In Defense of Strip Malls
As we drive along the large highways through a city, writes Brad Edmonds, it is all too easy to wave one's hand and say: "look at all these unseemly strip malls that make this place look like every other!" But if we are looking for a hardware store, need a cup of coffee, or need some engine repair, our tune changes: we are grateful that we can easily spot the Home Depot, the Starbucks, or the Buick dealer. The locale saves search costs, for which we are glad indeed, and we demonstrate this feeling by voting for them with our own money. That's why they appear. That's why they stay. FULL ARTICLE
Comments (17)
The only problem I have with strip malls and the big box stores that anchor them is the perverse tax incentives given to them by local governments. I feel that a lot of them wouldn't be developed in the first place if it weren't for the tax incentives to do so.
Furthermore, local property tax policies encourage urban sprawl. Open, undeveloped land is often taxed at a lower rate than a developed site; as a result, it is much cheaper to build a whole new site instead of renovating existing construction in town.
By taxing the added value on top of land, government encourages its dilapidation and the construction of newer sites farther outside of town.
As a result of all this is the following pattern in US cities: a continual movement of wealth out of older parts of the city and out to the fringes of town at new construction sites.
This "hollowing out" effect increases the cost of local government as well, with new infrastructure requirements for the gov't. Perhaps that is why local governments pursue these policies:
A more spread-out town = more cops, more roads, more sewage lines, more parks, more everything that the local government provides.
Despite their shortcomings, the Georgists do make some good points.
Published: May 24, 2007 8:40 AM
Strip malls are just another manifistation of a society addicted to happy motoring. They have grown up with the car and will die without it. They are not built for pedestrians or bikers (have you ever seen a bike rack in front of a strip mall?). Strip malls have become the life blood of the suburban life and contribute significantly to urban sprawl. People have moved from the city to the suburbs, but have taken the conveniences of the city with them...local shopping, a supermarket and Starbucks, all found in strip malls. Unfortunately, (or fortunately) it is a convenience that has no future as we pass peak oil and running around in your car becomes prohibitively expensive.
Published: May 24, 2007 9:23 AM
Mark,
I don't but the peak oil theory, but it will still die out.
The more dispersed a city is, the more expensive it is to maintain it's roads, fire/police coverage, power lines, sewage, schools, etc. etc. It's also more expensive for the residents, and the added commute times must add up to untold tens of billions of dollars in lost labor/leisure every year.
There is a movement, however, away from this and back to mixed-use, probably because of the massive costs to maintain a spread out community. In hawaii, where I'm moving back to in a few months, is building a massive 12,000 household mixed use development in West Oahu. There will be mixed homes, condos, shops, and commerce/residential buildings (i.e. a store downstairs and a condo upstairs). In the Sacramento suburbs, similar communities are beign developed.
People are tired of the expensive, time-consuming, bland life of the exurb.
Published: May 24, 2007 9:36 AM
Strip Malls are indefensible.
They are a product of State planning and city development and someones idea of how a "sustainable community should look. They are an example of how pervasive the State is in the market.
I believe they were developed from some retro concept of how the market was two centuries ago and is a devolution of market efficiency.
I live in a city that has one mall and nothing else but strip malls. You have to drive all over the place if you want to pick up several items and for small business I think it is devastating. There is no walk by traffic, people go there to get what they want and move on to the next strip mall for the next item on the list. Impulse buying or reminders of needs is limited. I see empty store fronts in every one of them which tells me the failure rate of small business is increased by this retro concept.
In my view, they serve neither business nor the customer.
I would like to know what the market would have evolved to from gigantic malls without State engineering.
Published: May 24, 2007 9:41 AM
Amen Frank,
Some places are better than others though. In Honolulu, they have an Urban Wal-Mart (that's right -- it almost got canceled when they found a graveyard of smallpox victims at the site), and it's one of the largest in the world. It's efficient, with underground parking, and it's located within walking distance to Waikiki. As long as you only get enough stuff you can carry back, it is a pedestrian wal-mart.
Interestingly enough, Hawaii has a property tax system that encourages people to build up, not out.
Published: May 24, 2007 9:47 AM
What you tax you get less, and conversely, what you subsidize you get more of. Urban sprawl and its ubiquitous strip malls are products of the latter, beginning with the Interstate Highway system and its state and local tributaries.
Let's face it, this massive and ongoing road subsidy all but paid anybody who could afford a car to flee the city, leaving those who could NOT afford a car to rot in the hell-holes that the cities' inner cores soon became.
So spare me the defense of strip malls, as they are only a product of the market insofar as the market has followed the perverse incentives of the state.
Soon, however, the market is going to be following the harsh dicates of Peak Oil, which is likely already upon us but is being downplayed for the same reason that inflation is being understated: the truth must be suppressed, lest the people find out what deep doo-doo their governments have gotten them into.
Published: May 24, 2007 10:11 AM
Shouldn't this article be properly titled 'In defense of the aestetics, convenience, and investment opportunities of strip malls'? It doesn't address tax incentives doled out by local councils, tax-funded infrastructure costs, nor Federal and local grants to refurbish the buildings after the businesses inevitably move on. Why isn't this social/fiscal engineering addressed?
