A Receding Tide

26 thoughts on “A Receding Tide”

  1. When does your friend who owns the construction company expect to start business up again? You wrote a while back that he wound down all of his work and put his business on hold since he (correctly, we can say now) saw a recession coming.

    1. I’ll have to ask him the next time I see him. My guess is that he’ll take on work selectively as conditions shift. It’s all about risk management moving forward.

  2. Things have a tendency of correcting themselves. It seems evident to me that we’ve had a vast nationwide overshoot in the amount of residential & commercial square footage. We’ve begun to see some of that “fix” itself over the last 12 years. Retail square footage per capita is down slightly. We’re not building it as fast as we’re growing… but that’s the tip of the ice berg. The real change is the square footage built now 10, 20, 30+ years ago that’s just peeling apart, much of which will be going to seed.

    Household size is actually projected to grow for the first time in 100 years, while homes aren’t being built quite fast enough to keep up with population growth, so we’re probably going to see less residential square footage per capita too. It seems clear to me that much of our single family housing will be turned into roommate situations, chopped into boarding houses, and/or households will adapt to what’s available by having combining into larger households different from the 1960s post card nuclear families.

    1. Funny thing, our household acquired another member during this crisis who was seeking psychological support rather than material. It’s been a benefit to everyone. David Holmgren’s book, “Retrotopia”, talks about how one of the most important things in rehabilitating suburbia is to add more people per household.

  3. I’m recalling an old Warner Bros Bugs Bunny cartoon. Bugs went on a drive and got lost on a, then new, freeway interchange. He drove around and around always coming back to the same place. Eventually he opened a hot dog stand so he would not starve.
    Later Elmer Fudd got lost on the same interchange. Elmer kept stopping at the hot dog stand to ask Bugs “How can I get off this thing?”. At the end Elmer opened a condiment stand next to the hot dog stand.
    It was never explained how they got the hot dogs and condiments to sell.
    Similar to today’s reality, there is a way out, but most are not able to ‘see’ it.
    After all, we don’t want to go back to living in caves and shivering in the dark.

  4. First you’d have to allow the manufacturer to actually build a factory.
    ==================================
    There’s a picture advocating for a factory in the last post. An ad from a Detroit company called Shinola that sells $1000 watches and other luxury goods. I had to LOL when I saw it.

    1. The last time I was in Detroit I went to the flagship Shinola shop. I understand the marketing dynamic. They’re combining aga urban vibe with a luxury brand motif. Versace from the banlieue. A North American manufacturer can’t compete on price against the Asian competition. And it can’t compete against European glamour. So Detroit is a post industrial upscale niche. The glamping Gucci.

  5. Your comments can be applied to any town or neighborhood that relies heavily on tourists such as Carmel, Sonoma, Healdsburg or even North Beach in SF. If the tourists stop coming, as happens in every recession, the businesses that are dependent upon them suffer. Of course, even in a recession tourists come, just fewer, but if they are not allowed to come then those businesses may well not survive.

    Nevertheless, most of these towns are a bit more than the historical and cute tourist areas. The Marin Gateway Shopping Center in Sausalito has all the big stores selling everyday stuff you’d expect in a shopping center and it probably generates a significant volume of tax receipts to the city. Likewise residents of Carmel, Sonoma and Healdsburg have ready access to hardware stores and Safeways close to, but not right in, the touristy parts of town.

    Taking advantage of a fortunate geographic location or an abundance of old and historical buildings that can be restored to their earlier splendor has proven to be not a bad strategy time and again. Even Lodi, off the beaten tourist track and forever memorilized in a somewhat disparaging way by John Fogarty, has capitalized on a pleasant little downtown that can be a bustling place some days (though you have to drive through the usual gauntlet of used car dealerships and fast food joints to reach it).

    I do agree that we may be looking at a more severe recession than many people are prepared to believe, but I do remember all the vacant “see through” buildings in Silicon Valley following the dot.com bust in the early 2000s and collapse of construction and all the related businesses following the 2008 financial crises. In fact, even the early ’90s and early ’80s were pretty rough around here. Eventually, there was a recovery, and those weren’t fun years but they do happen. The old advice about being prepared for rainy holds. But I’m not convinced that a town with a historic and attractive downtown should downplay that attractiveness.

  6. “Negative growth” is modernity’s way of continuing the March of Progress (no one ever really defines where, exactly, “progress” is taking us). It’s a lie that cannot be refuted, because right now we are ONLY suffering through “a period of negative growth”. The blind lead the blind. It’s dark at both ends.

    Change (as opposed to “progress”) happens. It’s good to see how strong local economies remain, even if they are not perfect.

  7. I live in a small, Upstate NY Village and have been surprised at how well we’ve fared. The municipality has allowed outside dining on the sidewalks (it was a bone of contention for years then suddenly – poof – it’s okay now). They put out picnic tables in the parks so people had some place to eat takeout in the Village but they’ve become the meeting spot for the guys to drink coffee before heading out to work in the morning and lots of kids use them too. People are staying put and spending their money locally. The hardware store in town has the problem of not being able to keep enough stock. I suspect that our sales taxes will be down a bit from the shutdown but will rise slightly over the next few months.

  8. One sees the same dynamic in NYC. Look around my neighborhood in Brooklyn and it doesn’t seem like too much has changed. You have some vacant storefronts, the result of high rent blight, but enough older establishments owned their buildings to have kept things as they are.

