revenues from a variety of sources, including sales taxes and property taxes. At the same time, some communities develop niches where they focus on one business sector or they have a historic strength. Diversification may be difficult to achieve and depend on a variety of forces including actions by local officials and leaders, the demographics of the community, historic patterns, and actions by business owners and larger economic forces. In other words, the character of a community’s tax base develops over time, can change, and at least in part depends on outside actions and forces beyond a community’s control.

It will also be interesting to see where the budget issues that municipalities face fall among the other economic concerns. Sales tax revenues are part of the picture but so might be property values if businesses need to close and there are not other businesses to take their place. If the federal government and states are also facing big hits to revenue, what might happen to municipal budgets?

Starbucks as a symbol of wealth in a community

Starbucks is planning more stores in less wealthy neighborhoods:

Starbucks plans to open or remodel 85 stores by 2025 in rural and urban communities across the U.S. Each store will hire local staff, including construction crews and artists, and will have community event spaces. The company will also work with local United Way chapters to develop programs at each shop, such as youth job training classes and mentoring…

Starbucks opened its first community store in Ferguson, Missouri, in 2016, two years after the riots that broke out over the shooting of an unarmed black 18-year-old by a white police officer. It has added 13 more locations since then, including stores in Baltimore, Chicago, Dallas, New Orleans and Jonesboro, Georgia. Another one will open this spring in Prince George’s County, Maryland. Starbucks estimates the shops have created more than 300 jobs…

Kelly said the stores reflect Starbucks’ core belief in responsible capitalism. The coffee shops are profitable, he said, and have the same menu as regular Starbucks stores…

“I can’t think either of a retailer, especially one that has more of a discretionary, higher-end purchase, being willing to push into neighborhoods and markets that have less purchasing power,” Theodos said. “Starbucks usually appears when a neighborhood has the purchasing power to support it.”

For years, Starbucks has been a brand and presence that signals a wealthier location. With their prices, products, and aesthetics, communities had to have a certain level of resources for Starbucks to locate there. Once the money was there, Starbucks might arrive in droves. (I’m thinking of the number of Starbucks on Michigan Avenue in Chicago.) If payday loan stores and dollar stores help identify poorer locations, Starbucks may be the most common restaurant that signals the opposite.

I am curious about one item of information from the article. The Starbucks executive quoted in the story says the locations are profitable. Does this mean Starbucks avoided these locations for so long even though they could have made money or did something change in the cost equation over time? Some firms would want to expand everywhere to bring in money though others might want to protect their status.

A restaurant smaller than a McMansion dining room

McMansions are known for having a lot of space; certain restaurants try to keep the dining room very small. Thus, the comparison between an Omaha cafe and a McMansion dining room might not seem out of place:

You feel at home in Sojourn the minute you walk in the door and down a hall that’s separated from the eating area. When you reach the cafe, it’s much like you’re entering your own dining room. The serving area, with 12 tables for four, is smaller than some dining rooms in suburban McMansions.

OmahaRestaurantDiningRoom

However, this appears to be a decent-sized space with room for twelve tables, 48 customers (plus the small countertop in the back), and still some room for people to get by. And if this estimate of 12 square feet per diner is anywhere close, this space has roughly 570 square feet.

This would make for a very large McMansion dining room. Even with the interest Americans might have in always having some extra space, how many times does a McMansion owner need to seat 48 people? A 20 foot by 20 foot square McMansion dining room comprising of 400 square feet would be smaller than this space. A 40 foot by 15 foot rectangular dining room would be slightly larger than this. The size of this cafe is probably more akin to a great room or family room in a McMansion rather than a dining room.

So why the comparison here to a McMansion? Two guesses. First, the emphasis is on the relatively small space of the cafe. While the video does not suggest the space is too tight, the dining room would certainly be lively with a half full or more dining room. This is not a suburban chain restaurant with tables upon tables; this is a limited space. Second, the description attempts to highlight the coziness and warmth of the space. McMansions have plenty of space as well as limited charm due to their cookie-cutter nature and cavernous rooms.

