Opposing gentrified suburban strip malls in order to give immigrants and others cheaper business opportunities

Plenty of suburban critics detest strip malls for their ugliness, auto-dependence, and effect on traditional shopping districts. But, Kaid Benfield argues they may need to be protected from gentrifiers as they offer cheap real estate that can be taken advantage of by immigrants and others.

And yet:  As these properties have declined, so have their rents, making them affordable to small, often entrepreneurial businesses.  Particularly as immigrants have settled in inner suburbs (where many of these fading commercial strips are), businesses owned and patronized by the immigrant population have occupied many of these spaces, in some cases alongside small start-ups owned by longtime community residents as well.

The risk is that, as we reshape these old properties with new buildings and concepts, the replacement properties will be much more valuable than their predecessors; indeed, that’s why new development is appealing to investors and how it is made possible.  Overall, that’s a good thing.  But small businesses either go under, unable to afford new rents, or relocate as a result.  The logical place to relocate in many cases will be vacant storefronts in other strip malls in locations less attractive to the businesses’ clienteles.  What to do?…

According to Ritchey’s article, Asheville’s strip malls offer a setting for synergies to develop and help connect entreprenurial businesses to each other:  for example, establishments offering diverse but complementary products and services can share a customer base, trade ideas, and cross-promote.  This strikes me as analogous in some ways to synergies available to start-ups in more urban “business incubators.”

It makes a lot of sense to me and, in many parts of the country, it is newer Americans who are benefitting the most from these opportunities.  For them, a successful business in a strip mall is the American Dream at work.  Three years ago, Aaron Renn (The Urbanophile) and I wrote separate articles about a sort of organic economic revitalization being initiated by immigrants within the existing fabric of our older suburbs.

Interesting argument. Three quick thoughts:

1. Does this mean strip malls might be viewed differently in the future by suburban critics? While they might prefer strip malls are not built in the first place, this does seem like a good use of resources.

2. When people argue that small businesses are really important to the American economy, how many of these small businesses are in strip malls? Could the humble strip mall be one of the backbones of the American economy?

3. This is tied to larger issues about redevelopment in mature suburbs. In American metropolitan areas, many suburbs are built-out and have no large land parcels for new development. There is a lot of potential then for utilizing existing structures or knocking them down and doing something new. If people don’t like strip malls, what would replace them? How much density are suburban residents willing to accept in their neighborhoods or nearby?

In defense of Portland

Mark Hemingway takes aim at Portland, Oregon in a long cover story in the Weekly Standard:

Unlike the New York Times, I write not to praise the place but to note the litany of things that plainly have gone wrong. Also to alert anyone else who’s listening: Right now, America’s civil and social engineers are beavering away trying to turn your city or town into the next Portlandia.

Mark’s piece is a rambling barrage that roughly summarizes as follows:

  1. Portland gets a lot of attention from the media, particularly the New York Times and via the TV show Portlandia (paragraphs 1-14).
  2. Portland is crazy-town (“quietly closing in on San Francisco as the American city that has most conspicuously taken leave of its senses”) (paragraphs 15-20)…
    1. …because of its development policies, particularly light rail (paragraphs 21-37);
    2. …because of its “generally hostile business climate” (paragraphs 38-53); and
    3. …because of its lax sexual mores (paragraphs 54-84).

A few thoughts re: development policies.  Mark suggests “[t]hings began to unravel in 1973, when the Oregon legislature required cities in the state to set development boundaries with the goal of preserving farmland.”  Portland responded by “cancel[ing] a major interstate freeway project” in order to start a light rail system.  Mark objects to this decision because (a) the light rail has low ridership (“It’s called ‘light’ rail not because the trains are less heavy, but because it’s more lightly used by the public than, say, New York’s subway or Washington, D.C.’s Metro”) and (b) it allowed “Oregon’s integrated land use and transportation planning system [to be] manipulated to award [a former-politician-turned-consultant’s] clients hundreds of millions in state and city contracts relating to light rail expansion and the accompanying high-density developments.”

While I’m certainly no expert on either Portland or light rail ridership statistics, a cursory web search turned up this Wikipedia article suggesting that Portland’s system ranks 4th in ridership among similar U.S. systems and ahead of (much larger) cities such as San Diego (5th), Philadelphia (6th), and Dallas (7th).  And as far as the revolving door between local politics, consultancies, and developers goes, it strikes me that this is a problem that has little to do with light rail as such.  The placement of new roads and highways is similarly susceptible to backroom-dealing that favors the wealthy and well-connected.  Mark makes no effort to explain why corruption (whether of the “small-c” or “big-C” variety) poses a bigger or more inherent problem with publicly funded mass transit projects (e.g., light rail) than with publicly funded car-based projects (e.g., highways), and I fail to see an argument so obvious that it needn’t be even implied (let alone spelled out).

A few thoughts re: Portland’s “generally hostile business climate.”  Mark begins by quoting extensively from a 2010 op-ed written by the chairman of Nike, a company started and headquartered in Portland, which opposed an increase being considered in the state income tax.  Whatever the merits or demerits of the tax increase or this two-year-old op-ed, it is hard to understand why Mark cites this as his leading example of Portland’s hostile business climate in particular rather than Oregon’s in general.

Worse, this op-ed is the closest Mark comes to criticizing Portland directly.  In the subsequent paragraphs, he (a) tells the story of his own grandparents as an example of the “upwardly mobile, working-class life now seems out of reach for much of the city,” (b) notes that income is unevenly distributed in Portland (“Don’t tell Portland’s scabies-infested Occupy camp, but between 1980 and 2007, the share of wealth earned by Portland’s middle quintile declined by about 20 percent, while the top 1 percent’s share doubled”), and (c) rises to defend “the traditional working class” from “the new hipsters.”

