
Lessons learned from a failing local mall - oftenwrong
https://www.strongtowns.org/journal/2018/4/23/bon-ton-gone
======
burlesona
There’s a lot of over-summarizing going on in the comments here. The context
you need to understand the Strong Towns argument is that this isn’t an appeal
to nostalgia. Rather the author is trying to point out that the transition to
the suburban centralized retail model was heavily subsidized by local and
state governments, and that it actually hurt the local economy in the end.

The problem is that same public infrastructure subsidy program remains the
principal model of “economic development” across the US.

The main case Strong Towns is trying to make is that the model does not
produce returns (ie local tax income less infrastructure maintenance and
public service liabilities) that justify the investment, and thus we need to
stop using it.

~~~
endorphone
The "subsidy" argument is usually based on absolutely nothing credible beyond
someone saying "money was spent on something that I don't think/no longer
think is worthwhile...therefore, subsidy". If that's the basis of this thought
piece, minus any credible analysis (and no, saying "a whole retail/business
downtown produces more tax income than a single failed mall" is not an
analysis), it isn't worth considering.

"the model does not produce returns (ie local tax income less infrastructure
maintenance and public service liabilities) that justify the investment"

It doesn't make this case at all. It alludes to it, as if decades of tax
revenue and benefits were imaginary, but it doesn't make a credible case.

~~~
Retric
Infrastructure like water pipes and roads are expensive to build and maintain.
Lower density areas like malls increase these costs. That's fine in boom
times, but from pure economics such areas can easily fail. You can say subsidy
or situation normal, but the costs are the same either way.

Resilience is just a simplification, online retail among other things is
killing malls and that's ok. It's trying to fight that trend that's a losing
strategy.

~~~
pmorici
Is high density really costs less then why are tax rates always higher in
large dense cities than they are in the near by suburbs?

~~~
ckarmann
Taxes don't pay the same thing in dense cities as in the suburbs. Public
transport for example: in a dense city taxes pay for bus, subways, tramways,
bike lanes, sometimes subsidized bike sharing. In a lot of suburbs none of
this make sense because everyone has to have a car anyway, so people only pay
for roads. In the end, what you pay for your car could very well be higher
than the differential in taxes. That's how the dense city is more "efficient".

More over, people living in a suburb only pay for a part of the roads they use
in their daily commute. My (dense) borough actually did a study that showed
80% of the traffic going through our streets were people who would not stop
there, for example because they are commuting between a suburb and the city
center nearby. So city dwellers pay for roads that are mostly used by other
people. And since the traffic we get this way is quite intense, there's a good
amount of road repair each year.

~~~
burfog
People pay the property taxes wherever they go. If you rent a home, your
landlord pays property tax. If you work for an employer, your employer pays
property tax. If you go out to eat, the restaurant pays property tax. I
suppose some federal and religious things may be exempt, but that is also the
case with non-commuters.

So a person who lives in the suburb but works and shops in the city will be
paying most of their property taxes in the city, via their employer and the
shopkeepers.

It's taxation without representation. Perhaps they should also get a pro-rated
vote. :-) It could be based on time spent in each location, or economic
activity in each location, or simply 1 part for each kind of activity spent in
each place.

~~~
Retric
Unless your personal office is 1000+sf the property taxes on workplaces and
restaurants are relatively tiny. A shop that has 1 customer per minute over 10
hour days sees 18,000 people a month who each pay for about a square inch of
property tax.

PS: They also do vote based on who they work for and what shops they do
business with.

------
curtis
Many smaller cities and towns have suffered the loss of vibrant downtowns, but
I can't help but wonder if we are misidentifying the causes.

Over the last half-century (probably more) we've seen a big part of the
economic base for these small cities and downs either disappear or move away.
Agriculture used to play a much bigger role in the economy as a whole, and a
particularly large role in the economy of many small towns. And manufacturing
used but much more distributed across the country in smaller cities and towns.
But a lot of those factories have closed down.

As a consequence the tax base in may of these towns and cities didn't go away
simply because retail businesses moved out of the city limits. They may have
gone away because the entire GDP of the surrounding area dropped.

For reference:
[https://commons.wikimedia.org/wiki/File:Sectors_of_US_Econom...](https://commons.wikimedia.org/wiki/File:Sectors_of_US_Economy_as_Percent_of_GDP_1947-2009.png)

~~~
bunderbunder
And yet, if either my hometown (population 6,000 when I left), or the small
town where I went to college (35,000) had retained their downtowns and their
walkability, I might still live in them. I don't farm, I don't work in a
factory. But I do telecommute, so I can set up shop pretty much anywhere. And
I do have a soft spot for the kind of small town full of character that I
spent my childhood roving semi ferally with my friends and our bikes, popping
in and out of ice cream shops, chalking up the sidewalks, buying trinkets at
the variety store, playing in the town playground, etc.

I'd like for my kids to have something like that.

The closest approximation I can find seems to be a city with a population in
excess of 1 million.

Or at least, that's where the sidewalks and community playgrounds are.

~~~
ggg9990
Those kinds of communities aren’t created by towns full of telecommuting
programmers — they are created by diverse economic activity and people out on
the street doing their jobs.

~~~
Doctor_Fegg
Kind of. I live in a town with a population of 3,000 which has a town
playground, kids whizzing around on bikes, a handful of little local shops
(plus four pubs), etc... and yet it's full of telecommuting programmers.

The main disadvantage is that property prices are high, largely caused by the
real commuters rather than the telecommuters (we have a mainline railway
station); and that's meant a slow decline in the number of local shops simply
because conversion to residential use is much more lucrative. But we've pretty
much stabilised now.

This is in the UK, and it's not rare over here - there's quite a niche for
slightly boho, close-knit small towns. Hebden Bridge, Stroud and Frome are the
best known (populations 4.5k, 12k, 26k respectively) but there are plenty
more.

~~~
isostatic
Which town is that?

Hebden Bridge I always got the impression was a bit touristy (as well as being
the lesbian capital of the country). A bit further south to Marsden, also on a
rail line into Manchester and Leeds, is remarkably cheap

------
martin_drapeau
I live in a healthy and safe small neighborhood in Montreal. We walk to local
stores some of which are thriving, while others are dying. Quality of life is
very high, and the price of homes keep on rising.

Thriving local commerces are service oriented: restaurants, pharmacies,
grocery stores, hardware stores and dollar stores. Dying stores are product
oriented mostly because of online shopping and big retail.

I do long for small local retail stores with good prices and products. The
only way this could work is for specific verticals. I.e. men’s clothing. I
imagine the store would need to be online first with a global recognized
brand. The brick and mortor stores in local communities would become presence
(a marketing cost, not a profit center). Frank ‘n Oak is an example of that. I
would like to see more across more neighborhoods and verticals.

~~~
mooreds
I found it interesting that the author of the post didn't mention online
purchases once.

In my mind we are going through a shift in purchasing habits just like mail
order retailers provided in the early 20th century. Set aside the subsidies to
malls.

People actually prefer to purchase products online. Selection is better,
pricing is better, it is easier to comparison shop, and it is delivered to
your home. What's not to like (for many types of products)?

If you are in retail, selling the experience and other aspects of an in person
interaction that can't be provided by an online retailer is the way to win.
Some aspects include:

Community involvement

Interaction with experts

Immediacy

Hands on education

Cross selling consumables

Don't fight the battles of the past, and recognize that this is just one more
evolution that the customer wants.

~~~
parrellel
We probably are going to head further back toward the old catalog mode that is
online purchasing.

But.

It's a drop in the bucket compared to the debt load killing box stores from
all the leveraged buyouts, and that has nothing to do with consumer demands.
It might have something more to do with corporate raiders running out of
factories to raze.

------
mindslight
The author is characterizing the economic trend as if it were a deliberate
choice, and ignoring the specific reasons for that trend. Back when _stuff_
used to be scarce, hard to find information about, and the supply chain needed
to push a mass quantity of stuff onto the shelves to induce demand, it made
sense to spend hours grazing over the collection in person in stores.
Likewise, the margins were high enough to support the overhead of this.

Then, the downtown's vibrant selection disappeared for the same reason the
malls are now closing up - we no longer need or want to do that. In concert,
margins have been getting ever lower while competition has become even more
cut throat - eg the modern ability to go into a store to physically browse,
and then purchase from somewhere else online before having even left that
(money losing) store! So even those who want to browse in person are paying
progressively more and more to do so.

And keep in mind, all of this local retail wasn't/isn't actually bringing
money _in_ to the area! (unless it's the biggest town around, in which case
draw your boundary conditions larger)

I do personally respect the need for a local economy, and recognize that the
dream of efficiency hasn't delivered on its promise [0]. But reminiscing about
the time when the consumer-stuff-delivery industry was effectively in its
startup phase isn't going to help.

