Everyone wants to see downtown Walkerton thrive once again. Today, it reflects the hope for a future in restoring the historic shopping /commercial center of town. The 19th century buildings symbolize our community. They are icons for the 21st century! We also, hope someone moves into all those vacant houses and empty residential lots filling Walkerton's neighborhoods.
That’s the message from Alan Mallach, senior fellow with the Center for Community Progress in Washington, D.C., and the author of new report on vacant properties published by the Lincoln Institute of Land Policy in Cambridge, Massachusetts.
This report, The Empty House Next Door: Understanding and Reducing Vacancy and Hypervacancy in the United States, is a sobering look at how vacant properties continue to drag down neighborhoods in communities around the Midwest.
Empty lots near the downtown Walkerton shopping district could support affordable housing development.
This might seem like a residential story. It’s little surprise, after all, that empty buildings would drag down property values in residential neighborhoods. But it’s actually a commercial real estate story, too. Those same empty buildings slow the arrival of new retail, restaurants, apartment buildings, and offices.
And that’s why commercial real estate professionals should want to see those vacant houses become filled, too.
Mallach says that the outlying Detroit area provides a good example of how vacant residential properties can impact commercial real estate. Many towns in the southeastern Michigan area were barren.
“The office centers, the commercial buildings, they were all almost entirely vacant,” Mallach said. “Now they are being filled up.” Why? Mallach says that a residential revival came first, and then commercial activity followed.
Walkerton's commercial district has plenty of business ideas to offer in a safe environment. Photos by Joel Steven.
“When you start to see an area revive residentially, commercial follows,” Mallach said. “Restaurants, nightclubs and taverns start to come in first. That is followed by more retail-oriented commercial activity. You see this in a lot of areas, in the downtown or near the downtown. You’ll see a conversion of old commercial buildings into residential. When that is successful, commercial follows.”
This pattern has played itself out across the Midwest. Many Indiana town's like Brownsburg, and LaPorte for example, are enjoying a revival in their commercial centers that are largely fueled by rising demand for apartment units in the core.
Many challenges, though, come to the outlying areas of municipality's like South Bend. It’s far more difficult to eliminate vacancies in the farther-flung communities of a city. And when these areas are filled with vacant houses, there is little incentives for retailers to open new shops or for developers to build modern apartment buildings.
The Lincoln Institute of Land Policy reports that just a few decades ago what the group terms hypervacancy – an extreme level of vacant residential properties – was limited to just a few neighborhoods. Today, though, large swaths of town's and cities are dealing with this problem.
In 2015, for example, more than 49 percent of the Census tracts around Flint, Michigan, suffered from extreme hypervacancy, in which more than a quarter of the residential units in each tract were vacant. Mallach says that areas plagued with hypervacancy generally have no commercial activity other than the random fast-food restaurant on a busy street corner.
This is a change. When these cities were built, every neighborhood had its own shopping street, Mallach said. “They were pretty much wall-to-wall storefronts, often with apartments above them,” Mallach said. “These streets, to the extent that they still exist, are in big trouble if they are in high-vacancy areas. There simply is not the demand in those areas for that walking-oriented commercial space.”
Part of the problem? Consumers’ shopping patterns and entertainment habits have changed. Mallach again pointed to the Detroit area, and the neighborhoods in the parts of the city with less dense populations. The people in these neighborhoods with disposable income have cars. They get in their cars and drive to the supermarket in a nearby suburb.
They don’t walk the four to six blocks to shop in their local neighborhood. Because of this? The commercial in these neighborhoods tends to wither.
“When you ask people if they’d shop in a neighborhood shopping street with a baker or grocer, they always say they would,” Mallach said. “But in reality, it doesn’t pan out. They still get in their cars to do their shopping.”
What causes a shift in these neighborhoods? Mallach says these areas need a critical mass of residents and disposable income. Once developers do attract residents to an area with modern apartment units, commercial uses follow.
These residents want somewhere to eat or drink, so taverns and restaurants pop up first. Then come the grocery stores, additional apartment units and other retail uses.
Mallach uses loft apartment living as an example. The rejuvenation in this now trendy neighborhood started with a few residential rehabs. Once people started moving in, the restaurants and bars followed.
“It became a destination,” Mallach said. “It finally got a supermarket. You need a critical mass before that can happen.”
And that critical mass of residents with disposable income? It has to be a substantial number. Maybe, with a few new apartment buildings in and around downtown Walkerton people will get out to walk and enjoy the historic center of town?
Until those residents move in? And if nearby houses remain vacant? Don’t expect commercial real estate development to kickstart an area. The lesson from the institute’s report is clear: Residential needs to kickstart any area’s rejuvenation. Commercial in this instance? It follows. We need to find investors who are willing to make this happen! The Walkerton Economic Development department is waiting to help those who are interested. Contact: Phil Buckmaster – 574-586-7063 / firstname.lastname@example.org