The Evolution from Big-Box to Big-Warehouse

I often write things here to work through ideas I have or connections I’m trying to make. Lately I’ve been thinking about the evolution of cities and how much historical development rhymes with current growth and conditions. And can we use our understanding of rhyming history to come up with solutions to big problems such as affordability or time poverty?

I’m still not sure my answer because in order to know what we’re solving for, we need to understand how we got here. Sclerotic development and building is one thing, but how did it get like that? And is it just about housing and transportation? Or is it a cascading failure leading to an affordability crisis which transcends typical silos of urban thinking?

In my mind I keep circling back to thinking the problem is distance. There are two complimentary ways I am looking at this. First is Waldo Tobler’s First Law of Geography. “Everything is related to everything else, but near things are more related than distant things.” The second is Henry George’s thinking that land values rise because of the proximity of people and the public infrastructure developed to facilitate their proximity.

This proximity generates value and familiarity, and our continued sprawling urban development driven by the automobile has extracted those things. As such, it’s currently very easy for private actors to extract value from urban wealth.

The catalyst for this long term sprawling expansion is the invention and proliferation of the automobile powered by gasoline. We’re sitting at around 100 years of this development paradigm. But while the automobile played a starring role in the play, the landscape that it created (including endless housing, commercial, and industrial sprawl) has now taken on a life of its own.

Consider the history of big box stores and what drove their growth. After several oil crises and an affordability crisis in the 1970s there was a big move for deregulation including in freight and goods competition. New Deal regulations on trucking were removed with the Motor Carrier Act at the end of Carter’s term allowing big retailers like WalMart to build new types of logistics networks that allowed them to drive down retail prices.

Pair that with hostility towards anti-trust laws during the Reagan administration that resulted in waning enforcement of monopolistic practices and big-box stores were off and running. Since big retailers were cornering the market and crushing competition, they stopped serving rural areas and neighborhoods where people could be forced to drive to the store. Food deserts appeared for the first time ever and driving further to shop continued to be normalized.

These retailers fed on this regulatory landscape and continued to sprawl into suburban commercial land and built buildings that were obsolete in just a few decades. They didn’t provide job centers like main streets or downtowns, but they didn’t have to do so in order to survive. They were tied to the sprawl that was leaching the value generated by nearby cities.

Now e-commerce has evolved the big-box concept for in person shopping into a big-warehouse concept. Without the need for physical spaces where people go and buy goods, the e-commerce giants, which include some of the evolving big box giants, moved their warehousing even further away from cities and evolved their logistics to take advantage of the public infrastructure of roads and highways. Just like sprawl, this will have environmental and social impacts over the long term.

This rhymes with cities and their revivals starting in the late 90s early 2000s. Once land in city centers was devalued by the initial sprawling growth of housing and commercial, people saw value in cities and started moving back and driving up values again. Now delivery companies are driving up the price of industrial land in cities to make sure just in time delivery systems work as they compete with each other for dominance and monopoly.

What’s interesting about the previous pivot point of the 1970’s is the way in which different country’s decided to adapt. In the Netherlands the country went all in on sustainable transportation, beefing up cycle and transit networks.

In the US the winning political coalition responded to the problem by dismantling public sector capacity and ignoring transition opportunities.  We’ve paid for it ever since with lower costs for goods and services, but higher costs for providing public assets such as health care, transportation, and housing.

The question then is how do we address our current predicament while learning from our past experiences. With the automobile based transportation paradigm, we’re literally running out of land to develop that is within a reasonable distance of our employment and value generators. This is not just happening in blue cities and states, it is happening in sunbelt states such as Texas and Arizona.

The current answer to this problem for white collar workers seems to be work from home and order everything online from warehouses that continue to sprawl and need freight service dependent on roads. But that leaves everyone else out of the prosperity and in many cases leaves them worse off due to environmental and health impacts. This system as it exists doesn’t work for half of the population.

The answer to all this could be more housing that enhances proximity and faster transportation, but then that doesn’t address the problems we’re generating with e-commerce. And self driving cars are still just cars and they certainly don’t solve affordability an affordability question at the moment.

I know we can’t solve this with “one simple trick” and we’re not going to have all the answers in just one sit down. But I continue to noodle on all of these convergences and rhyming histories and hope you all do too.

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