[0] I argue it's due to monetary policy that has an explicit goal of
nullifying any savings by consumers, but I digress.

~~~
dnomad
Yeah, _stuff_ was never scarce. I don't know where on earth you got that idea.
After World War 2 the US stumbled upon the greatest wealth creation machine
the planet has ever known, a consumer-driven economy that literally printed
trillions of dollars for decades and is still mostly going. Americans have
never wanted for stuff for the last 70 years. (There was hiccup with the oil
situation there for a bit but that was cleared up.)

The issue is that some of the "stuff" Americans wanted was cars and big
houses. The country bet _big_ (again to the tune of trillions) buying a crap
ton of cars, building endless roads, and building big houses out in the middle
of nowhere. It's this model that drove the creation of the uniquely suburban
mall. And this was a deliberate choice driven by the government at every
level. The history of post-war America is the history of government-subsidized
urban sprawl.

It was a big mistake and one that the country will be paying for, for the next
century. It's simply not sustainable. The economic forces at work here are a
consequence of the laws of physics. Big houses and big cars far from the
"noisy, dirty" city are _expensive._ Everything gets cheaper as density goes
up. At some point some critical services become practically free due to market
volume and competition. (In highly dense Asian cities it's possible to eat
decently for $5/day. That's breakfast, lunch and dinner.)

The other side of this equation is that American wages have collapsed. Forget
growth, forget stagnation, wages are going down and the coming generations
will be poorer than their forbearers. So while it was possible for the average
Joe in 1965 to afford a big car and a big house far outside the city, 2020 Joe
will not be able to do that and eat and have health insurance. And this is
where physics kicks in: Americans can no longer afford the entire "exurb
lifestyle" that they love so much. Economic success now lies in the city.

The lessons to be learned here are not new. They are as old as human
civilization. Prosperous empires over-expand and over-build and eventually
collapse due to endless war, internal conflicts and better competition.
Density wins because it is much, much more efficient (especially in a highly
competitive and dynamic globalized economy). And, most importantly,
sustainability matters. A lot. Sustainability may be all that matters. Human
laws aren't laws at all -- the right lawyer, the right judge, the right bribes
can turn most laws into minor obstacles. Every (human) thing can be
negotiated. The only laws that _can 't_ be broken or subverted, that can't be
negotiated or changed, are indeed the laws of physics and biology.

~~~
mindslight
So while I sympathize with the overarching view of your comment, the details
are too incoherent for its being so argumentative.

> _Yeah, stuff was never scarce. I don 't know where on earth you got that
> idea. After World War 2 the US stumbled upon the greatest wealth creation
> machine the planet has ever known_

So how does this mean stuff was not scarce before WWII?

> _Big houses and big cars far from the "noisy, dirty" city are expensive_

So, given that they'd already been afforded at one point, the real problem is
declining income to cover their carrying cost. So let's focus on that rather
than a red herring of one symptom. If it's a given that wages will go down
forever, then why even worry about regrouping in the cities when that would
only stave off the trend for a few decades? Better to focus on the reason real
wages are going down!

> _Prosperous empires over-expand and over-build and eventually collapse due
> to endless war, internal conflicts and better competition. Density wins
> because it is much, much more efficient_

These two bits do not follow. If empires collapse due to being trapped into
being too spread out, then that implies it is impossible for them to naturally
shrink back down and grow denser! Still I would posit this applies in the much
more general sense of spread out in the world rather than a single defensible
landmass. I'd venture to say those foreign military bases in all of the
colonies use a lot more resources (including the wars they encourage!) than
people commuting from suburbs, my own love for walkability notwithstanding.

PS You can't bounce back and forth between the economic paradigms of resources
and financials. While better competition makes prices lower, that doesn't
affect resource usage in a major way - compared to say economies of scale.
Don't conflate the two.

------
PKop
Everything said here could also apply to the manufacturing and industrial base
of US, outsourcing these jobs for cheaper manufactured goods... eventually the
country can't productively sustain itself and the "lower prices" don't make up
for it.

Isn't this part of the premise of "locally sourced" food etc? Pay a little bit
higher prices to ensure the areas workforce is sustained.

