Vacant storefronts — a challenge and an opportunity
by James A. Bacon
The stay-at-home orders prompted by the COVID-19 epidemic accelerated a trend that was already reshaping the American economy: the shift of commerce from bricks-and-mortar retail to online delivery. Traditional retailers are retrenching; malls and shopping centers are hollowing out. If current trends continue, we’ll be seeing a lot more UPS and Amazon trucks cruising through our neighborhoods… and a lot of vacant retail space.
This seemingly irreversible trend will create dramatic challenges and opportunities for Virginia communities. Local governments rely upon the property taxes generated by malls and shopping centers. As those properties empty out and lose value, local governments will see an important revenue source erode. That is a problem, to be sure. But the decline of bricks-and-mortar also presents Virginia localities with once-in-a-generation opportunities. The potential exists to address two of Virginia’s chronic issues: affordable housing and traffic gridlock.
The scarcity of affordable housing in Virginia, especially in high-growth counties, has become increasingly acute in recent years. Construction of new dwelling units has not kept pace with household formation, and housing shortages have pushed up rents and sales prices faster than incomes have risen. Home builders would be more than happy to build more houses, if only they could find the land and gain zoning approvals from local governments to do so. Meanwhile, congestion is reasserting itself on Virginia’s Interstates, highways and arterials. There is not enough money to build our way out of gridlock.
While no solution is perfect, the least imperfect is to recycle old retail districts into “walkable urbanism” resembling pedestrian-friendly places such as Arlington, Reston, or downtown Richmond and Norfolk.
Building mixed-use projects will create new housing stock, ameliorating the scarcity. And by shrinking the physical distance between destinations, mixed-use development can take pressure off local roads and highways. With walkable urbanism more people can walk to their destinations; even if they must get in their cars, they driver shorter distances. By reducing the number of vehicle miles driven, transportation-efficient land use may not eliminate congestion, but it can ease the strain .
Thanks to the e-commerce revolution, land once dedicated to low-density retail buildings and parking lots is becoming available. Even better, many properties are located on high-traffic transportation corridors that lend themselves to mass transit. Recycling shopping centers into walkable, mixed-use projects would increase the housing stock and ease the strain on local transportation networks.
The immediate problem is that local zoning codes, which segregate residential, commercial, and industrial land uses, typically restrict the use of old shopping centers. To redevelop property at higher densities with mixed uses, developers must apply for special use permits, which can be expensive, time-consuming and risky. Local governments must rewrite their zoning codes to allow land uses to evolve in concert with market demand.
Undoubtedly, many Virginians will resist what they see as an attempt to impose “smart growth” on their communities. But localities can protect existing single-dwelling neighborhoods by funneling growth into areas already zoned commercial. There should be enough land, if redeveloped at higher densities, to accommodate the next generation of growth with few negative effects. The idea is not to empower planners to remold communities according to some progressive “green” vision. A conservative version of smart growth would free developers from restrictive codes and plans, inspire innovation, and ensure that developers can build projects that match market demand. Such a future would be greener, but only to the extent that people voluntarily embrace it.
For the past two or three decades, there was considerable pent-up demand for walkable urbanism. Thanks to zoning codes, developers couldn’t build enough of it. There is a risk that COVID-19 will re-write the supply-and-demand equation. Many Americans have decided they no longer wish to subject themselves to the infection risks associated with elevators, mass transit, and denser urban living. Realtors have noted a surge in the number of families abandoning center cities. If this trend persists, the walkable-urbanism strategy could unravel. I believe, however, that urban flight is temporary and that the advantages of urban living — mainly proximity to mating markets and job markets — will reassert themselves. Even if I’m wrong, localities lose nothing by allowing developers to recycle old shopping centers if and when the market permits.
Eventually, the COVID-19 threat will recede, and old problems like affordable housing and traffic congestion will reassert themselves as priorities. Virginians should take full advantage of the opportunity that now exists to literally build a better world.
