Honolulu Advertiser Second Opinion column by Cliff Slater

January 3, 2001

Footnotes:

(1) A prime example is that of requiring developers to provide more parking than they believe they need and for which they can, at best, only rent for 50¢ a foot. This zoning requirement has provided far more parking in town than can economically be justified and has resulted in parking being far cheaper than if simple economics drove its provision. This alone has done more to encourage people to drive their cars to work than any other single factor. See also:

Surber, Monica and Donald Shoup and Martin Wachs. Effects of Ending Employer-Paid Parking for Solo Drivers. Transportation Research Record 957. 1984.

Willson, Richard W. Parking Subsidies and the Drive-Alone Commuter: New Evidence and Implications. Transportation Research Record 1181. 1981. pp. 50-56.

(2) Warner, Sam Bass Jr. Streetcar Suburbs: The Process of Growth in Boston, 1870-1900. Harvard University Press. 1978. Possibly the best explanation of the development of a city’s suburbs with particular note on how they were impacted by horse-cars and streetcars.

(3) Honolulu lagged the national experience in that downtown traffic congestion would appear to have peaked in the early 1920s. Currently traffic congestion is mainly a problem in the approaches to downtown, not in downtown itself.

(4) Wriston, Walter, B. The Twilight of Sovereignty: How the Information Revolution is Transforming Our World. First Replica Books Edition. October 1997. p. 111. Originally published by Scribner in 1992.

(5) Data in this linked file is from Hawaii Business Magazine for 1990 and 2000.

(6) GROSS STATE PRODUCT, PER CAPITA GROSS STATE PRODUCT AND RESIDENT POPULATION: 1958-98 at: http://www.hawaii.gov/dbedt/db98/index.html Table 13.02.

What is downtown Honolulu’s future?

Most believe that government action is the biggest influence on a city’s development. However, when we look back we find that simple economics has been, and remains, the driving force—and Honolulu is no exception.

Sometimes government does have an influence on a city’s growth—but not much and usually to its detriment. Government mandated parking policies are an example. (1)

Before the late 1800s and the advent of the telephone, day-to-day business communication was done in person and that determined the concentration of business in downtowns across the U.S. Shipping by land cost far more than by water and so warehouses tended to be at the waterfront. Here longshoremen could unload directly from ships to warehouses and subsequently to riverboats or horse drays.

In the early 1800s there was little public transportation and it was expensive. Thus, workers’ homes were always within two miles of downtown—less than an hour’s walk.(2)

For all these reasons cities of the mid-1800s were virtually all small, dense and on the water.

But in 1890 (1901 in Honolulu), electric streetcars changed all that, allowing workers to live six miles from downtown and still be within an hour of work. Suburbs began blossoming (sprawling?) allowing cities to became more populous and this caused downtown traffic congestion—long before the automobile—to be far worse then than it has been at any time since. (3)

By 1915, the automobile and the truck started to make serious inroads in transportation and by the 1920s, manufacturing and warehousing began to move out of downtowns. In the 1930s, retail stores started to follow residents out to the suburbs. The late 1940s saw the first significant suburban shopping center. Through the 1960s, retail stores, manufacturing and wholesalers all found it more convenient to be on the outskirts of town where truck traffic could move unimpeded.

Then ocean freight began arriving in containers requiring much larger facilities and leaving the old piers and warehouses deserted. Downtowns began to be taken over by offices and the ever-burgeoning government sector. This general transformation of downtowns happened all over the U.S. including Honolulu.

For the future we are reasonably sure that the developing trends in technology will continue. Vastly greater bandwidth will allow digital communication of all kinds to be faster and more immediate. For example, the videoconference used by many of our larger companies will become commonplace for even the smallest business. It will likely be in 3-D and of a first rate quality.

Many professionals, such as architects and accountants, will continue the trend to work from home, or nearby. There will be continuing declines in clerical positions, bank tellers and gas pump attendants. Knowledge purveyors such as life insurance salesman, those performing routine legal work and certain kinds of medical advising will all continue to decline. The auto dealership will go the way of the encyclopedia sales office as we consumers gradually make the transition to dealing directly with auto manufacturers.

The astonishing amount of information on the Internet assures this process. Just as kings of a few hundred years ago did not have the living standard of the average worker today, the stockbroker of 20 years ago did not have the information available to today’s amateur investor—and so stockbrokers have become a fading profession.

As Walter Wriston puts it, “the layered hordes of middle management whose primary function was once to move information up and down the corporate hierarchy are disappearing.” (4) And the process will continue. In the new economy it will be, “create or die.”

So downtowns will continue to have less importance. This process may have already begun. Rents currently available in downtown Honolulu are on a par with those in the Hawaii Kai, Pearl Ridge and Kailua, whereas they used to be 23% greater.(5) Obviously, downtown offices no longer have the higher value, relative to those in the suburbs, they once had. And so, at a time when Hawaii’s economy is larger than it was ten years ago(6), it would appear that we have fewer jobs downtown.

None of this bodes well for a resurgent downtown. However, having written that, let me say that there are no facts about the future—only conjectures.