    If anything local sales have increased, as locals are not getting on the subway and going to work in Manhattan, and buying things on their lunch hour.

    Manhattan, however, is hollowed out. It isn’t just the tourists who are gone. It is the workers, and the wealthy locals, to their summer places or anyplace they could find to rent.

    1. A shoestring relative is a mid-level executive for a Big Bank in Manhattan and lived (past tense) on the (way) Upper East Side, almost to Harlem. They moved out during the quarantine, and will likely settle in “commutable” PA or Jersey. Since they had two kids in a two bedroom apartment, I think they were itching to get out anyway.

  9. Although I see you are exploring these images in financial terminology(?) As a complete outsider; in a place not ravished with Covid-19; the financial side seems the least important right now (though if you have no money..) I wonder if ‘Receding Tide’, ‘Contraction’ ‘Negative growth’ are strong enough. After reading your article and looking through your pictures (I did get confused between the identities of local Chinese community and ‘Chinatown’, though it did click second run through. I Look at whats happening across the US and at your local story; I thought that what I see is more Reverse Velocity. A hard reverse. After a few reads of your articles I’m kind of curious too about your use of photography to illustrate a business/political agenda. It’s very different to the approaches I’m used to see to a photo-essay (is this a photo-essay?) and writing. It’s good to be challenged! Thanks.

    1. People tend not to read much anymore so photos help tell a story in an easily digestible manner.

      Everyone has an agenda. People on the Right run things through their filter and reverse engineer their conclusions. Same same on the Left. I just like to look at reality and document what’s actually going on around me. If that seems unusual… it is.

      1. For what it’s worth, unless you directly refer to the pictures in the text (like in this post), I scroll past your photos mostly ignoring them to get to the prose. I realize I may be an outlier.

        1. I can rarely get the photos to load (advance guard of the end-of-fast internet?), so I rely on the text. Problem is as each photo finally shows up, the text jumps down and down and down again. Eventually I look at the photos.

  10. Great compare and contrast photos. Yeah, you’re right, major pillars of the California economy – tourism, conventions, prestige office space, etc – are falling like dominoes and this is just the beginning. And yeah, city governments are in deep denial. Just “shelter in place” until this Covid thing blows over. Then we’ll get back to raising the hotel tax, right?

    Part of me relishes the destruction. The housing bubble will pop! CalPERs can walk the plank! Chinese tourists can stay home! Finally I can (insert financially irresponsible artistic dream goal here), whilst living in an abandoned Malibu mansion that I bought for 10k in gold bullion because I saw this all coming!

    A more sober me realizes this could be a Greece/Detroit moment for the state. Taxes will remain high whilst city services degrade and crime explodes. I’ll struggle to pay the bills (SSI will get “reformed” away in the late 2020s). I’ll be forced to spend my golden years clipping hedges for a corrupt oligarch, my only joy the mangoes growing in my Northern California backyard (because climate change).

    Probably somewhere in-between, but the future is far from certain. Results may vary. Times they are a changing…

  11. Fabulous juxtaposition between those three neighborhoods. Happily I live in a neighborhood closer to Clement which is why we picked it 4 years ago.

    My brother lives in Juneau Alaska which is Sausalito on steroids. At least the downtown core is. It has evolved to service the 1 million or so cruise ship passengers that pass through Juneau every year between May and September. So nothing but jewelry and curio shops owned by out-of-town corporations of no interest to locals.

    This summer with every cruise ship on the planet grounded, the natives are finally taking back a bit of their downtown. Not the businesses which are, of course, shuttered. But the spaces.

    It will be interesting to see how a lot of these places come out the other end of this. It could be a long time until cruise ship travel gets back to normal so a place like Juneau is going to have a lot longer wait compared to a place like Sausalito.

  12. You have inspired me to participate in a focus group strategic planning session for my city, which is, for the most part, a retail and residential shell around a large university. The students were sent home months ago. We held our focus-group session via Zoom. When asked about “our vision for the community”, everyone else said things like “better restaurants!”, “affordable housing”, “not high-density (tall) apartment buildings”, “better behavior by students off-campus”, etc. In other words, the same things they were saying five and ten years ago. I said “you want my vision of the city as it will be, rather than the city that we wish for? Plan for a much smaller university population. Plan for development that allows students, faculty, and staff to walk or bike to their classes or offices, because student debt is unsustainable, and oil production is unsustainable.” “Uh, huh. Moving on to our next question…”

    1. Ultimately external reality will do all the heavy lifting. College towns will have no choice but to adapt. Some will reinvent themselves. Others will simply fail.

      1. First you’d have to allow the manufacturer to actually build a factory.

        The “decline” of American manufacturing is actually a bit misunderstood. US manufacturing output is higher than it has ever been, or at least it was before the pandemic. A lot of it has shifted away from areas that used to have a strong manufacturing presence, with the upper midwest being obvious examples but also places like San Jose and LA. Additionally, automation has greatly reduced the number of people required in a factory. So, indeed, we can start making stuff again, but put in a couple of robots and you don’t need all that many people to do it. Just as you no longer need a man, a mule, a plough and a month to prepare 40 acres for planting.

        1. I long ago learned an important lesson as a (failing) small business owner: even if your leveraged business plan can survive flat sales, it can’t survive sales down 10% (or costs increased significantly) for an extended period. Much less this.

          Leverage works at least twice as fast in reverse. And, indeed, cash is king.

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