In the 2010s, economics discussions went mainstream. Blogs and (especially) social media meant that data-driven, high-level debates about economic issues were no longer confined to the op-ed pages of the Wall Street Journal and the talking heads on CNBC. This was a good thing, but I think it had some unintended consequences. One is that a lot of the narratives that made sense in 2012 or 2015 got embedded into the popular consciousness, and have stayed there even though the underlying reality has changed.

One big example of this is wage stagnation. In the early 2010s, lots of people “knew” that American middle-class wages had stagnated since the early 1970s, with only a brief temporary revival in the late 90s. And so naturally, a lot of discussions revolved around how to fix that. But even as we were having those arguments, wages accelerated again. Now, when we look back with the benefit of ten more years of hindsight, the years since the mid-1990s look like a bumpy but substantial increase:

Another big narrative, related to the wage stagnation idea, is that service costs are relentlessly rising in the U.S. economy. You’ve probably seen some version of Mark Perry’s famous “price changes” chart:

This chart tells a simple, powerful story: Services get more expensive, while physical goods get cheaper. Health care, education, and child care went up in price faster than wages, while cars, clothing, electronics, and toys got more affordable.

And the story was compelling because it came with a simple theory to explain it. This was the notion that manufacturing productivity naturally increases faster than service productivity. Conceptually, it seems easier to figure out how to rearrange production processes in a factory, and apply new machine tools, than to figure out new ways to educate kids or take care of Grandma.

And during the 20th century, this principle held true. For example, from 1987 to 2011, manufacturing productivity more than doubled, while overall productivity increased by only 70%:

In fact, if you look on Wikipedia’s page for “Baumol’s Effect”, also known as Baumol Cost Disease, it lists this productivity divergence as an explanation for diverging costs.

If service costs rise relentlessly while manufacturing costs fall, it portends a grim future — one where we have cheap gadgets, but where the big necessities of modern middle-class life are increasingly out of reach. And in fact, that was the story a lot of people were telling in the mid-2010s.

That story led to a certain techno-pessimism. If technology could give us cheap gadgets, but couldn’t make the basics of modern life any cheaper, what good was it? The failure of educational technologies like online education only seemed to drive the point home — it seemed like we’d always just be stuck with a teacher giving lectures on a board to 20 or 30 kids. Though some people dreamed of robot nurses and nannies, these seemed very far from materializing.

It also fed into cynicism about trade. If China gave us cheap gadgets but we were still struggling to pay for health care and education, wasn’t globalization sort of a booby prize? I think we see echoes of that sentiment in the GOP’s willingness to embrace Trump’s tariffs.

On the policy side, rising service costs led to two different big ideas.

First, if technology couldn’t make services cheaper, some people (including myself) reasoned, we should use policy to make them cheaper. Perhaps deregulation was the key — many libertarians blamed rising service costs on a policy of “cost disease socialism” that restricted supply while subsidizing demand, implying that we just had to eliminate the supply restrictions and cut the subsidies and the market would do its thing. Progressives advocated a more statist approach — after all, most other countries have some form of national health insurance, and they all have cheaper health costs than America does, so perhaps government bargaining power was the key to driving costs down. (Personally, I supported doing both approaches in parallel.)

The second big policy idea said that what we want isn’t necessarily for services to cost less to produce; what we want is for services to cost less to the people who consume them. Productivity improvements in the service sector would just throw human beings out of work, as they had done in manufacturing; instead, a future where everyone gets a high-paying job taking care of everyone else sounded pretty good to some progressives.

So how do we make services cheap to consume, but keep using “care jobs” as the future of good-paying middle-class work? Taxes and subsidies were how progressives planned to square that circle. If rich people could be taxed at much higher rates, that money could be used to create higher wages and more jobs for care workers and lower prices for consumers. For example, here’s what Heather Boushey, one of Biden’s most influential economic advisors, told the Aspen Institute in 2021:

“This year has taught us all, across the nation, how the care economy is the foundation of our economy,” Boushey remarked…Boushey reflects on the twin crises of a lack of good care and a lack of good jobs and notes that investing in the care economy creates a positive feedback loop that allows family caregivers to find quality care and care workers to find quality jobs.

Natalie Foster and Amanda Newman wrote that “policy [should] contribute to building a care economy that dignifies the work of caregivers and expands access to quality, affordable care”. Felicia Wong of the Roosevelt Institute endorsed the idea of universal child care as part of a new New Deal.

