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A Beachhead Against Placelessness

Josh Stephens on
Aug 11, 2014

It's no secret that Walmart stores have caused the entire economies of small towns to decamp for some highway strip and, ultimately, wind up in Bentonville. But at least you know a Walmart when you see it - from miles away, no less.

A similarly insidious trend toward generic placelessness has been taking place in smaller-scale communities, even in many of the places that progressive planners hail as attractive, functioning communities. The Los Angeles County city of Manhattan Beach is the latest such community to rouse from its chain-induced slumber. According to a recent article in the Daily Breeze, the city's downtown has been losing many of its stalwart independent stores to higher rents and the corporations that can pay them.

Advocates of the free market would call this creative destruction. But it's more than destruction: it's extinction. Once an endearing store or restaurant is gone, replaced with a bank or a Walgreens, it's gone. "We need to plan out (the area) so we don't one day end up with no local flavor," Manhattan Beach Mayor Amy Howorth told the Daily Breeze.

I've seen it in my own neighborhood in West Los Angeles. The age-old stationery store, which had downsized twice, went entirely kaput three years ago. It's been replaced by a Subway, and a Citibank ATM. (Not a Citibank branch; just an ATM, entombed in a stucco wall.) Our beloved bookstore is long gone. So is the pizza place.

Manhattan Beach is taking a potentially courageous step. A few weeks ago, the City Council imposed a temporary moratorium on ground-floor banks and offices through an urgency zoning ordinance. It has pledged to study ways to preserve Manhattan Beach's "small-town feel," according to Howorth. I hope that they conclude that the public good - and even the city's economic vitality - permits and requires them to do something.

I've always found talk of economic development to be curious. Back in the days of redevelopment agencies, agencies tried to get something built and leased so that properties would generate tax revenue. But often it seemed that no one cared about who or what was going into the properties. A McDonald's or a FedEx store was as good as anything else. Plenty of cities seem to have the same attitude: cut the ribbon on something - anything -and it's a success.

This attitude ignores one of the most basic yet least-discussed principles in economic geography: the multiplier effect. I shouldn't have to explain the multiplier effect. But, then again, I do. Most cities seem to be terrible at it. The multiplier effect means that when a clothing store, coffee shop, or burger joint is locally owned and caters to local customers, the customers' money remains in the community and then gets re-spent and re-invested. At least part of it does, anyway. It doesn't wind up in Bentonville, Seattle, or Oak Brook. And it doesn't pass into the hands of thousands of placeless, faceless, passive shareholders.

As for the benefits of economies of scale, I don't buy it. I'm a journalist. I've written many an article in "third spaces," such as coffee shops (even Starbucks). I've done so in dozens of cities, and, as often as possible, in independent coffee houses, usually in increments of $2.50. I know full well that it is possible to run a coffee house without operating a proprietary network of suppliers, distributors, and designers. Plenty of entrepreneurs make a good living at it.

The only difference between Common Grounds, which was doing booming business when I passed through Lexington, Kentucky, and Anastasia's Asylum, which got booted out of Santa Monica, is the rent that each has to pay. They'd otherwise be equally viable businesses, and more beneficial to their respective towns than Starbucks is. But Starbucks can afford to lose money in Manhattan Beach because it has thousands of profitable locations. A Manhattan Beach location might be a "loss leader" that exists just to strengthen the overall brand. 

That's why cities have every right to regulate, or at least promote, the ownership of their private amenities. Naturally, property owners are going to bristle at this idea. One landlord expressed a predictable, and sentiment, in the Daily Breeze: "Once you start restricting who you can rent to and rejecting certain tenants, you're messing with the free market and property rights." His concerns are understandable, but they miss the point.

Ever since the gavel fell on the Euclid decision, cities have been allowed to say what goes where. There's no such thing as a "free" real estate market.

The retail buildings in downtown Manhattan Beach exist there - in size and appearance - only because city law has said they can. They are leased by stores, and not cattle yards and pot shops, for the same reason. Certain tenants are already excluded and included. Landlords need to balance their own understandings of "highest and best use" with those of the city and its populace. That's the bargain they make when they decide to put their money into real estate and not, say, into Lotto tickets. It's the job of city government to decide what's best for the city as a whole. In many cases, local ownership may be best.

It's hard to feel super-sorry for Manhattan Beach, of course. It's paradise, with six-figure salaries all around (nine-figure salaries if you're among the professional athletes who live there). Struggling small towns and inner-city neighborhoods need the multiplier most dearly. But that's the point: if independent businesses can't survive there - in a place where people have the taste and the discretionary income to seek out something special - then where can they survive?