What's Happening to Real Estate in New Orleans?

For years, our metro area, like many, has been grappling with the death of the retail market, as demonstrated by the many articles over the years wondering what to do about Esplanade Mall. Blame abounds - Katrina, bad ownership, even the people of Kenner. Now New Orleans is about to have a second reckoning with another pillar of city commerce: office space. Once again, we’re searching for a cause - COVID, crime, parking, even cleanliness.

But Hurricane Katrina emptied office buildings as much as COVID, crime peaked in the 1990s, parking is the Eternal Problem; and real estate was able to recover and thrive in spite of any of these setbacks. Regarding cleanliness, Manhattan on trash day has consistently served as a reliable benchmark across decades.

All these scapegoats seem insufficient to explain the scale of this collapse. So how did we get here?

RETAIL-OCALYPSE!

Let's consider Amazon. It's generally agreed that Amazon has benefitted from, if not caused, the downfall of the great American retail store. How did they do this? The Amazon shopping experience is not that great. It's overwhelming, poorly organzied, you can't test out products for quality, you don't know if you can trust reviews and your package can get stolen off your porch. And yet, they are winning handily - but why? The experience of shopping in a physical store isn't bad. People like picking up and trying on and testing out items that they want to buy. People like to get out of the house, and ultimately, ask questions to real people.

Now think back to your last decade of Christmas shopping, a time of year when Amazon really shines. How big of a mental deterrent to getting your shopping done was the anticipation of the experience of getting in your car, driving out of your neighborhood, fighting your way through numerous 6-10 lane boulevards and left-turn light cycles, battling for a parking place, and then running through it all again to get home? And what choice did you make when you could avoid all this with a few half-hearted clicks of a mouse? Mall experiences are fine and getting better, but usually not enough to counter the negativity and stress of just getting inside the building. In fact, there are very few experiences that ARE good enough to make up for navigating the modern American urban environment. Even the great American movie theater is on a path to lose out eventually to at-home streaming.

Office amenities - 141 Willoughby by Fogarty Finger in Brooklyn

OFFICE… OCALYPSE?

Offices are a bit more complicated. There will always be good work environments and bad work environments. Generally, we have control over whether or not we work in one or the other. But even if your office provides massage chairs and emotional-support goats, you (before COVID) had to get there in the morning and go home in the evening, and if you're 75% of America, you're driving there in your car. In an effort to lure the work-from-home revolution out of its collective den or home office, companies are creating the corporate version of the amenity-rich shopping mall; new offices are built out with hospitality-like amenities by those who can still afford to. Will it be enough to turn the tide? It remains to be seen, but there's not much evidence it will be.

If you live in or around an American metropolis, and you are driving in to the office via our current system of transportation, you are losing at least 60 minutes of your day, on average, to a stressful experience; half of us are losing even more time than that. The collective awakening at just how much time we were losing during the pandemic has created an irreversible tidal wave that is totally expected given the choices. And now we have choices.

WHAT DO RETAIL AND OFFICE HAVE IN COMMON?

Getting there. House to car to street to road to parking lot is generally required to travel the distance between the two different zoning uses. It's been the status quo since the 1950s, long enough for it to be baked into everything in sight that we've built. The US population grows about 1% per year, or by about 2 million people. By law, most homes for all these people must be single-family homes, with lot sizes averaging 14,000 SF, and these homes must be grouped together uniformly. That pushes things pretty far apart. Now try and design for all those people to be able to drive around freely. A person takes up 1 square foot. A car takes up 80-100 times that. If you do the math, it's a sheer size issue: we are increasingly asking our cities' circulation organs to accommodate an amount of space that they simply cannot keep up with. It is prohibitively EXPENSIVE to build fast enough to keep up. And then MAINTAINING it all becomes completely out of the question.

Since that system is at its breaking point, the free market is steering us increasingly away from using it. And good thing too, because if everyone was out on the road using the old system to shop at stores and work at offices at today's numbers, it would be Traffic-pocalypse. We know this because it has happened: ask any Houstonian about Hurricane Rita. If a life-threatening emergency descends upon an American city, increasingly the advice from the govenrment is to just hunker down, because everyone getting in their cars at the same time would create a second, equally deadly disaster.

We’re at a decision point as a society. We can continue this trend, work from home and have our things delivered to us, where we will increasingly spend most of our time as sedentary, isolated beings connecting mostly by social media. Social media being still relatively new, the data has only just started coming in... but it's not good. Cyber-bullying, polemic politics, higher depression and suicide rates are all trends that have followed social media's promenence.

SO WHAT DO WE DO?

Those of us involved in building things - planners, city governments, developers and architects and designers - need to advocate to fundamentally change they physical framework of daily commerce, and we need the support of the citizens to do so.

We need to allow commerce back inside our neighborhoods, not just for the sake of business, but for the sake of our quality of life. We need to allow multi-family projects in popular neighborhoods and understand that increasing density supports local businesses, increases tax bases, and increases our neighborhood’s value, in a positive free-market feedback loop. Most importantly, we need to understand that THINGS NEED TO CHANGE, and cities need to BE ALLOWED TO CHANGE, if we are going to successfully face the many challenges facing them. We need to put away the pitchforks that come out any time local business seeks to infiltrate the sea of single-family homes, especially if the developer is local - because we need more money to stay and be used LOCALLY.

Amazon and WalMart are doing battle for our attention, but neither has a prayer to compete for my dollars for groceries, pet supplies or household items when I can get to all these places on foot with in 10 minutes, or by car within 2-3 minutes on my local street grid with no arterial roads or interstates.

Books? Tools? Christmas gifts? Amazon wins, because my only option is to drive down Veterans Boulevard during the day, and often I would rather chew glass. And when Amazon wins, those dollars leave the city and get vacuumed up by a distant out-of-town machine, when they could have been spent here, making my place stronger and better.

The New Orleans metro area just lost the most population of any major city since COVID, in spite of punching above our weight in tourism and brand recognition among American cities. Counterintuitively, we are suffering a housing crisis, and astronomical rents remain in place. How can we be losing people when there is so much demand to live here? We need our small, local developers to be free to build what they see the need for in their own communities. And if you build it; they will come.