This idea represented a substantial portion of Biden’s economic plans. The Build Back Better bill — which never made it into law — would have created a national family and medical leave program and a universal pre-kindergarten education, while heavily subsidizing child care and various in-home services. The total price tag would have been in the hundreds of billions of dollars. This big push for service subsidies was mostly defeated in Congress, though some health care subsidies did make it into the (misnamed) Inflation Reduction Act.

In other words, the trend of increasing service costs defined many of our economic debates for a decade. There was just one small problem — by the time we started talking about how to address this trend, the trend had changed.

Health care costs have leveled off

I’ve been meaning to write this post for a while, but what prompted me to finally do it was when Matt Yglesias posted a very nice chart of health spending as a percentage of GDP. Here’s a version of that chart with two different measures of health spending:

Note that “personal consumption expenditures” includes spending on behalf of consumers by the government and by nonprofits, so this isn’t just household spending on health care — it’s all of it.

We also see the same pattern when we look only at hospital services — the item whose cost went up the most on the Mark Perry chart:

So what we see is that until around 1990, health spending rapidly ate up a bigger and bigger portion of our national income. Then the increase slowed down, but it did go up some more until around 2009. But after that, it leveled off; in 2024, Americans didn’t spend a greater percent of their income on health care than they did in 2009. And in fact, the increase since 1990 has been pretty modest — if you look only at the service portion of health care (the blue line), it’s gone up by about 1.5% of GDP over 34 years.

OK, so, this is total spending, not the price of health care. Is America spending less because we’re getting less care? No. In cost-adjusted terms, Americans have been getting more and more health care services over the years:

What’s happening is that although health care prices have still been going up, they’ve been going up more slowly than before. Here are health service prices relative to the overall price level, as measured with the PCE:

You can see that costs level off in 2009, and then actually drop after the pandemic relative to other costs. This doesn’t mean health care got cheaper after 2020; what it means is that health care prices rose more slowly than other prices did.

If you use the CPI (as Mark Perry’s chart does), things look a little different — medical costs keep rising faster than overall costs during the 2010s, but then slow down quite a bit after the pandemic:

Why the difference between CPI and PCE? Two main reasons. First of all, health care itself is a bigger component of PCE than of CPI, while CPI weights housing more heavily instead. So the fact that health care prices have gone up faster than housing prices means that CPI will show a greater increase of health prices relative to the total. Second, PCE tries harder to adjust for quality improvements. Health care has gone up a lot in quality over the years, and this has been hard to capture with traditional price measures. This is from the conclusion of a Brookings literature review from 2016:

Traditional measures of productivity growth in the health sector most likely understate it, because they don’t adjust prices for substitution from higher to lower cost inputs and because they don’t take account of changes in quality over time…The evidence to date suggests that adjusting health care expenditures for changes in quality leads to a significant reduction in the rise in health prices over time, and, indeed, these prices may even have declined relative to other prices.

PCE has this problem less than CPI does, so it shows more of a cost slowdown.

OK but anyway, what we really care about at the end of the day is affordability — i.e., how much health care an average America can buy. A good way of measuring affordability is to look at median income divided by an index of health care prices — in other words, how much health care the typical American can buy with their annual income.

When we look at this, we see that health care got steadily less affordable until around 1990, then leveled off, and now has been getting more affordable since around 2012:

So overall, health care is probably now more affordable for the average American than it was in 2000 — in fact, it’s now about as affordable as it was in the early 1980s. That doesn’t mean that every type of care is more affordable, of course. But the narrative that U.S. health costs just go up and up relentlessly hasn’t reflected reality for a while now.

Why have health care costs stopped going up rapidly? Some credit the cost control provisions of the Affordable Care Act of 2009 (aka Obamacare). This is from 2019:

March 23, the ninth anniversary of the ACA’s passage, presents a good opportunity to examine its legacy on cost control…Fast forward to December 2018, when [the Office of the Actuary of the Department of Health and Human Services] released the official tabulation of health care spending in 2017. The bottom line: cumulatively from 2010 to 2017 the ACA reduced health care spending a total of $2.3 trillion…[H]ealth care spending in 2017 was $2,000 less per person than it was projected to be. And for the 176 million Americans who have private employer-sponsored insurance, their lower premiums averaged just under $1,000 per person.

