Post-pandemic trade and the role of municipalities – reflections COVID-19

The COVID-19 pandemic required exceptional measures to reduce its spread. Non-essential businesses had to close their doors, representing over 80% of all businesses. Restaurants, hair salons, retail outlets, etc.; located on commercial streets and in village cores, these establishments are often SMEs owned by local entrepreneurs. According to several specialists, between 30% and 50% of these businesses are currently at risk of bankruptcy.

Before the crisis, the retail sector was already in a precarious situation. Online shopping and the steady increase in retail space were major challenges for brick-and-mortar establishments on commercial streets. So this forced closure comes at a very bad time. Paradoxically, many of them were forced to innovate because of the pandemic, and to launch online sales to compensate for the absence of in-store sales. Despite calls to buy local in recent weeks, long queues can be seen in front of big-box stores such as Wal-Mart and Costco. Unfortunately, it seems uncertain whether this promotion of local purchasing and local businesses will continue in the medium and long term.

Shopping centers are also affected. These are going through difficult times that could drag on for a long time, given the potential bankruptcy of major banners. The difficulty of finding new tenants in the coming months could prove critical in some cases. The owners of these shopping centers will no doubt be looking to accelerate their diversification by focusing on experience-based retailing: restaurants, recreation, wellness, etc. Others may be looking to diversify into other sectors. Others may seek to integrate office space.

Municipalities have an important role to play in supporting shopkeepers and ensuring that local businesses and services remain available to the population. Although economic development is only a complementary responsibility to their primary missions, commercial establishments represent a substantial part of their property tax base. In this respect, commercial streets are generally more fiscally productive than big-box retail clusters. What’s more, retailers on these streets contribute more to the local economy. Municipalities have a lot to gain from supporting them!

As urban planners and development professionals, many of our actions can contribute to the survival and revitalization of commercial streets. From a regulatory standpoint, although it may take years for the full effect to be felt, zoning-based land-use management makes it possible to implement the following actions, among others:

• Reduce the approval procedure and fees associated with obtaining a terrace permit to the minimum necessary;
• Limit the opening of new commercial sectors, which only increase supply in a fragile market;
• Authorize office use on commercial streets to encourage a mix of customers;
• Diversify the types of businesses authorized on commercial streets to promote their resilience, even if it means restricting certain uses that are becoming too prevalent;
• Limiting the size of grocery stores in order to reduce the size of the catchment area required of them, and thus favoring local neighborhood grocery stores rather than big-box stores on the outskirts of urban areas;
• Regulate the location of businesses selling and consuming alcohol to ensure that these traffic generators remain on commercial streets and contribute to their vitality and revitalization.

Actions related to urban design should also be considered and implemented, starting this summer and on a long-term basis:

• Offer more space for outdoor terraces, even if it means pedestrianizing certain streets, since summer is often the time of year when bars and restaurants make enough profit to compensate for slower periods;
• Improve the street atmosphere, notably by creating wide sidewalks, planting street trees to form a canopy, reducing vehicle speeds, and adding street furniture to extend the length of stay of passers-by and provide a place to take a break, especially for the elderly;
• Ensure easy access to commercial streets for people living nearby, by making intersections safe for pedestrians, adding mid-block crosswalks when a block is more than 300 meters long, providing a quality bicycle network and sufficient bike racks, etc.

Municipalities must also be proactive in anticipating and planning the redevelopment of shopping centers. The current crisis is likely to accelerate their transformation. These are projects for rebuilding the city on the city, on large sites, and in some cases, in relatively central locations. In these cases, there are exceptional opportunities to create compact, mixed-use living environments, where housing, offices, shops and leisure facilities can be integrated into a human-scale environment, complementing adjacent neighborhoods.

Finally, from a fiscal point of view, municipalities should favor businesses located on commercial streets. They have the power to create sub-categories of taxation aimed at reducing the tax burden on the small-scale businesses that are generally located there, rather than continuing to favor the big-box stores, often located on the outskirts.

With an appropriate legal framework, other actions could support small retailers, such as limiting increases in commercial rents through price controls or a tax on vacant commercial premises.

Merchants and entrepreneurs are important stakeholders in the community. They employ our neighbors and reinvest in the local economy. Let’s wish them a bright future and support them, not only by buying locally, but also by creating the right conditions for their revival and success!

Cover image: Rue Saint-Jean – Source: Bourdon du Faubourg