Food delivery services and restaurants aiming for the unsaturated suburban markets

Skift Table suggests the suburbs are ripe for increased restaurant and food delivery activity:

Outside the urban cores, things get interesting. Earnest Research shows that in the rest of the U.S. market, it’s a head-to-head battle between DoorDash (31 percent market share) and Uber Eats (with 30 percent). In third place is Grubhub, coming in at 27 percent…

“Many suburban areas tend to have a larger number of chain restaurants than independent mom and pop restaurants, making it advantageous for Grubhub to offer takeout from these familiar chains to local residents who may not be accustomed to the idea of ordering delivery,” says Katie Norris, Senior Manager of Communications at GrubHub…

But not all restaurants need to be located on Main & Main to succeed, thanks to the ever-expanding reach of digital marketing and social media. And raising capital might also be within closer reach than once thought. “To mitigate high rents, many brands are opening in second-tier locations and that’s very attractive to investors,” says Chad Spaulding, Managing Director at the U.S.-based investment firm Capital Spring. “We spend more of our time seeking low-rent, low-investment type opportunities that provide a value to the consumer that you can count on in tougher times in the wider economy.”

Suburban locations not only fit this bill, they also solve the urban issue of oversaturation. There is simply less competition the farther afield you go. And now, you can actually go further than before. Because Uber Eats drivers and DoorDash dashers can soon be there to meet you — in 30 minutes or less.

There may be less competition and cheaper rents but there are certainly other costs such as increased driving distances to deliver food and finding ways to attract suburbanites to a physical location.

In the long run, it would be interesting to consider what it would take to raise the level of suburban food to that of major cities where awards, interest, and big name chefs seem to be much more common. Does fine dining and innovation in food require a density of restaurants, food workers, and well-heeled customers or could this all come together in some way in the suburbs? Could the suburbs of today who are often interested in developing entertainment and cultural districts really go after high-end and innovative food as a strategy to successfully compete against suburban fast food and chain restaurants?

Job growth in the food service industry

What does America make? Increasingly, at least in terms of the number of workers, the answer is food:

In 1990, manufacturing was almost three times larger than the food service industry. But restaurants have gradually closed the gap. At current rates of growth, more people will work at restaurants than in manufacturing in 2020. This mirrors the shift in consumer spending. Restaurants’ share of America’s food budget has doubled from 25 percent in the 1950s to 50 percent today.


Yet, as Derek Thompson notes, our national rhetoric is still stuck in the era of factories and manufacturing:

But the most important feature of the restaurant jobs boom is not what it may say about the future, but rather the fact that it is happening in the first place. Trump and other politicians often say they want to help the common worker. But then they talk about the economy as if it were cryogenically frozen sometime around 1957. The U.S. still makes stuff, but mostly it serves stuff. To help American workers, it helps to begin with an honest accounting of what Americans actually do.

The jobs landscape has experienced much change in the last half century. Certain sectors – such as the tech industry or manufacturing – consistently receive a lot of attention. But, could someone unite the interests as well as depict a group to the public at large that would include restaurant workers, service workers, and nurses (among other fields that have grown tremendously)?

Pizza Hut buildings with new uses

What happens to Pizza Hut buildings around the world once they are no longer home to the pizza chain?

Many of the vintage red roof buildings have been repurposed. Tran and Cahill, aren’t the first to notice or even document this change, but their photos nevertheless offer a fascinating glimpse at the weird ways these buildings are being used now.

They’ve found old huts reincarnated as Asian restaurants, dry cleaners, liquor stores, churches, and even funeral homes. Google Maps helped find locations, and online communities of hut fans have provided invaluable help since the started the project in 2013.

The pair, based in Sydney, has logged about 8,700 miles photographing almost 100 locations. They covered Australia and New Zealand before taking a great American “pizza hunt” road trip. They travelled through California, Florida, Illinois, Ohio, Virginia, Pennsylvania, New Jersey and New York, just to name a few states. Wherever they went, Cahill and Tran made a point of getting to know the locals and getting the scoop on a building’s history. “In Chicago, we made a phone call to a business because we weren’t sure if it was a legitimate hut, and a very helpful store clerk gave us a full history of the building dating back to ’91,” Cahill says.