Another possibility is that Americans just got tired of paying more and more for health care, and started balking at higher prices. People who made excuses for high American health costs claimed that it was just an income effect — that as nations get richer, they simply spend a higher and higher percent of their income on health care. But as I pointed out, at some point this explanation has to fail, because it can’t be true that health care eventually consumes all of a rich nation’s income, to the exclusion of everything else.

It could just be that Americans were willing to pay more for health care as they got richer, up to a point, but that at some point they said “OK, that’s enough.”

Higher education costs have leveled off

It’s not just health care whose costs have leveled off. College tuition is no longer getting more and more expensive every year. In fact, in inflation adjusted terms, tuition has actually fallen since the pandemic:

Here’s another way of visualizing that same data, and you can see that adding in housing and food doesn’t really change the story:

Of course this doesn’t include financial aid (nor does Mark Perry’s chart, nor do official inflation numbers). Financial aid has been going up, especially at private schools. When you include that, it turns out that private four-year nonprofits are actually less expensive in inflation-adjusted terms than they were in the mid-2000s, even without accounting for rising incomes:

For public schools it’s about the same:

In other words, higher education has been getting more affordable for years, and the decrease in affordability in the late 2000s and 2010s was significantly overstated. The popular narrative that college is getting less and less affordable is wrong, and it needs to change.

Why are college costs going down now? It’s basically a story about demand. College enrollment peaked in 2010 and began to fall:

This enrollment decline happened for every age group of students. It wasn’t just because the number of young people in America plateaued, either; enrollment fell as a proportion of young people.

As for why enrollment rates declined, that’s an open question. My own hypothesis is that college costs rose and the college wage premium fell until a market equilibrium was reached.

Our debates about services need to change

It’s not just true that service costs have stopped exploding in America. The narrative that service productivity is stagnant, while manufacturing experiences fast productivity growth, has been flipped on its head since 2008. Manufacturing productivity abruptly flatlined around the time of the Great Recession, while overall productivity has risen:

This implies that service productivity growth has accelerated. And indeed, if you look at specific industries, you see a lot of services where productivity is going up quickly in America:

Now, these changing trends don’t mean that services are cheap and we can stop thinking about service costs. First of all, there are still some services that are getting less affordable over time — most notably, child care. Second, the recent mild increases in affordability for health care and higher education haven’t erased the big cost increases that happened in the 1980s, 1990s, and early 2000s; Americans still pay a lot more for these things than Europeans or Asians do, relative to their incomes. So there’s still probably scope to bring down the costs of health care and college.

But with all that said, the change in the trends in service costs and service productivity mean that our debates about these topics need to change.

First of all, services don’t look as resistant to technological improvement as we once thought. The increased adoption of IT in health care is probably having a big effect. We can probably apply that insight to child care and K-12 education as well. And the introduction of AI into education — and everything else — will probably accelerate the trend even more.

The possibility of technology-driven productivity improvements in service industries also means that we don’t have to resort to expensive subsidies in order to make services both better-paying for workers and cheaper for consumers. Instead, we can encourage technology adoption, and enjoy higher wages and lower prices, just like we did with manufacturing in the 20th century.

(As for where the jobs of the future will come from, it’s looking more likely that professional jobs, rather than care jobs, are the next big thing.)

Falling service costs should also make us more optimistic about capitalism, and about the future of the middle class. For the last decade and a half, a lot of our economic debates have been premised on the idea that the American economy is fundamentally broken, and that life just keeps getting more and more expensive for regular people. That’s looking a lot less true than it did in 2012.

We spent a long time talking about how service costs were eating the world, and I don’t expect that narrative to disappear overnight just because I posted one blog post with a lot of charts. But it’s well past time for our discussions on this topic to start shifting in response to new information.

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It’s a whopping 55 x 35 feet!!!! The group that hung it is called Trans Is Natural, among whom is the magnificent Pattie Gonia: drag queen, environmentalist, and National Park ranger.

Eight years ago, around the time I moved to San Francisco, I watched the Disney movie Big Hero 6. It’s set in a city called “San Fransokyo”, which is supposed to be a mashup of two of my favorite cities — basically a denser San Francisco with some Japanese-style roofs and electric signs:

Around that same time, I became acquainted with the YIMBYs, who onboarded me into the broader urbanist revival that was happening throughout the United States. I spent years thinking about what it would take to turn San Francisco into San Fransokyo. And I wasn’t the only one. Plenty of discussions of San Francisco’s urban future reference that same Disney vision.