I'd say actually the "lower prices" don't make up for lost jobs much sooner
than when you start to see multi-national replacements struggle. Many
previously employed depend on government assistance so there is an immediate
cost, as well as current epidemic levels of opiate addiction and death,
partially explained by economic hopelessness.

~~~
tim333
I'm not sure manufacturing is that similar. US output is at near record levels
[https://fred.stlouisfed.org/series/OUTMS](https://fred.stlouisfed.org/series/OUTMS)
and companies that outsource like Apple are sustaining themselves fine. There
is less employment in manufacturing but its probably more down to more
efficient manufacturing technology combined with 'peak stuff'
[https://hackernoon.com/welcome-to-peak-
stuff-e699820c7e9b](https://hackernoon.com/welcome-to-peak-stuff-e699820c7e9b)

------
bjt
I see a mix of good and bad arguments here.

I believe the story of Bon-Ton and Herberger's being over-leveraged. It's
happened to a lot of retailers lately (Toys R Us for example). And I'm
sympathetic to his claim that they "had a fragile business model, one that was
far too responsive to investors far beyond our little city limits."

But a few things undermine his argument:

1\. He makes a passing reference to Herberger's having "cheaper clothes"
compared to the downtown stores, but that's not really doing justice to the
fact that the downtown stores went out of business because the local people
preferred the prices and products at Herberger's. No one issued an edict
saying "there shall be no more mom and pop stores downtown."

2\. He complains about Walmart, Target, etc. being "in the neighboring city".
But if you look on Google maps, the distance from downtown Brainerd to Walmart
is 3 miles. A 7 minute drive. That is not a major inconvenience for residents.
It sounds more like sour grapes from a city planner who resents the commercial
taxes going to Baxter instead of Brainerd.

3\. He mentions the sewer, water, and roads that were built to support the
mall location, without identifying who paid for them. Was it the town, or the
developer? I'm worried he's trying to puff up his argument by being vague
about this.

~~~
crankylinuxuser
> No one issued an edict saying "there shall be no more mom and pop stores
> downtown."

In our case, here in Bloomington, IN, that's precisely what happened. The
owners (primarily Indiana University Foundation) raised rents on the city
square. They tripled rents.

It's knocked 2 businesses right out. They couldn't relocate, because the
previous locations were destroyed for "affordable housing for rich foreign
students". Read that as rents hovering around $1500/mo. So what did those
businesses do? They went out of business. Gone. But hey, we'll get more
overly-expensive housing!

> It sounds more like sour grapes from a city planner who resents the
> commercial taxes going to Baxter instead of Brainerd.

Unfortunately, there's one main topic that dismisses this reasoning. 10 year
abatements. I've seen the abatements come up again and again. It's a form of
corporate welfare. Where's _MY_ abatements? Where's the small business
abatements? Where's the 'small guy' relief?

Well, to put it bluntly, "We don't get no relief". Big business has this hand-
wavey ambience that we somehow absolutely want them here, for perceived
benefits. But what it amounts to is a shell game with corporate welfare, money
exfiltrated out of the community, and a worthless husk in a few decades.

> He mentions the sewer, water, and roads that were built to support the mall
> location

It's regardless who initially paid for them. Those pipes are there, and will
require significant upkeep to keep them in any sort of standard. And those
business again, with abatements, aren't paying. And nobody's paying if the
malls are dead and shuttered. Those pipes are what I would call a "Toxic
Asset". And that's before discussing massive water quality issues we're seeing
in small and midrange communities around the country. Flint's the worst, but
happening in hundreds of areas.

~~~
ams6110
I've been to Bloomington Indiana, the downtown is thriving, at least from what
I can see. A lot of new buildings. Hotels, apartments, restaurants and shops,
hardly a vacancy to be seen. A good number of bars of course. It's a college
town. The economy is going to be dominated by students and the University.

------
opencl
The core of the argument here seems to be that the current downtown is more
'financially productive' than the mall, but it also seems that the entire
reason the downtown is financially productive is that it _isn 't retail_. As
the article notes, the downtown retail shops all went out of business decades
ago because they weren't making any money. Why would downtown retail magically
be super prosperous today if the mall hadn't been built back then? The entire
brick and mortar retail industry is collapsing right now. Presumably most of
what's left is office space, and of course office space would rake in more
money per acre than retail.

~~~
state_less
Why go into an office though? Isn’t business also running into the same
overhead with physical space? It costs money to rent this space and much
office work is information based now, isn’t it better for most of us to simply
stay at home in the Information Age?

It’d be nice to make these old malls with well connected roads into places
where digital nomads can hang out, live and commune with one another. Add some
tiny homes and maker spaces, fiber optic broadband and fast wireless. Put up
some solar panels on the roof and by all means, listen for what is coming with
the next generation.

------
AuthorizedCust
This is an exercise in nostalgia. It's not a prescription for the future.
Downtown-centric planning isn't the only valid tool, but it's the only one
that New Urbanists seem to know.

