I never saw my hometown until I stayed away too long....

The lyrics to the song San Diego Serenade have come to mind more than once in the six weeks since Tom Waits first found his way onto my home-office playlist:

“I never saw my hometown until I stayed away too long, I never heard the melody until I needed the song…”

It’s astonishing how many things we have had to leave behind in a few short weeks - the restaurant dinners with friends, the Friday night drinks, the gigs, concerts, festivals, events and more. We have had to stay away from our hometown for too long already. These things will gradually come back into our lives from this week, and their temporary absence has made us appreciate them much more than we did before.

Their return will be neither quick nor straightforward. I have read many optimistic words recently about how Melbourne’s main streets will thrive in a new era where people will live and work locally. I wonder if that is all wishful thinking - many local shops, restaurants, bars, live music and arts venues will not be able to return to their former state in a hurry, and some won’t return at all.

Last week the Atlantic published an article by Derek Thompson on the Post-COVID19 outlook for main streets in the United States. It is a disturbing read and I hope that it is 100% wrong.

Thompson forecasts that independent retailers will perish, that economic activity will continue to rapidly flow into e-commerce, and that high street restaurants will spin off into dark kitchens, delivery services and food trucks. All of which will leave main streets bereft of economic vitality. Many will say “yes but we are not like America - we are recovering more quickly, and besides we place a high value on the arts, independent shops and restaurants”.

Image - From bricks to clicks in Smith St Collingwood (5th May 2020)

I certainly hope that is the case. Because right now many independent retailers, restaurants and bars have little cash on hand, and are dependent on the support of Jobkeeper, rent waivers and deferred bank loans.

That ‘might’ remain the case until September, but beyond that who knows. Even as the physical distancing rules are gradually relaxed, lower trading revenues combined with the accumulated debt from preceding months (such as deferred bank loans and rent obligations) will place significant burdens on businesses seeking to re-establish after the shutdown. Over the longer term, high unemployment and economic uncertainty will see consumer spending remain low.

US retail advisor Dan O’Connor observed in the Atlantic article that restaurant capacity right across the United States will be “reduced, relocated, and repurposed” - some will relocate away from the more expensive high streets, and others will refocus on internet-based home delivery services. Many will simply close and never reopen.

Many small businesses won’t be able to hang on for too long, and it will take many months if not years for them to see turnover anything like what it was in pre-COVID19 times.

Image - vacant storefront in Brunswick St Fitzroy (5th May 2020)

At the moment it is hard to avoid concluding that vacancies will rise sharply across Melbourne’s high streets and cultural precincts. These places are likely to attract less customers than before, and those businesses that do remain open will feel the effects of their departed neighbours.

But not everyone is prepared to accept this bleak prognosis as immutable. Bruce Katz (former Vice President of the U.S. Brookings Institution) does not dispute that small business in in America are about to witness unprecedented collapse. He expects that the magnitude and complexity of this crisis to be beyond anything that America has experienced since the Great Depression.

However, he sees hope in the form of government providing direct aid to town centres as a means of avoiding not only a slow and painful economic recovery but also the destruction of civic life in America’s towns and cities. Katz calls for the creation of new non-profit intermediaries (’Community Recovery Districts’) to provide services to financially impaired firms and training and support to new entrepreneurs.

Part of their role as economic regenerators would be to work with local businesses to provide common services for networks of small businesses; for instance, procurement of goods and services, back-office functions like legal or accounting, technology platforms, and joint marketing.

Katz advocates that these organisations need to also be able to provide access to equity-driven financial products, rather than simply providing more debt. He argues that they need to be able to utilise public land, negotiate innovative land leasing and licensing arrangements, and act as non-profit development corporations to enable regeneration to occur quickly.

Image - Pre-COVID19 at the Rose Street Market, Fitzroy.

Under this model, regenerators would form a new business ecosystem that creates a viable alternative to the traditional route of every small enterprise designing their own business model and obtaining their own financing. Such organisations would need funding and strong partnerships with governments in order to achieve these outcomes.

For all its pessimism, Thompson’s Atlantic article acknowledges that the near death of the American city may eventually be its rebirth - that when rents fall low enough, independent businesses may rise again, as cheaper empty spaces become incubators for new enterprises.

But how long might that take, and what damage will be done to businesses, people and the fabric of our cities in the meantime? Why would we wait for the property market to eventually deliver the solution when we have the ability to act ourselves right now?

Whilst many may feel powerless to do anything to address these challenges, those in government, urban planning and property have the tools at their disposal to take action now. We can create Economic Recovery Districts across Melbourne and our regional cities, and undertake the critical recovery tasks described by Katz in these places right now.

Tom Waits’ refrain that “I never heard the melody until I needed the song” rings just as true in Melbourne today as it did when he originally wrote it about his San Diego hometown in 1974.

Perhaps we are hearing and seeing for the first time how precarious the existence of many restaurants, cafes, shops, bars, creative industries, live music and arts venues has been leading up to this pandemic. Perhaps now will we appreciate their real value to us, and understand that their recovery will only be possible with the support of the entire community.

Now that we have heard the refrain, we need to take action