Over the past two years, my thinking on what makes cities great has advanced a great deal. Although American urbanists usually think in terms of housing density — which is understandable, given the country’s failure to build enough housing — I’ve come to realize the importance of commercial density. Basically, great cities have a lot of shops everywhere.

I wrote about this in the context of Japanese cities about a year ago:

American zoning tells you what you are allowed to build in an area — single-family homes, office buildings, etc. — while Japanese zoning specifies what you’re not allowed to build. This means that almost every zone is mixed-use — since almost no zones outlaw every possible type of shop, almost every zone has some stores in it. In other words, in America, relatively few areas can have stores, because the zoning laws have to specifically tell you “It’s OK to build a store here”. In Japan, if the zoning code doesn’t expressly forbid stores, you can go ahead and build them…Because almost every area has stores and restaurants, even in the suburbs, you’re never far from a store or restaurant…

Of course, all of this requires something besides mixed-use zoning — it requires high commercial density…We tend to think of “density” as residential density — the number of people who live in a given area. But as the blog Urban kchoze argues, commercial density — the number of shops in an area — is very important for walkability…Japanese cities, in contrast, have a ton of little stores and restaurants…[This] creates a variety of stores in a neighborhood. If every convenience store and noodle shop has to be small, you have to have a lot of them in order to serve local demand. And this creates local variety, which is fun and enjoyable.

And in a follow-up post, I wrote about how Japan’s high commercial density comes from favoring small businesses:

[I]n Japan, when you go out to eat, there are a million restaurants to choose from, and they’re all near each other. When you go clothes shopping, there are a million little boutiques to try, and they’re all near each other…The romance of urban Japan is that there are always a bunch of completely new places to discover, and so it’s always worth walking around and discovering stuff…

And that couldn’t happen unless there were a huge number of people who wanted to start small businesses…Japan has a number of government policies in place to support small retail businesses over large ones. One of these is the Large Store Law, which discourages big stores in dense urban areas. But there are many others. There is a vast and diverse array of subsidies and supports targeted specifically at small retail businesses — startup cost assistance, renovation assistance, low-interest loans, tax incentives, training for small business entrepreneurs, community preservation laws, and so on…

Besides making urban environments pleasant and exciting, it seems to me that small business owners provide a crucial constituency for many of the essential ingredients of Japanese urbanism…

For example, take public safety…Small businesspeople…have an interest in policies that promote public safety, which is one of the key elements of Japan’s excellent cities…Another example is walkability…[I]t’s in the interests of small businesspeople to have great trains, walkable spaces, and residential density, in order to get them more customers…And small businesses create the ultimate constituency for capitalism itself…Small business turns a large mass of the middle class into capitalists, giving them a direct stake in the system of private business ownership.

I think Japan has executed on commercial density incredibly well. If San Francisco had a few blocks full of Japanese-style zakkyo buildings, I think it could be pretty iconic. But in fact, I think every big city could benefit from encouraging small retail business, even if it doesn’t look quite like the Japanese model.

Housing without shops is sterile, whether it’s dense or not

Every YIMBY who advocates for greater housing density encounters people who attack new housing on aesthetic grounds. American zoning laws and building codes have incentivized developers to build a certain kind of short, bulky apartment building called a “5-over-1”.1 These have become the standard type of new apartment across all of the United States, and they’re instantly recognizable:

A lot of people don’t like this style of building, and some use this aesthetic distaste to argue against new housing construction. But I doubt that replacing it with something more ornate — in the style of, say, Brooklyn brownstones, or Paris’ Haussmannian apartments, would do much to quiet these objections. Instead, I think most of what the naysayers are really objecting to isn’t the color or the facade material or the lack of ornamentation — it’s the urban design around these new buildings.

America doesn’t have a lot of public transit, so the people who live in 5-over-1 buildings tend to drive most places. The buildings are thus built with car accessibility in mind — surrounded by large roads and parking lots. The roads and parking lots are ugly, and they make the buildings themselves look isolated and bare, which also makes them seem less aesthetic.

You can put shops on the ground floors of the 5-over-1 buildings, and in fact many do that. But as Alfred Twu writes, both the design and the typical location of the buildings limit how many shops they can sustain:

[T]he ground-floor retail spaces of 5-over-1s can be hard to lease since they’re often oddly shaped to fit around parking, stairs, and other service spaces. And five floors of apartments don’t house enough people to support a whole floor of retail: a two-person household living in a 600-square foot apartment only creates demand for ten square feet of urban retail. Another issue is that many large-scale 5-over-1 developments are located in former industrial areas with little or no preexisting retail traffic or destination retail.