Where's the intelligentsia for those of us who don't want to live in small
boxes, on top of each other, and don't want to live next door to businesses?

~~~
crankylinuxuser
There are some valuable ideas they brought up.

Mega-businesses, like JC_Penny, Walmart, Nordstroms, and similar do open up in
an area, but all profit gets siphoned elsewhere. It makes wherever $BigCo's
Headquarters much richer at the expense of every community they go into.

Whereas, the little one and two store local business takes money from local
people, and its turned right around and reinvested in that very community.

One drains a community of its wealth, while the other bolsters it.

Politicians have always (in recent years) accepted that $BigCo moving in is an
absolute boon. And the politicians award the business with abatements, tax
writeoffs, and other vehicles to "sweeten the deal". But none of the small
businesses have these connections. Nor can they request abatements, or low to
0 interest loans.

But as we see, once a chain starts haemorrhaging, every community with one of
these carcasses ends up rotting the whole area at its core.

~~~
jonknee
> Whereas, the little one and two store local business takes money from local
> people, and its turned right around and reinvested in that very community.

It's a common one, but I don't really buy this argument. Small local
businesses don't usually hire more people than large chains and they don't pay
their employees more. Small shops are notorious for low pay and no benefits.

In the case of a discounter like Walmart the profits don't get siphoned
elsewhere as much as never spent in the first place. There may not be a local
shop owner anymore, but everyone else in the community has spent less money.

~~~
coredog64
Just to add to this, WalMart is primarily a grocery store. Like most grocery
stores, it has a net profit margin that hovers around 3%.

The Waltons are not rich because each WalMart vacuums money out of a
community. The Waltons are rich because there is a metric shit-ton of stores
that do a high volume of business, and they get their 2-3% slice of it.

~~~
bkdbkd
That would be nice, but they make money from sucking wealth.

When Walmart Comes to Town
[https://economics.mit.edu/files/7575](https://economics.mit.edu/files/7575)

Bloomberg [https://www.bloomberg.com/news/articles/2016-01-25/wal-
mart-...](https://www.bloomberg.com/news/articles/2016-01-25/wal-mart-it-came-
it-conquered-now-it-s-packing-up-and-leaving)

An early Snapper Mower take on walmarts practices:
[https://www.fastcompany.com/54763/man-who-said-no-wal-
mart](https://www.fastcompany.com/54763/man-who-said-no-wal-mart)

[https://www.youtube.com/watch?v=jf-
Sr3SjBzk](https://www.youtube.com/watch?v=jf-Sr3SjBzk)

------
stevenwoo
Has the prescription described worked anywhere - invest in downtown shops
after a mall fails? It does not address people will almost always search for
the better price. We had an article about six months ago talking about how
Dollar General was swooping into places like this or where even Walmart
failed.

~~~
closeparen
Newer malls have done away with cavernous indoor spaces, and _are_ dense
pedestrianized downtowns (albeit not always in the city center, and usually
with ample free parking garages). They seem to be doing pretty well.

~~~
ghaff
I’d say they were a mix but they tend to be upscale in any case. But somewhere
like Santana Row is as you describe.

~~~
Avshalom
That's because they're new. The new mall is always more upscale than the old
mall.

------
scarface74
Malls came about because of tax breaks in the 50s. Now that the buildings are
completely depreciated, it's not as profitable.

[http://archive.wilsonquarterly.com/in-essence/why-america-
go...](http://archive.wilsonquarterly.com/in-essence/why-america-got-malled)

 _An investor making a profit from rental of a new building usually avoided
all taxes on that income, since the ‘loss’ from depreciation canceled it out.
And when the depreciation exceeded profits from the building itself—as it
virtually always did in early years—the investor could use the excess ‘loss’
to cut other income taxes. " With realestate values going up during the 1950s
and ’60s, savvy investors "could build a structure, claim ‘losses’ for several
years while enjoying tax-free income, then sell the project for more than they
had originally invested."_