Or did I miss the tacit but pragmatic argument that despite in many cases local governments being not-so-silent partners in these businesses, strip malls are worth it and really reflect the natural order of local markets?
Published: May 24, 2007 10:17 AM
I don't have a problem with strip malls and I don't have a problem with cars.
The original problem is government control of the roads and road-building process.
We have Lincoln to thank for that. It was his program of federally-funded "internal improvements" that was a main goal of his candidacy. They were to be funded by the tariff on imports that was disproportionally paid by the South. The South didn't much feel like paying taxes to build roads in the North, so they seceded. War followed. Simple.
Now, we are still living with this monstrosity, made worse under Eisenhower. He gave us the Interstate Highway System, inspired as he was by his admiration of Hitler's autobahns.
Strip malls wouldn't exist in a world of private roads, because private roads would not consist of giant, 10-lane surface arteries connected to massive super-freeways.
I live in Florida, much of which has been built since the 1950s, and soon after moving here I started calling it the Land of the Giant Intersections. When two 6-lane roads meet, the intersection alone is 250 feet across!
Strip malls are a rational, private reaction to state-built roads. They attempt to provide people with desired goods/services and convenience in spite of the gross inefficiency and inconvenience created by the state of our roads.
Published: May 24, 2007 11:03 AM
Strip malls exist because they have a monopolistic protection from the government through the large-scale functional zoning system.
It is not because people vote for them with their money.
Published: May 24, 2007 11:58 AM
David White,
Do you have any evidence that Peak Oil actually exists? I'm not saying that it won't happen eventually, but we would see the price spiking much more than it is now. If it was peaking already, we would see continious price increases. On the contrary, we're a bit off of the inflation-adjusted price of $85 - $90 a Barrel we saw back in 1980, and we're about where we were in 1982, right before producers adjusted to new demand; producers will adjust to the new demand eventually, which will cause prices to go down.
I would, however, like to see what the price of oil would be if the oil markets were totally deregulated and our security subsidy to M.E. regimes was removed.
Published: May 24, 2007 1:37 PM
Stranger,
Yes; big box and strip mall developers do get monopoly zoning privileges from the local government, but you're missing the bigger picture.
Governments act in their own self-interest, which is to increase their own power.
When low-density zoning is enacted, causing a spread-out development pattern, government expenditures must go up. More Cops, more schools, more roads, more water lines, more power lines, more sewage lines, more fire stations, more potholes to fix, more parks, etc. etc.
If cities instead followed a pattern of in-fill and redevelopment, government spending would stay relatively even, only going up with wage rates and capital replacement.
Local governments, somewhere along the line, figured out the game. I think the Interstate highway system was a major contributing factor.
Published: May 24, 2007 1:47 PM
Nick Bradley,
When I watched this video -- http://video.google.com/videoplay?docid=-596805984521272213 -- and noted the correlation between oil depletion and cheap credit, that finally did it for me -- i.e., endless, non-asset-based credit has greased the wheels of oil consumption in a way that a sound-money economy could not have. And just as the money is government-issue, so is the reserve data, as over 85% of oil production now comes from state-owned operations.
To keep abreast of the debate, I recommend that you tune in to the "Austrian" Financial Sense News Hour -- http://www.netcastdaily.com/fsnewshour.htm -- which, among other things, has a Peak Oil discussion each month or so.
Published: May 24, 2007 2:31 PM
Nick
Evidently, functionalist low-density zoning only makes sense in a system without cost-benefit calculation, aka socialism. Higher density zoning generates more income from the same costs, giving them more power. (See NYC.)
Local governments didn't figure anything out. They didn't even think about anything. They just went with the simplest choice they could make and didn't think of the consequences.
Privatize cities before they destroy us all.
Published: May 25, 2007 1:57 AM
I get a kick out of those that think local government conspires to do things. They aren't that smart. They set the zoning and if an appropriate use is proposed, it it allowed. Without tax breaks or any other give aways. (There are exceptions, but that is what they are, exceptions.)
Developers build what their customers want. Period. It's all about money. If developers couldn't make money building strip malls, they wouldn't. They would build something else. Then people would complain about that.
Published: May 25, 2007 6:06 AM
They lower search costs and otherwise meet a market need, *given* an artificial set of starting assumptions that Edmonds tacitly accepts. The argument assumes a preexisting economy in which bedroom monocultures are separated by long commutes from both the workplace and shopping, and in which shopping is clustered on freeway exits in layouts with which one is vaguely familiar at best. It assumes the atomization of organic community by government-subsidized mobility.
Absent all these conditions, the lowering of search costs might be solved by colocating a variety of businesses on a traditional Main Street within easy walking, bike or bus distance of one's home.
The downtown shopping district also arose in response to market conditions: the market conditions that prevailed before our sixty-year social engineering project in subsidizing the car culture and sprawl.
Published: May 25, 2007 10:03 PM
Al,
The point that we are all trying to make is that the developer wouldn't be able to make money on a strip mall project if it wasn't for the massive subsidies.
Published: May 26, 2007 2:16 PM
cool
Published: February 26, 2008 11:45 AM