The fast food/restaurant experience is not just about the food but also includes the building and their architecture. Looking at the images from their book Pizza Hunt, it doesn’t take much imagine to them as functioning outlets of a global brand. I wonder if this previous architecture helps or hinders the new occupants. For example, does turning an old Pizza Hut building into a church (image 10/10) bring in more or less people? Does the Asian food (images 1/10 and 4/10) taste any different in such a building? I’m guessing the architecture and design may have little effect on later behavior and attitudes; perhaps this really says something about our approach in constructing functional, suburban buildings where one of the top priorities is that it can be easily adapted to numerous uses.

“The Underappreciated Architecture of Waffle House”

Waffle House recently announced plans for a fancier new building in New Orleans. One journalist suggests this undervalues the chain’s existing architecture:

Waffle House is not Chartres Cathedral, admittedly, but it has a certain architectural je ne sais quoi. The classic Waffle House is minimalist in design, with a lemon-yellow strip running around the top, above a wide band of windows and, often, a red or red-striped awning. The interior is outfitted with retro globe lights and red-and-chrome stools. Unlike most fast-food joints, Waffle House has an open kitchen, so you can watch the cooks as they scatter and smother your hash browns…

New Orleanians will be excited to get a Waffle House in Mid-City, and I would never begrudge them that. But this new design is all wrong for Waffle House as a brand, and falls short of its status as a Southern icon.

The company owes that status to an architect you’ve never heard of, Clifford A. Nahser. A World War II veteran and Georgia Tech graduate, Nahser was still a fledgling architect when Waffle House co-founder Joe Rogers Sr. approached him for help designing his prototype diner in Avondale Estates, near Atlanta. As the chain grew, Nahser went on to design hundreds more restaurants, drawing up the plans in his basement after his day job at Atlanta Public Schools…

What bothers me is not that Waffle House feels it’s time for a change (maybe it is) so much as the direction they’ve chosen. As the “loft” aesthetic has permeated American culture, we’re seeing watered-down faux-warehouse details in outposts of Chipotle and Starbucks, and that is the style we see here. It’s as generic as the classic Waffle House look is distinctive. Couldn’t the company have hired an architect known for his or her use of bold color to bring more of a pop sensibility?

There seem to be two main issues at play here:

1. How much should restaurant chains (and for that matter, retail chains as well) look alike or different? Waffle House has a very recognizable logo as well as a common design aesthetic. How much does this help the brand in terms of sales, nostalgia, recognition? Does a chain benefit from looking significantly different than other chains or should there be some similarity so people feel they can comfortably cross over?

2. How much do architectural movements – here, a more minimalistic and modernist design – get translated into fast food restaurants? I’ve argued before that Americans don’t particularly like modernist homes but perhaps this kind of modernist architecture is associated with a particular industry (fast food) that arose in the post-World War II era of prosperity and highways. The architecture and landscape of interstates and suburban sprawl is often criticized so how many people would defend the look of Waffle House?

Americans spend more at restaurants than at grocery stores; use restaurants in new ways

Spending data from the Census shows that for the first time Americans spent more at restaurants than on buying food at grocery stores:

More than two decades ago, Americans spent $162 in groceries for every $100 they spent in restaurants. But this past January, they spent nearly equal amounts of money in both places: $50.475 billion in restaurants and bars, and $50.466 billion in grocery stores.

There are several social changes behind this:

Perry attributes the numbers to dropping gas prices, which have left many people with more disposable income. But it’s unlikely that a single factor is to thank for the trend. “I think it’s a combination of a recovering economy and changing eating habits,” he said, extrapolating that “the millennial generation [may be] more likely to eat out than cook at home.” Perry also noted that dining in restaurants simply isn’t the once-in-a-blue-moon event it used to be…

Martha Hoover, the founder of sprawling Indianapolis restaurant empire Patachou, goes one step further: Restaurants have earned a role in society that is equal to “work” or “home.”…

“We’ve seen a huge shift in San Francisco,” she told Yahoo Food. “I’ve seen people who treat restaurants like they do in New York City: as their kitchens.” Weinberg attributes the change to people working longer hours, leaving them with little time to prepare their own meals. Grocery shopping, too, can be a pricey proposition if one develops a predilection for organic and local fare.

In other words, home and family life has changed alongside different economic options. We might also see restaurants more as “third places” between work and home where people can socialize and pay for their meals in a comfortable in between space.