~~~
lend000
I'm not convinced by this argument -- my understanding is that when you sell
property that you have claimed depreciation on, you have to factor in that
depreciation to your cost basis. So if I depreciated 50k on a small commercial
property I bought for 100k over 20 years and then sold it for 200k, I would be
paying taxes on 150k of income. Granted, you could continue to defer these
taxes and build wealth with 1031 exchanges, but I'm not sure how depreciation
factors into that scenario.

~~~
scarface74
Yes that's true, but while you're both getting tax benefits before you sell it
and you're making money on the appreciating. So you get to "depreciate" an
appreciating asset. Even after taxes, it's a win. Besides, the tenants are
actually paying down the debt. Your only investment is whatever relatively
small down payment you've made. Hopefully tenant rents are enough to pay for
upkeep.

You don't pay cash for the real estate - you take advantage of leverage and at
the most pay 20% out of pocket.

While you own the building, the income you make isn't taxed because you can
claim depreciation against your income. If you take into account the time
value of money, if you take the tax free money and invest that in another long
term asset and sell it, then you pay the much lower capital gains tax.

------
nwatson
I was always struck from the mid-90s till I left the bay area 5 years ago by
that one block of awesome downtown Sunnyvale CA , Murphy St, and the dismal
shopping center next to it that must have destroyed 10 or more similar blocks.
The shopping center went through several unsuccessful remodels , not sure how
it fares now.

~~~
kurthr
Apparently, a lot of that had to do with Prop 13 and various packaged "company
sales" to hold the appreciating property as an investment and avoid increased
taxes while minimizing cash flow. In the end after multiple bankruptcies
(driven by the city council) the land owners needed to make money on their
"new" investment to pay taxes. It's full of shops now with lots of Apple and
other tech employment next to the Caltrain corridor.

It's similar to the corner of 85&ElCamino where the dead Emproium mall sat for
20 years because the landowner paid effectively no taxes on the property while
borrowing on the appreciated value. I don't know if it's true that they only
sold to Sutter Health because of bad investments during the dot-com boom, but
that was the rumor in 2003-4 when it traded hands.

~~~
DrScump
"...the corner of 85&ElCamino where the dead Emproium mall sat for 20 years
because the landowner paid effectively no taxes on the property while
borrowing on the appreciated value."

Source?

In fact, Home Depot had already leased that site for a new, modern store to go
in immediately, but the City Council thought it should be reserved for
"upscale" retail -- a ludicrous concept that, of course, never happened. Read
about the 2000 Measure N controversy. Home Depot stayed in Sunnyvale and
expanded to EPA instead.

I lived literally a block away at the time.

~~~
kurthr
I would note that Home Depot was a proposed lease and not a sale, and people
were most worried about awful traffic immediately next to the highway
interchange (a Santana Row which went in around the same time wouldn't have
been better), but 'that was the rumor in 2003-4 when it traded hands' which I
guess you didn't hear. I lived closer to caltrain.

Edit: If anyone would like a longer reading of the Home Depot kerfuffle-

[https://www.mv-
voice.com/morgue/2002/2002_02_22.hdtimeline.h...](https://www.mv-
voice.com/morgue/2002/2002_02_22.hdtimeline.html)

~~~
DrScump

      people were most worried about awful traffic immediately next to the highway
    

Where _better_ to put a big box store than away from residential property and
landlocked by a freeway?

The Sunnyvale Home Depot has no such traffic issues, and it is only accessible
from Kifer... which is not a big road. The whole "traffic!" issue was a crock
instituted to chase a dream of a "Santana Row West" which never had a chance.
The subsequent new huge Safeway Marketplaces at Hacienda and Bernardo/ECR
create far more traffic, both in car trips and truck deliveries, yet they
engendered no complaints.

The result: the property became a medical center that generates essentially
_zero_ sales tax revenue for the city; that lost half-million a year goes to
Sunnyvale's Home Depot and Lowe's instead.

------
banku_brougham
This is an amazing article for me who has little perspective on the relevant
issues. I now live in a small village satellite of a large city, and see faint
signs of a once thriving local community which seems to have disappeared
decades ago.

Does anyone have some counterpoint to what is discussed?

~~~
closeparen
There’s no reason to think locally owned downtown shops will be competitive
with Amazon unless they are so high-end as to be a destination shopping
experience.

~~~
acdha
I'd restate that a bit more broadly because they have to offer something some
advantage over Amazon which enough people want. If you're dealing with things
which don't ship well, for example, that might work on its own — I don't hear
of many people buying building supplies online for that reason even if they
ruthlessly shop around for the best deals on tools.

Since volume tends to rule in the commodity space I think that usually means
finding a way not to be a commodity. Specialty bookstores are an example
because some are doing quite well because they have top-notch staffing; others
followed Barnes & Nobles’ attempts to use cheaper staffing and have largely
failed. I don't know about other speciality clothing stores but the places
selling hiking, biking, etc. gear seem to be doing well around here because
people like advice & the ability to try something on before dropping a fairly
large amount of cash.

