Love them or hate them, strip malls are a development that you can expect to encounter in most American cities and towns. But a recent Forbes article took aim at them, explaining:

The common wisdom is that they result from “the market,” as monuments to American capitalism and consumerism. But that is a big fat myth—they have been forced into existence by government regulations.

The common wisdom is that they result from “the market,” as monuments to American capitalism and consumerism. But that is a big fat myth—they have been forced into existence by government regulations.

As with suburban-style housing, roads and so much of our current development pattern, strip malls are indeed, not primarily the result of the free market in action, but rather, government rules and subsidies.

The Forbes article goes on to highlight several government regulations that have resulted in the creation of strip malls including: single-use zoning, minimum parking requirements (learn more about our work to end those), and setback requirements. Of the latter, the article explains:

Setback requirements have been enforced to separate, in the name of safety, buildings from their adjacent roadways. This means that buildings are fronted with large parking lots, rather than integrating with sidewalks and pedestrians.

All of this is the result of an auto-oriented mindset, and it's also self-reinforcing: The parking lots and setback requirements are in place to accommodate car storage and safety from car accidents. And building our cities around parking lots and large setbacks makes them even more inhospitable toward anyone not in a vehicle. 

A shuttered strip mall.  (Photo by Johnny Sanhpillippo)

A shuttered strip mall. (Photo by Johnny Sanhpillippo)

Density limits are another factor contributing to the proliferation of strip malls. As the Forbes article continues:

When developers can mix uses and increase densities, they increase their projects’ value, according to a study by the Commercial Real Estate Development Association. [...] Single-use strip mall retail development works the opposite way. Because government regulations are limiting the value that developers can accrue from their land, they throw up something hasty and cheap to get a quick return.

As we know from our studies of big box stores, those "hasty and cheap" buildings usually deteriorate within a couple decades, making them less desirable—or potentially uninhabitable—retail locations. When developers don't have the option to build mixed-use developments, they lose out on opportunities to make a higher profit and local governments lose out on the chance to collect more tax revenue from that building (not to mention the lost opportunities for housing or other uses of that additional space)  Our housing campaign earlier this year also explored the federal government's role in encouraging single-use housing over mixed-use development, to the detriment of the tax roles and opportunities for small scale developers.

While the Forbes article is primarily making its argument against strip malls based on "ugliness," we at Strong Towns, make our argument based on math. We know that strip malls and other low-density chain retail stores perform far worse on the tax rolls than traditional downtown buildings. We also know that those buildings aren't built to last, so they break down within a few decades, along with the new public infrastructure (pipes, roads, extra turn lanes and traffic lights) built to sustain them. Who's going to pay for all that? Many strip malls, like the one pictured above, find that no one is willing, so they're empty with 15 or 20 years of being built.

Overall, as the Forbes article concludes, even if we were to find a good argument for the creation of strip malls, even if they were profitable and valuable in some communities:

...the debate is academic; we don’t know where or how most businesses would function in an open market, because cities have stifled the market with regulations favoring suburban-style development.

Until we change the government regulations that induce strip mall development (or until every strip mall fails completely), we're stuck with these low-returning investments in our towns and cities.

(Top photo by UpstateNYer)

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