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Rising urban land values and the survival of small businesses in cities.

Rising land costs. Urban development projects. Small business in urban areas.

 


 


 

Rising land values are inevitable throughout the world.


 


 

Land values remain highest in cities and surrounding areas of the cities of Europe and extending out into the suburban areas of the world as they do throughout the cities.


 

Europe is an example of where the confined nature of urban development encourages the support of public transportation. This in turn has a limiting effect on fringe growth beyond the easy reach of public transport.


 

Therefore, urban transportation development along with other containment policies tends to contain cities at higher densities than in the United States.


 

Local governments, even in small towns are inclined to limit growth at the fringes, further adding to the increasing cost of land in populated areas.


 

Increasing population throughout the world and the movement of population toward the cities contributes to pressure on land values and operates to increase population densities resulting in pressure that contributes further to rising land values.


 

The general conclusion here is that growing populations and movement to the cities guarantees higher and higher land values.


 

Large commercial operations must either by their form of operation justify these high business costs or move outward where permitted and to areas of relatively lower land costs, usually a distance from cities.


 

Many smaller shops that are able to remain in high cost land areas do so because of their limited size and usually must be in the business of providing expensive services or small expensive items.


 

Restaurants for example, could thrive in high density areas that provide large numbers of clients and who can afford expensive services.


 

However, as their operations are only at specified times, they may not be able to bear the high cost of land as others might for the full day and the full week. All is dependent on high volume and cost of services.


 

Recently an upscale Milwaukee restaurant firm informed Whitefish Board members that rents, reflecting land values were too high for them to afford to locate there.


 


 

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Attempts at compensating for high land costs.


 

 


 

The initial reduction in costs through one-time development subsidies, tends to run out with time so that artificial stimulation of certain types of business is not long-lived.


 

This eventually brings a decline in specific locations where the subsidizes were granted, operating against business that do not receive subsidies.


 

On the other hand, an appropriate congregation of business enterprises, appropriately related, can increase the business activity of specially designed districts that operate toward off-setting the increasing value of land for an extended time.


 

This can be done especially where the subsidizes are for the purpose of integrating these business--creating enclaves rather than for temporary cost off sets.


 

We must accept the long term pressures of increasing land values and also acknowledge that any interference with market forces must enable a flow compatible with the market long term.


 

The making of temporary moves that are aimed at thwarting market forces at a given time shall be short lived.


 


 

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Energized business enclaves.


 


 

Small communities often are unaware of the need for an assemblage of small businesses collected in small groups and therefore they neglect the need to design enclaves of enterprises as small collective “business magnets.”


 

These enclaves in function act as agencies subsidizing each other collectively and helping form and contributing the energy of these magnetic enclaves.


 

The enclaves become like batteries that store generated surplus energy for distribution within the small districts helping to bring on and support additional business relationships within the enclaves.


 

Without these “battery driven” enclaves, businesses will eventually succumb to the high cost of land as they must suffer this expense alone without the means for creating additional energy and quietly face their slow and individual demise.


 

High cost commercial land requires collective energy creating capacities if businesses are to survive under these high cost conditions. Groupings, that function collectively, acting as magnets and that have usually come together casually are found in commercial areas of cities throughout the world.


 


 


 

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Developing this energy nucleus.


 


 

Where communities are to reconstitute or initiate small commercial areas, it would be advisable in most cases to begin by designing these business attracting, energy generating enclaves as total units rather than encourage random spreading that leads to still birth or early deaths.


 

A socio-physical nucleus must be formed and the enclave itself should more often serve as the destination point rather than any of the individual shops located there.


 


 

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