~~~
closeparen
The most successful downtowns are the things that _really_ don’t ship well:
restaurants.

------
Avshalom
Meh, my local mall is failing because they built a different local mall that
was newer, cleaner, felt brighter and all the stores that could find the money
to sign a new lease moved to that one.

Then they built another mall didn't put a roof over it and called it a
shopping destination...

~~~
ransom1538
Reminds me of this chris rock skit:

[https://www.youtube.com/watch?v=80Hke7PrdmA](https://www.youtube.com/watch?v=80Hke7PrdmA)

------
dnr
Focusing on clothing stores detracts from the overall argument (which I'm
mostly sympathetic to) because there's another clear explanation for what
happened to these stores, or what might have happened in the alternate
universe where the mall had never come: people are just spending a lot less on
clothing than they used to.

This was on HN not too long ago:

[https://news.ycombinator.com/item?id=16322720](https://news.ycombinator.com/item?id=16322720)

[https://www.bloomberg.com/graphics/2018-death-of-
clothing/](https://www.bloomberg.com/graphics/2018-death-of-clothing/)

------
eldavido
I generally agree with the article's main thrusts (city living is more
"efficient", better/more sustainable infrastructure), but this is a very one-
sided view.

Sure, cities are more "efficient". They're also more dysfunctional. What you
gain in infrastructure use intensity, you give right back to machine politics,
failing school systems, outright embezzlement/theft of funds, huge pension
problems, entrenched big-city unions, and bad policing. Just watch The Wire if
you want to see what it's like. I live in Oakland, CA, which has had, I think
3 or 4 police chiefs, in the past 3 years.

Perhaps there's some kind of middle ground. A place that's not some spread-out
suburbia where "going into town" is a thing, but not quite SF/NYC-level
government problems where building a subway comes at a price of 3.5 BILLION
DOLLARS PER MILE. [1] Maybe a city of 1 million is about the right size.

[1] [https://www.nytimes.com/2017/12/28/nyregion/new-york-
subway-...](https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-
construction-costs.html)

------
ChuckMcM
Nice but I wish the author had called out the impact of globalization a bit
more strongly. The structure of a Mall or Walmart takes economic output of an
area and sends it somewhere else. That mechanism is that people buy stuff for
cheap at the department store, a fraction of that money stays in the form of
salaries and taxes, and the bulk goes far way to distribution houses and
factories somewhere else. If you don't have something pumping money in, it
eventually all drains out.

When you collapse the entire flow locally so a local factory/tailor making
clothes being sold by a local merchant. Then there is a more immediate return
of the economic product. Customer buys a suit, that was sold by a store that
bought it from a manufacturer, that bought the fabric from a local textile
mill, all of which use machines and staff and other factories and tool shops.

I am not sure how you balance this sort of thing out.

~~~
URSpider94
That’s nice in principle. In practice, the reason we have the system we have
is that it delivers goods to customers much more efficiently than ever. Back
when every small town had its own clothing store, customers were paying enough
for the clothes that the shopkeeper and his/her staff could lead middle-class
lives off of their profits, not to mention all of the people in the nearby
factories who made them. We can go back to those times, but consumers will
have to decide that they are happy having fewer clothing items, keeping them
for much longer, dressing their children in hand-me-downs, and probably still
spending a larger portion of their income on clothing than they do now.

~~~
isostatic
> probably still spending a larger portion of their income on clothing than
> they do now.

As we have spent less of our income on things like food, clothing, etc, and
increased our household income dramatically.

In 1971 median household income was c. £270/week. In 2001 £420/week, in 2011
£460/week. (figures adjusted for inflation to 2013 levels) In 1971 housing
costs were £20/week, in 2001 is was £90 a week, in 2011 £120 a week.

Half of that extra money went in housing costs.

The big changes in income (especially in normalisation of a second income)
from the 70s onwards were swept up in housing. Increase everyone's wages, and
we just spend it on the same houses we had before. On the flip side, decrease
everyone's wages and the amount we spend on houses will reduce. That benefits
everyone apart from wealthy landowners.

------
burfog
What's in a name? That which we call a mall By any other word would sell as
well

The "downtown" is essentially a mall, but exposed to the elements. No normal
mall manager has ever thought "What I really need here is snow, mosquitoes,
panhandlers, diesel smoke, traffic jams, or 90-degree weather with 90%
humidity."

A mall is like downtown, but without those problems. Malls are dying for
reasons that are also hurting downtown areas. Online shopping has been
mentioned. Another issue is that malls have lost their value as a social
meeting place. People used to go to the mall to meet each other. Teens
especially did this, causing them to buy things and to bring in parents with
the serious money. Now people spend time at home poking at their cell phones;
this is how people connect.

------
brownbat
I found this 1982 documentary about malls fascinating, describing them as the
future of shopping:

[https://www.youtube.com/watch?v=G2BlyvN6EeI](https://www.youtube.com/watch?v=G2BlyvN6EeI)

On the one hand, the confident forecasting seems silly in hindsight. You had
malls for a hot moment and you decided they would last forever?

On the other hand, that hindsight is humbling. Things change. What do we know
even now? Society changes. Maybe malls will make a stunning comeback in a few
decades. I can't imagine how. Vastly cheaper land or package shipping becoming
somehow unsustainable, or just the industry cleans house and survives through
attrition.

Or maybe online retail will be forever. Or maybe it will be displaced by
something unthinkable in thirty years. For all I know some AI concierge
service will be a strict dictator over all my finances and purchases, and I'll
never touch money, I'll just receive a box of things the machine thinks I need
each week. Who knows.

We had a thirty year trend that some people thought was forever. It ended, now
we all feel smug, think we learned some deeper truth about society.

StrongTowns is convinced we should (albeit modestly) reinvest in downtowns.

I don't know, that's a lot of conviction for me. Sure, maybe? Am I the only
one who feels like I know less now than when this all started?

