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Here’s How Local Gov Can Revive Retail Real Estate and Reimagine Jobs

The retail landscape has changed dramatically in the wake of the Covid-19 pandemic, whether in the way the industry approaches the supply chain, distribution, real estate or employment. But what’s not often talked about is the impact these changes have had on the cities these retailers operated in, and what that means on a local level.

Local government leaders and organizations alike now must take matters into their own hands to ensure the commerce ecosystem can bounce back in their own municipalities. One advocacy organization is hoping it launched the blueprint for retail’s recovery in its recent “Future of Cities: Reinvisioning Retail” report.

The National League of Cities’ (NLC) new report included eight key recommendations for city leaders to facilitate an inclusive pandemic recovery across retail, and is part of the organization’s three-year initiative to drive the next chapter for metropolises nationwide.

Top 3 ideas: flexible land use, mix of physical-digital and community focus

Among the recommendations provided, NLC calls on city leaders to: focus on flexible land use codes to enable quick changes that meet evolving needs; anticipate a blend of brick-and-mortar and online retail to meet communities’ differing needs regarding the type and amount of physical space required to run both physical and virtual businesses; and create community hubs to provide residents what they need to live, work and play outside of the business center of their cities.

In a recent webinar, Lena Geraghty, the program director of urban innovation at the NLC, pointed out that zoning regulations must be designed with flexibility in mind, and that changes must happen administratively in the event of a pandemic.

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“Decrease the regulatory hurdles for desired community beneficial development. Starting a business is difficult and expensive enough,” Geraghty said. “Cities can do their part in ensuring that business licensing and permitting are not standing in the way of good retail activity throughout their cities.”

She noted that even prior to the pandemic, indoor shopping malls and single purpose office parks were on the downfall, while transit-oriented development was on the rise.

“We are being forced to think more creatively, not only about our space but about where we are locating our retailers, and what sites we’re going to put them at,” Laurie-Anne Sayles, council member of Gaithersburg, Md., told webinar attendees. “People still want to access retail that’s convenient. Ensuring that we are attracting retailers to high-traffic areas in neighborhoods and repurposing these spaces is going to be key as we think about how much more accessible we are when we’re competing with retailers like Amazon, and how can we better meet the demands of our consumers.”

Erin Simmons, senior director, design assistance at the American Institute of Architects’ Communities by Design, said that when working with city leaders on projects, the chief goal is simple: get bodies to these retail and restaurant spaces.

“My biggest point of advice would be just do whatever you can to give people what they want at this point, because everyone’s just desperate for it. We’re all starved to these experiences. What can we do to create events in these public spaces that we have, whether they’re permanent public spaces or new ones that have developed just out of the pandemic. What can we do to get people there so that they can then support all the businesses that are so desperate for our support as we move out of this pandemic?”

Keep new tech, workforce and wage shifts top of mind

In the report, NLC emphasized that the internet and understanding newer technologies must be a priority among municipal leaders as well. It recommends that leaders map the digital divide across the community and prioritize the expansion of affordable broadband access; and engage in a thoughtful public process to determine what emerging technologies are right for communities and how they should be used.

The report also focused on the workforce, and fair wages and their impact on local economies, suggesting officials should: ensure wage and workplace fairness by supporting living wages and increasing benefits so that cities can future-proof retail sector employment and ensure it is supportive of worker livelihood; prioritize workforce development programs to proactively address anticipated changes in labor demand and upskill workers; and promote a diverse local business economy by fostering independent retail growth that can create “strong and more equitable” economic engines.

Dr. Michael Mandel, chief economic strategist at the Progressive Policy Institute, said it was “absolutely essential” for local state and federal governments to support retail.

“I think there’s a very bright future for retail in cities—a different sort of retail—but you can’t be wedded to what you had already,” Mandel said.

Gender, racial employment gaps highlight need for development programs

The employment aspect of retail was a central part of the discussion laid out within both the report and the webinar. The report compared U.S. Bureau of Labor Statistics employment projections for 2022 and 2029, revealing a large divide in projected short- and long-term job growth in retail. Although nearly all retail occupations are set to experience modest job growth from 2020 to 2022, those numbers change dramatically when looking at projections into 2029.

For example, receptionist and information clerk jobs will see an 8.7 percent decline by 2029, while cashier position will see a 7.4 percent dip, perhaps as a result of store closings and automation. First-line supervisors of retail sales associates will decrease 5.5 percent, while packers and packagers will see a 4.8 percent downswing.

As the retail economy becomes more “tech-driven,” the report argues that understanding who is employed in each occupation is helpful to understanding who is most at risk due to the changing nature of retail. That means considering the gender and racial disparities across retail occupations.

Women make up a disproportionate share of the two most “at risk” jobs, representing 74 percent of cashiers and 90 percent of receptionists and information clerks.

On the other hand, the jobs men disproportionately hold include truck drivers (92 percent of the workforce) and salespersons (86 percent of the workforce). Note that there are actually expected to be 3 percent more drivers in 2029, and only 0.6 percent fewer salespersons.

As automation and e-commerce continue to displace frontline roles, NLC recommends cities invest in development programs that could expand traditional skills training programs to emphasize soft skills development and entrepreneurship training, since soft skills are more transferable and less vulnerable to displacement by automation.

These soft skills, which include more teamwork and personality-related skills, could provide increased opportunities for upward mobility and small businesses ownership, particularly as more roles focused on fulfilling online orders end up supplanting traditional retail occupations.

Job exodus is “good news” for retail’s future

In April, retail had its largest one-month exodus of employees in more than 20 years, with 649,000 employees giving notice. This is good news, Mandel said, because it shows how people have decided they don’t want to work low-wage jobs.

“We had 20 years of brick-and-mortar retail being a low-wage occupation industry. I think that’s just not true anymore,” Mandel said. “I think we’re going to see a rise in wages and sort of a transition as a part of this, and we’re going to end up with actually people with better jobs than they had before. Maybe I’m too optimistic but that’s the way the data looks to me.”

Given the changing environment, “there may be a lot more demand for retail [jobs] out there than we think,” Mandel said.

In the webinar, he said that labor hours created in e-commerce industries, including delivery, have been greater than the number of hours lost in retail since the pandemic started. He noted that traditional Bureau of Labor Statistics data doesn’t always tell the whole story, because retail jobs were not traditionally full-week jobs, while e-commerce positions typically include 40 hours per week plus benefits.

“A lot of the jobs in e-commerce have actually been higher paying than the ones that were lost in retail, so there’s a transition period here, but net-net this is better for workers,” Mandel said.