  • (A), the fact that the WWII generation could be both “upwardly mobile” and “working-class” is well documented, as is the fact that similar opportunities are vanishingly scarce for younger America today.  While I am certainly happy for Mark’s grandparents, it’s hard to imagine that today’s public school teacher and bus driver will, in 35 years, “retire to a farm…[and] rais[e] quarter horses.”  And it’s not likely that choosing to live in Peoria rather than Portland will make any difference.
  • (B), the fact that income is unevenly distributed in Portland only proves that Portland is normal relative to the rest of the U.S., not that it is a statistical outlier.  Moreover, without further explanation, it is unclear why Mark thinks uneven wealth distribution contributes to a “generally hostile business climate.”
  • (C), as his sole example of hipster-on-working-class attacks, Mark cites a five-year-old Willamette Week article which makes reference to “drunken red-neck[s].”  Apparently, Mark did not read the prologue to the article, which clarified that it was a humorous “series of bitter, petty, pessimistic rants that generally s**t on everything—and hopefully poke holes in the Portland hype” in order to “persuade prospective Portlanders not to crowd out our way of life for a little longer.”  Whatever one thinks of this brand of humor, it’s as surprising as it is clear that Mark missed this context and tone.

One final note.  Mark does begrudge respect to Portland’s small businesses, though he apparently can’t resist a few barbs:

While it’s hard not to root for entrepreneurial initiative wherever you find it, in Portland it carries a whiff of desperation. I submit that the real reason Portland has a thriving artisanal economy is that the regular economy is in the dumps. Portland’s hipsters are starting craft businesses in their garages and opening restaurants not merely because they “reject passive consumption” but because they can’t find jobs, the kind that offer upward mobility.

Perhaps Mark should re-read that 2010 op-ed he cited.  Before Phil Knight was a multi-billionaire and the chairman of a Fortune 500 corporation, he was just another small business owner with “a whiff of desperation” about him:

Forty-six years ago [as of 2010], when Mark Hatfield was governor, I started a small business in Oregon. In our first year, sales totaled $8,000. I am proud that [Nike] eventually became a major employer in the state.

It has been my hope that other entrepreneurs would similarly pursue their dreams in Oregon.

Today, across the U.S. and not just in Portland, “the regular economy is in the dumps” and people “can’t find jobs, the kind that offer upward mobility.”  If “a small city like Portland” has enough entrepreneurs to open “671 food trucks”, I say we should encourage them.  The last thing we need is for the supposedly conservative Weekly Standard to ape the Willamette Week in its quest to publish “series of bitter, petty, pessimistic rants that generally s**t on everything.”

Are strip malls at “the end of the road”?

One sociologist argues that while strip malls have seen much better days, they can be transformed in ways that they can once again be beneficial:

Strip malls — once anchors of postwar North American suburban neighbourhoods — are doomed, with thousands across Canada and the United States already derelict and eyed by land developers.

But at least one Canadian academic sees value in maintaining the ubiquitous local retailing plazas, and has amassed proposals such as adding community gardens or toboggan slides, or morphing them into giant bee hives or parking lots for food caravans.

“Strip malls were once the economic hubs of new suburbs,” said Rob Shields, a sociology professor at the University of Alberta in Edmonton, who received a government grant to rethink strip malls to benefit communities around them…

More than 11 per cent of strip malls in North America are derelict, representing 27 million square metres of vacant retail space, according to the Washington-based Urban Land Institute.

You can see some ideas generated for “reinventing the strip mall” here. This sounds like it fits into a larger idea, retrofitting, where developers and planners take “failed” projects, such as strip malls or big box stores, and design more sustainable, more urban places.

A few more thoughts:

1. If the strip mall is indeed in inevitable decline, I wonder if anyone is tracking what happens to all of the old strip malls. Is there a common use for them or more frequent uses? Will a majority simply be demolished and replaced with something more profitable?

2. It would also be interesting to hear how suburbanites themselves perceive the decline of strip malls – do they prefer “power centers” or is there something lost when strip malls disappear? Perhaps many won’t rue the loss of strip malls because of their very functional design but there may be more who don’t like the disappearance of some of the businesses, like Radio Shack, that once thrived in strip mall size settings.

3. Are strip malls excellent places for small businesses to start and thrive? Perhaps they are not used in this way but I was trying to think of commercial uses that might be particularly suited to a strip mall.

Small but taxing

Following up on Brian’s post yesterday on taxation, I just found a 3/29 Wall Street Journal story with some eye-opening tax numbers:

While it’s difficult for large businesses to keep abreast of changing regulations, small businesses pay a disproportionate amount to adjust to new rules. In general, the cost of tax compliance at smaller firms is $1,518 per employee, compared with big companies, which pay about $517 per employee, according to a 2010 study from the Small Business Administration’s Office of Advocacy. [emphasis added]

This throws a rather new light on the “benefits” of temporary, one-off tax breaks aimed at small businesses, doesn’t it?

In other tax news, “Tax Freedom Day” is April 12th this year, though this varies depending upon the tax burdens of your particular state of residence.  Congratulations to Mississippi, Tennessee, South Carolina, Louisiana, South Dakota, New Mexico, and West Virginia, whose residents are (statistically speaking) already through with taxes for the year!