Looking at a 5-over-1 complex thus conveys a sense of isolation — it tends to look like a place where you’d mostly be hunkering in your room or leaving to drive to a far-off destination. And if you’re going to live that lifestyle, why not just live in a single-family home, where at least you have more space and more greenery?

On the flip side of this coin, many YIMBYs love to post pictures of the suburbs, with their endless rows of single-family homes, and to comment on how sterile they look. They’re not wrong, but I suspect that any form of housing that only has houses and not shops will look pretty sterile. For example, here are some typical apartment blocks in Korea:

And here’s a xiaoqu superblock in China:

Many of these xiaoqu districts have a little bit of retail in them — some grocery stores or other sources of basic necessities, a few restaurants, etc. But the commercial density is still very low; these are spaces built to house people, not shops. If you want to get to anywhere with some real variety and novelty, you’re going to have to leave and drive (or make your way to a train or bus station and take transit) to a mall.

The beauty of Brooklyn’s brownstones, or Paris’ Haussmann apartments, comes in large part from the fact that they’re located near to shops. When you see those narrow streets in front of the Brooklyn apartments, you know they’re built for walking. And that implies that a short walk away, there will be some place like this with some shops:

Paris’ Haussmann apartments are usually either very close to shops, or built right above them:

When we lament the isolation of the suburbs, we’re not really lamenting low residential density; we’re lamenting the isolation of houses from third spaces where people might meet and mingle. Those third spaces are shops.

Recently, in response to someone complaining that new American apartments all look the same, I tweeted that instead of posting pictures of urban environments they don’t like, people should post more photos of cities they do like. Many people took me up on that challenge. Some people posted aerial photos and others jokingly posted screencaps from video games and movies. But the ones who posted street-level photos often chose streets with lots of shops.

You need shops to make a city great.

Limit physical size, not corporate size

One good thing about the idea of filling cities with small businesses is that it has the potential to appeal to a bunch of different political factions. Conservatives may appreciate that small business turns lots of people into capitalists, giving them a stake in the capitalist system in general. Moderate urbanists will appreciate that small business requires things like public safety and good public transit. And progressives, with their focus on fighting the power of big corporations, will like that small businesses are small:

Small businesses are not economically efficient, but they create some positive externalities for cities. The higher a density of small retail businesses you have in an urban area, the more novelty local consumers can enjoy, and the more serendipity people can get from just walking around.

You don’t always get this benefit with big chains. Walking around in a fashion district that just has Zara and Vuitton and Gucci and other international chains is kind of boring — you could go anywhere and get that stuff, and there won’t be much that’s new or unexpected. But walking around in a neighborhood like Harajuku or St. Mark’s Place, with their proliferation of small independent boutiques, is a thrilling adventure. The same is true of restaurants; a street lined with chains isn’t going to be as interesting as one lined with places you’ve never tried, even if the chains are top quality.

So good urbanism sacrifices some efficiency in exchange for variety. There are various ways to achieve that outcome — you can severely limit chain stores, as San Francisco does. But a better approach is probably to limit the physical footprint of stores instead.

Chain retail is all about efficiency, which discourages chains from occupying small spaces — it’s usually not going to make economic sense to make a tiny Zara or a hole-in-the-wall T.G.I. Friday’s. But an indie bakery or a specialized bar or an unusual boutique can easily set up shop in a small space.

And when chain businesses do set up shop in a small space, it often fails to detract from the overall variety and serendipity of a retail district. In Japan, for instance, city centers have huge amounts of 7-Elevens, Lawsons, and Family Marts, but this doesn’t make Tokyo any less vibrant than New York City, where the bodegas are mostly independent.

Shrinking the size of shops also has direct benefits — it allows you to fit more shops in a given area, which increases novelty, variety, and serendipity.

Thus, one helpful policy for creating a city full of shops is to use zoning laws, building codes, and regulations to encourage small retail footprints in walkable neighborhoods. Japan had a law against large stores for many years, which is one reason its cities have so many small shops today.

