The economy is changing. Some of us think it’s for the better, some are sure it’s for the worse. That’s fairly typical; economies change constantly. The important thing is to understand how and why it’s changing.
The other night, John Oliver pointed out that our president is focusing on trying to bring back 50,000 coal mining jobs. This effort comes at a time when major retailers are laying off people and closing stores around the country. JCPenney, which employs more than 100,000 people, is shedding more than 100 stores and cutting back employment at those that remain citing “an expense challenge.” Each of the job reductions affects the local economy directly and the local real estate markets, just as the loss of those coal jobs affect the local economies around the mines.
We’ve already been through several industry losses in this country. Small family farms are about as common as Nonagenarians and about as healthy. Small family shops went the same way, being replaced by bigger stores like JCPenny and Walmart. Now it appears that the big stores may be going the way of the small mom-and-pop stores.
What Happens When the Big Stores Go Away?
The jobs they provide all go away, too. One quick test of a town’s local economy is the condition of its downtown business district. If you see a lot of activity in stores, offices, and other businesses, it’s probably fairly healthy. It’s at least holding on, if not growing. On the other hand, troubled economies are painted with boarded up storefronts.
Now I’m not saying we need to start a campaign to save all the jobs at JCPenney or any other employer. What I am saying is that we need to be aware of the impact of closing stores on the local real estate markets.
Family farms didn’t go away because of a lack of family farmers. Coal jobs didn’t go away because of a shortage of coal. JCPenney stores aren’t closing because Penney got bored with the retail market. All of these things happened through evolution. They were replaced by something stronger and more efficient. That’s not a value judgment; it just is.
What Can We Do About It?
I see any change in the economy as an opportunity. Suna recently posted about a mixed use development in Bryan. The development is a phoenix arising from the ashes of (or rather on land cleared just before) the crash of 2008.
With the closing of larger stores, I’m seeing specialty shops and boutiques open. All across America, I’ve seen abandoned storefronts converted to rental housing. As housing, store fronts are not pretty, but they provide low-cost housing—some of it of higher quality than the surrounding standalone homes.
We need to look forward to see opportunities where others look backward and see only lost jobs, despair, and failure. Remember when I posted about the Sonic in our small town closing? I asked for ideas on how to use the building (which was really just awaiting the new owners to reopen). Most of the respondents (almost all of whom answered on Facebook) suggested some other food service business. That makes sense, because it would be a relatively cheap remodel. But if we don’t look beyond what is and see what can be, we miss the opportunity to find the highest and best use of a piece of real estate.
But no matter what we envision, we can’t sell that vision if nobody can afford to buy it. And who will rent or buy our properties when the local jobs all go away?
Call to Action
So here’s my call to action for this post:
When you need to buy something—anything really—try to buy it from a local shop, not a big box store and especially not from Amazon or some far-away online service.
Sure it will be a little more expensive, but when you buy locally, the profits stay in your local economy. When you buy from a faceless conglomerate, you make someone else very far away a little richer and your local economy a little poorer. It’s a hard thing to do. It’s much easier to jump on Amazon and order whatever you need. I am trying to break that habit myself. It’s much harder and more time consuming to go down to the local office supply store (if you can still find one) and what you need. But the reward is you’re helping your local economy. In the long run, you may someday rent a house to someone who has a job only because you shopped locally.
We need to keep our eyes wide open to changes in the national economy AND we need to do what we can to support our own local economies. We need to understand when jobs go away because of evolution in the industry and economy—like the coal jobs lost to mechanization and competition from other industries. And we need to understand when our actions can keep local jobs in the local economy—like when we choose to buy locally-sourced foods or to buy from locally-owned businesses.
Remember, real estate always responds more to the local than the national economy.
Sue Ann says: Another way to help the local economy is to publicize businesses there. So, here are the links to the businesses Lee refers to above. Visit them in person, go to their website, or like them on Facebook: