Dear Winnipeg

A Fun Blog About Infrastructure and Municipal Finance

It’s Business, It’s Business Time!

You know when I’m down to my socks, it’s time for business.
That’s why they call it business socks, ooh.

Dear Winnipeg,

Here’s a pop quiz for you. Every day, 38,300 vehicles drive down Henderson Hwy in Elmwood. How many of the cars driving through Elmwood spend money at our local businesses?

Give up?

The answer is zero.

That’s right. None of the cars driving though Elmwood spend any money at our local businesses. Only the cars that stop, and whose occupants then get out, spend any money here.

Now don’t get too frantic or corybantic. I know it seems like I’m being pedantic, getting caught up in semantic…

[Er, semanticS. Obviously, the Rhymenoceros I am not.]

But seriously, the cars that drive through are no good for business. It’s only the cars that stop that are.

Now, that may seem brain-numbingly obvious, but it’s ridiculous how often we forget that most basic concept when it comes to city, neighbourhood or street design. Because, like we’ve talked about before, actually more than once, the things that are good at making cars drive through an area quickly are the opposite of the things that are good at making them stop so their occupants can get out and stay long enough to spend money.

And since these things are opposites, when we try to do both, we get neither.

Instead, we get the “futon of transportation“, a crappy sofa that is also a crappy bed.

But for transportation. [Obviously.]

And despite what we were told in the 90s, if we want a good bed as well as a good sofa, as respectable grown-up members of society who are stellar at adulting, we recognize that those are two separate pieces of furniture that we keep in two separate rooms.

Likewise, if we want a place that is good for business as well as a place that is good at moving cars quickly, we need to recognize that those are two separate places.

Which brings me back to that stretch of Henderson Hwy in Elmwood. Raise your hand if you think congestion is not a problem here.

No one? I see…

Ok, raise your hand if you feel this is a beautiful, thriving area that you want to travel to in order to spend hours just lingering in, patronizing several of the local businesses, and that requires no improvement whatsoever.

Also no one?

Exactly.

We have to give up on on the delusion that we can have a place that is both great for business, and great at moving cars quickly. To be successful, we need to go all-in on one or the other.

And I think it’s obvious which one the people and businesses of Elmwood are choosing.

Do you think this business wants cars to stop or to go?

And the rest of Winnipeg should be happy with our choice. [Yes, Jeff, even North Kildonan.]

Because a productive neighbourhood with a thriving business district generates more property and business tax dollars for the City, which benefits everyone.

And because going all-in on the alternative would mean having to expropriate the entire surrounding neighbourhood in order to widen Henderson some more, and to completely remove ANY reason for stopping. According to the latest property assessment data, the expropriation alone would run over $1 Billion. We certainly can’t afford that.

But even if we could, there are probably a lot of better things we could be doing with that kind of money. [For one, think about the pepileptic dogs!]

Now, to be clear, I don’t want you to believe that I think we should just get rid of all cars. I’m not saying that at all. What I’m saying is that if we’re trying to make a place that is good for business, then we shouldn’t care how well cars can free-flow on out of that place. In fact, we’re actively trying to achieve the opposite. Congestion is just the price we pay for having nice things.

But anyways, that’s not even really what I wanted to talk to you about today.

Yes, fighting congestion means fighting the characteristics that make a place good for any business, but what I actually wanted to talk about is how our obsession with catering to vehicles has a disproportionate effect on small businesses specifically.

To start, there’s the obvious one, parking. To keep traffic flowing, we make it illegal to park on some streets, sometimes permanently, sometimes only during rush hour. But people arriving in cars still need to park somewhere, and the main way city planners of the past tried to solve this was by mandating a minimum amount of off-street parking for every type of building.

For example, our zoning by-law forces even a teeny-tiny 500 sq ft restaurant to set aside 1,650 sq ft of land for parking. And that isn’t free. Given that even a single surface parking stall costs $7,000 to build, the 5 required stalls will add an unnecessary $35,000 in start-up costs for this little restaurant. No big deal for a large national chain, but for a small business though…

Here’s another example. In a pedestrian-oriented neighbourhood, how do you choose a restaurant to eat in? Well, more than likely, you’ll be able to peek in the window to get a feel for the ambiance. Their specials might be out on a sandwich board on the sidewalk. They may even have their entire menu (with prices) in the window. At the speed of walking, you’ve got plenty of opportunity to take all that in and make a confident choice, even if you’ve never heard of the place before.

In an environment like this, small, local restaurants compete on an even footing with large, multi-national chains.

Soupe du jour, camembert, baguette!

Now compare that to a car-oriented street like Regent Ave.

Travelling at 50 or 60km/h, you only have, at most, a few seconds to make your decision. This is where multi-million dollar advertising budgets come in handy. Large national chains have the advantage of having been able to inform you ahead of time of what to expect from their brand. You have been so exposed to it, that by the time you drive by, you only need to see their logo for a brief second, and you already know what you’re going to get from them. Given that certainty, how often are you willing to gamble on the small place you’ve never heard of before? That is, if they can even afford the huge sign needed to be visible from the road.

In an environment like this, large national chains with big advertising budgets have a marked advantage over the small local places.

You are definitely the most beautiful sign on the street, depending on the street.

So when large chains start to show up everywhere, displacing small businesses, that’s not the “free market” expressing its desires. It is the result of a market being distorted by regulations, land use rules and transportation policies that continuously favour big, well-financed businesses at the expense of small, local shops.

And that’s before we even talk about the massive tax breaks and direct monetary subsidies which are only ever available to the big players. Sorry local business owner!

Yet, despite this uneven playing field, still a whopping 72.7% of jobs in Manitoba are in small businesses… that says a lot about how resilient small businesses are, that we can stack the deck against them, and they still show up for us in a huge way. Also, you have to wonder about the supposed “free market preference” for big chains… despite all the advantages, subsidies and tax breaks we give to big business, nearly three quarters of the economy is still in small business.

It’s easy to see why. Small business owners tend to be our friends, family and neighbours, people we’ve built relationships with. We want to support them, because it makes us feel good.

But there are many other reasons why we need to ensure small, local businesses thrive in our city.

One is the economic multiplier. We’ve talked about this before, and it’s been demonstrated in many studies that more money stays in the local economy when spent at local stores than at national chain stores. Nearly three to four times more, actually. That’s good for city coffers.

Another reason is for social equity. Small businesses make it possible for anyone in a city, even those with little or no money, to participate in economic life and better their own situation, as long as they are allowed to start small enough. They can start with nothing, and end up with something. But that’s only if the rules even permit it, and also if we haven’t made it disproportionately difficult to navigate for the little guy. Big businesses, on the other hand, love complicated regulatory environments with lots of various fees. Keeps the riff-raff out.

And maybe you didn’t know this, but it’s also a gender issue. According to the 2020 State of Women’s Entrepreneurship in Canada report, most women-owned businesses employ 20 people or fewer, while men almost exclusively own and operate the businesses with over 500 employees. The report also says that 83 percent of women-owned businesses are financed with personal savings, rather than the big-business tools of equity investors and debt. And even when women want to use those big-business tools, they often face more obstacles than men in doing so. Adopting policies that favour small businesses, or at least put them on an even playing-field with big business, is good for gender equality.

So what are some of the easy, low-hanging fruit?

  • Stop worrying about congestion in places where we’re trying to build successful business districts. Cost: $0.
  • Remove off-street parking requirements. Cost: $0.
  • Allow Accessory Commercial Units as-of-right in more places. Cost: $0.
  • Further simplify patio permitting for small restaurants. Cost: $0.
  • Remove red-tape for mobile merchants, temporary storefronts and farmers’/flea markets. Cost: very near $0.
  • Slow traffic, and make it easier to access local businesses on foot. Cost: way less than a single subsidy to a big business.

And there are many more. We just can’t be afraid to try things. Because while supporting big business often costs us literally tens of millions of dollars in subsidies and tax breaks, supporting small business, or at least letting them compete on an even playing field with big business, will usually cost us little or nothing, making for a pretty stellar ROI if we’re successful, and literally no downside if we’re not.

Our small businesses need us right now, and our own economic well-being as a city depends on them. So let’s do this!

It’s simply a matter of changing the rules of the game.

Kisses,

Elmwood Guy

[P.S. A kiss is not a contract, but it’s very nice.]