Downtowns, High Street, and Creative Destruction

For the past 40 - 50 years or so, downtowns have been losing business, losing property value, and losing in general. Initially they lost to the big malls that located on the fringes of cities. And then even the malls struggled, losing to the big-box plazas even farther from the downtown core of the city. The same thing is happening on High Street in the UK [ht MA]:

It simply isn’t good enough to just wring our hands and reminisce about the good old days on the high street,” Mr Grimsey writes in The Sunday Telegraph.

The former DIY executive said he decided to conduct [a separate] review after the Portas Review was released in December 2011. “Amid much fanfare this promised the earth but delivered little,” he claimed.

“It was clear to me that Portas had failed to highlight to Government the dramatic structural changes impacting the retail industry through the convergence of changing consumer behaviour driven by technology and that brought about by the prevailing economic conditions.”

I.e., things have changed.

I used to love the old downtown department stores (and still thoroughly enjoy the classic one surviving in downtown London [Kingsmills] that has an elevator operator and uses pneumatic tubes to send things from pay stations to the office). But for the most part the downtowns, as we remember them from the 50s, 60s, and 70s are gone and will never return. Nostalgia is nice but we need to accept this.

What happened?

The demise of downtown is the result of a number of forces:

• cheap cars and cheap personal transportation. Back when families had only one car, if that, people often rode public transportation to the downtown area to do their shopping. As more people want to drive rather than take public transportation, parking also becomes more of a hassle downtown.
• increased labour force participation rate of females. Often in the 50s - 70s, women were primary homemakers and did the shopping for the family. But the opportunity costs of their time as homemakers grew so much that many, many more women work now and find it easier to stop at a mall or a plaza to do some quick shopping.
• big-box stores and the internet. When customers can look at online product reviews by brand name and see what the prices are like, they (we!) tend to prefer shopping at convenient suburban locations to driving downtown and trying to park. We don't need knowledgeable salesclerks so much anymore; all we need are brand names, reviews, low prices, parking, and convenience.
• weather. In weather that is either too hot or too cold or too wet, it is much nicer to stay protected in your car and drive to a mall or big box plaza, vs. taking a bus downtown and wandering from store to store. Someone recently asked about our memories from downtown London during the Christmas season. Lots of nostalgic folks talked about store windows or the Santa Claus parade; but I wrote about slush, being cold and wet, and scurrying from store to store, just to stay warm.

A little over 20 years ago, I wrote a column "I Love Malls" in which I set out these observations, albeit less-well-thought-out. At that time I hadn't seen the draw that big-box plazas have, where people choose a store and drive right up to it. That phenomenon has probably contributed substantially to the demise of malls, where, once you park, you still have to walk quite a distance inside the mall to get to many of the stores.

One group of beneficiaries of attempts to "save the downtown" are the owners of the downtown land and buildings. Businesses can, and do, move to the malls or the suburban plazas. Employees can, and do, find jobs elsewhere. But the land and buildings are pretty hard to move. 

And so politicians, in concert with the downtown owners, try all sorts of schemes to "save the downtown", including:

1. make sure all the buses go through the downtown via  a spoke and hub pattern rather than a grid pattern.
2. build a pedestrian mall/walkway or two.
3. spruce up the downtown with art and murals.
4. provide more "free" parking downtown.
5. or, as happened in Muskegon, Michigan (where I was raised), tear down some of the buildings to provide parking and enclose the rest to make a huge downtown mall.

These schemes are rarely successful other than for the construction companies and artists who benefit from the projects. Indeed, the downtown mall in Muskegon has since been dynamited, and there is almost nothing left of the original downtown or the mall that replaced it; it is an empty space. All the shopping has moved to suburban malls and plazas. I admit I find that sad, and that as MA wrote to me, it has left both the city and the downtown empty and soulless. 

More typically, what happens in the downtowns is that eventually landlords realize conditions have changed. They lower the rents and other types of business move in: tattoo parlours, head shops, and charity shops of various sorts move in where there had once been fashionable clothing and shoe retailers. Or professional offices and the expanding local gubmnt bureaucracies fill some of the larger buildings. And, of course, during the painful transition, some remain vacant and are easy targets for vandals. 

The sooner local politicians recognize and accept these trends, the better off cities and their taxpayer will be. 

Digression: I have noticed from old photographs of the downtown areas of Muskegon, Michigan (where I was raised) and London, Ontario (where I have lived the bulk of my life) that in the old days, stores had awnings. These awnings provided pedestrians with protection from the rain and sun and kept the stores cooler in the summer. Those are mostly gone now that stores are air conditioned.