How to get a city full of shops

There are lots of other legal and regulatory measures that can help fill an urban area with shops. One crucial step is simply to remove red tape, so that it’s easy for people to start small retail businesses. San Francisco notoriously has huge amounts of red tape. Here’s one testimonial from last year:

Five years ago, I decided to pursue my dream and launch Arcana, a wine bar, restaurant and entertainment venue on the Mission Street corridor. Little did I know what it would take to open those doors: years of hard work, heartache, blind alleys and bad-faith conversations…As I started my application process with the city, I was told that I should engage with neighborhood “stakeholders” for their approval…

[T]he Mayor’s Office of Economic and Workforce Development…sent me on a year-long journey talking to pressure groups abusing the conditional use authorization process. Contrary to official rules, these groups demanded that Arcana close at 10 p.m., imposing guidelines on the venue’s design, the artists we could hire and even the food we could serve, telling us we were not allowed to be a vegan restaurant…

The neighborhoods that need investments and resources the most are still tied up in red tape…[C]onverting an office space to an entertainment venue still takes months…Business operators must also pass inspections by the San Francisco Fire Department, Department of Public Health and Department of Building Inspection for plumbing, electrical and building compliance. Waiting for a license from the Department of Alcoholic Beverage Control, which includes an FBI background check, adds two to six months. This administrative and financial burden can quickly turn into a dead end and sap even determined entrepreneurs’ energy, determination and bank accounts.

Similar stories abound.

SF’s new mayor, Daniel Lurie, is making a concerted attempt to change things. He recently rolled out a package of regulatory reforms and legislation aimed at making it much easier to start a small retail business:

Small businesses and homeowners in San Francisco: permitting is about to get easier. Today, we announced reforms and legislation that will make permitting faster, simpler, and more transparent. These ordinances will cut red tape, save time and money, and finally make our permitting system work for the people it’s supposed to serve. Here are some examples of what this means in practice:

No more permits for sidewalk tables and chairs—putting $2,500 back in the pockets of small businesses and saving them valuable time…No more permits and fees to put your business name in your store window or paint it on your storefront…No more trips to the Permit Center to have candles on your restaurant’s table…No more rigid rules about what your security gate must look like so businesses have more options to secure their storefronts…No more long waits or costly reviews for straightforward improvements to your home, like replacing a back deck…And we’re getting rid of outdated rules to give downtown businesses more flexibility with how to use their ground-floor spaces—because if adding childcare centers and gyms will help bring companies and employees back downtown, we should support it.

In addition, every city department involved in permitting will track timelines and publish them online. We’re building one system—simple, accessible, and focused on the customer…And we’re not done…In the coming months, we’ll roll out a consolidated permit application and bring more of the process fully online.

When we make it easier to open a business, improve a home, or invest in our city—we don’t just support individual success. We fuel our city’s economic recovery…We attract more customers, more residents, more small business owners—and with them, the revenue and energy that San Francisco needs to thrive…Learn more about the initiative at https://sf.gov/permitsf

To what degree this actually clears out red tape remains to be seen, but it sounds like a great start, and I like the focus.

You also need to change a city’s zoning regulations to encourage lots of retail. Urbanists always talk about “mixed-use” development, but that can mean many things. It could mean a single big-box store or shopping mall located in the middle of a residential neighborhood, or a couple of small cafes in an otherwise residential area. In order to create high commercial density, zoning should allow retail anywhere on the ground floor of a central urban neighborhood. Cities should also think about alternative retail locations, like underground shopping areas, shopping arcades, or zakkyo buildings (multi-level retail with visible signs and street access to upper floors). In more residential neighborhoods, smaller numbers of grocery stores, restaurants, and cafes should still be allowed.

Shops require foot traffic, so cities need to promote walkability in shopping areas. This means removing surface parking lots and putting in parking garages instead. It means putting in sidewalks and protecting them from car traffic with physical barriers like trees, lampposts, fences, and bollards. And of course it means building public transit, so not everyone has to drive their car to a shopping area.

Finally, a city has to provide both public safety and public order in walkable areas. If looting of stores is tolerated, as it was in much of California in the years after the pandemic, small businesses are not going to take the risk of setting up shop in the area. If customers have to step over fentanyl users to get to their restaurant, they’re going to stay home and use DoorDash or drive to the mall instead.

Creating vibrant, walkable shopping districts is not trivial. But it’s crucial for creating the kind of city where people really want to live. If you expect citizens to give up the comfort of huge suburban houses and leafy green lawns and move to the city center, they have to be compensated in some way. Having a huge variety of stores and restaurants and bars and cafes within easy walking distance is that compensation.

More American urbanists need to be talking and thinking about how to fill our cities with shops.

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