~~~
jonhendry18
"Maybe malls will make a stunning comeback in a few decades. I can't imagine
how"

They still make some sense in places not blessed with San Diego weather. The
problem is, people don't have disposable income to spend at them.

(Another problem might be the lack of book, magazine, toy, and music stores.
The stores that are left probably have a clientele that is mostly women, and
males don't have much reason to visit the mall and spend money.)

------
nchudleigh
Well written article really enjoyed it.

------
jonhendry18
Two things I didn't see mentioned: stagnant wages and rising healthcare costs.

I don't think it's a coincidence that malls, especially non-upscale malls, are
dying at the same time there's a proliferation of dollar stores and thrift
store chains like Savers (basically a for-profit Goodwill).

Near a mall where I live there once was a Circuit City. Now there's a dollar
store and a Savers.

Malls are failing because we simply don't have as much disposable income as we
had in the 80s and 90s.

The malls that seem to be doing well are the upscale malls whose clientele
still have plenty of disposable income.

------
guscost
For some great video journalism on this subject, check out Dead Mall Series:
[https://www.youtube.com/playlist?list=PLNz4Un92pGNxQ9vNgmnCx...](https://www.youtube.com/playlist?list=PLNz4Un92pGNxQ9vNgmnCx7dwchPJGJ3IQ)

~~~
scottmcdot
Yes, was just about to post this. Very good series.

------
tacon
Retail is under terrible pressure, and one reason among many is in your
pocket[0]:

"Consumer income has not changed much since 2006, thus over the last 10 years
$190 billion in consumer spending was diverted toward mobile phones. [...]
Between phones and their services, this is $340 billion that will not be spent
on T-shirts and shoes."

[0] [http://contrarianedge.com/2017/07/26/not-just-amazons-
fault-...](http://contrarianedge.com/2017/07/26/not-just-amazons-fault-
changing-consumer-habits-killing-old-retail-biz/)

~~~
MoBattah
I think economic commentators often miss this point.

Its also why I think any coming recession will leave the tech industry
relatively unharmed.

------
hisforehead
Stop buying things.

As for rural areas, why not try something new? Delivery by drone, goods
exchanges, unstaffed warehouses access through a smartphone, 3d printers, fast
book printers.

It's time for radically new ideas to save the rural divide.

------
woolvalley
There are urban malls that only take up one downtown block and don't have a
sea of parking around them, or any site provided parking at all for that
matter.

They can be good for those large blocks where the interior of the block is not
used efficiently because of the size, since mall shops do not need windows to
the outside. Interior urban malls are also great for places where the weather
is bad most of the time.

With the urban malls you can still have a strip of shops around them on their
outsides.

------
adamw2k
Really thinking Jetsons here, but won't we simply be able to print most items
either at home or at the neighborhood print shop at some point in the next 100
years? I recall efforts in the food, metal, and body part space. Shipping and
warehouses become irrelevant, you just buy recipes that can be created in a
very short time. Or maybe I'm living on Cloud 9?

------
k__
Reminds me somehow Walmart failed in Germany.

