The Long Decay of Main Street

The story told about American retail decline usually begins somewhere around 1995, when Amazon was founded in a Bellevue garage. But that story is wrong, or at least it is 40 years late. The structural collapse of Main Street retail was already well advanced before Jeff Bezos had incorporated anything. By 1985, downtown retail vacancy rates in cities like Youngstown, Ohio and Gary, Indiana were already approaching 30 percent. The culprit was not the internet. It was concrete.

The Federal Aid Highway Act of 1956 authorized $25 billion to build 41,000 miles of interstate highway. Dwight Eisenhower signed it partly from genuine enthusiasm for modern infrastructure and partly from Cold War logic: wide roads could evacuate cities in the event of nuclear attack. The act’s secondary effects on commercial geography were enormous, mostly unintended, and almost entirely irreversible.

What the interstates did was sever the relationship between transportation and urban density. Before 1956, if you wanted to reach customers, you had to be near where customers concentrated, which meant downtown or along streetcar lines. The car had already loosened this constraint somewhat since the 1920s, but road quality and the absence of bypasses still made downtown competitive. The interstates changed the calculus entirely.

Victor Gruen, the Vienna-born architect, recognized this before almost anyone else in the real estate industry. He designed Southdale Center in Edina, Minnesota, which opened in 1956, the same year Eisenhower signed the highway act. It was enclosed, climate-controlled, and surrounded by 5,200 parking spaces. Gruen genuinely believed the regional shopping mall would become a new kind of civic space, a substitute for the European town square he had left behind. He was right about the commercial model and wrong about the civic function. The mall took the customers. The civic life did not follow.

Between 1956 and 1975, more than 14,000 shopping centers were built in the United States. These were not just bigger stores. They were deliberate geographic relocations of commercial activity from the dense cores of cities to the undeveloped periphery, which happened also to be accessible by the new interstate exchanges. Land at these edges was cheap, taxes were low, and parking was unlimited because land was unlimited. Downtown could not compete on any of these dimensions. Its advantage, density of foot traffic, was being systematically destroyed by the same federal government that was subsidizing the competitors.

The consequences showed up in municipal finances within a decade. When Sears moved its downtown Minneapolis anchor store to Southdale in 1965, it took with it several million dollars in annual sales tax receipts that had been accruing to the City of Minneapolis. It also took the foot traffic that had sustained the smaller merchants around it. Department stores were and remain the anchor tenants that generate the pedestrian traffic that justifies everyone else’s rent. When the anchor leaves, the logic of the cluster collapses.

Robert Fogelson’s 2001 book “Downtown: Its Rise and Fall” traces this pattern across twelve American cities and finds it nearly universal. The timing varied by region; Sun Belt cities lost their downtowns faster because they were building their basic commercial fabric at the same moment the highway system made suburban retail viable. Older Northeastern cities like Boston and Philadelphia retained more downtown commercial activity simply because they had denser, older built environments that were harder to abandon completely. But the direction of travel was the same everywhere.

What is peculiar about the retail apocalypse narrative of the 2010s is how it managed to attribute to Amazon what had already been done by General Motors and the Federal Highway Administration. By 2010, American retail square footage per capita was roughly 23 square feet, compared to about 2 square feet in the United Kingdom and 3 in France. This was not a healthy baseline. It was the consequence of 50 years of subsidized sprawl that had created far more retail space than the underlying consumer demand could support. Amazon did not create oversupply. It punctured a bubble that had been inflating since 1956.

The numbers bear this out. Total U.S. retail square footage peaked around 2006 at roughly 7.5 billion square feet. The rate of new mall construction had already begun declining in the 1990s, before Amazon was a serious retail force. The category of stores that Amazon most directly competed with, books, music, and electronics, was a small fraction of total retail square footage. The closures that followed Amazon’s rise were concentrated in mid-tier department stores and mall anchors that had been structurally marginal for years. Sears, which declared bankruptcy in 2018, had been declining in real terms since 1985.

The political economy of this is worth dwelling on. The highway system was not a natural market outcome. It was one of the largest public investments in American history, funded by a dedicated gasoline tax that created a self-reinforcing cycle: more driving meant more gas tax revenue, which funded more roads, which induced more driving. The retailers who benefited from highway-adjacent locations did not pay for the infrastructure that made their business models possible. That cost was socialized. The costs of downtown decline, empty storefronts, declining property tax bases, abandoned civic infrastructure, were also socialized, absorbed by the municipal governments of older cities and by the residents who remained in them.

What this means for thinking about the “Amazon effect” is that the correct unit of analysis is the whole system, not the last actor to apply pressure. You cannot understand why Sears failed by looking only at what Bezos built. You have to look at what Eisenhower built, what Gruen designed, what 60 years of zoning law that required 3 to 5 parking spaces per thousand square feet of retail created. By the time Amazon arrived, American retail geography was already a structure under severe internal stress. The company did not cause the collapse. It accelerated a process already underway.

There is a useful parallel in the history of British coal. The decline of the British coal industry is often narrated as a Thatcher story, the 1984-85 miners’ strike, the pit closures, the politics of deindustrialization. But British coal output had been falling since 1913, and the structural uncompetitiveness of British seams relative to cheaper sources had been documented by the Samuel Commission as early as 1926. Thatcher’s confrontation with the miners was real and consequential, but it was the final act of a very long drama, not the cause of the underlying problem.

American Main Street is in the same position. Its displacement was a decades-long process driven by public investment decisions made in the 1950s, 1960s, and 1970s. The technology story of the 2010s and 2020s is a coda, not the main text.

What can actually be done is limited but not nothing. Cities that have successfully reinvented their downtowns, Columbus, Ohio’s Short North; Portland’s Pearl District; Pittsburgh’s East Liberty neighborhood, have done so by prioritizing residential density over parking capacity, by tolerating the messiness of mixed use, and by accepting that the commercial activity they attract will be different in kind from the department stores and five-and-dimes of 1955. They will not get Sears back. They have gotten independent restaurants, small professional offices, and specialty retail that requires physical presence to survive.

None of this reverses what happened. It is adaptation, not restoration. The spatial logic of American commerce was fundamentally reorganized between 1956 and 1990, and that reorganization is now embedded in the built environment in ways that cannot be undone by policy preferences or nostalgia. The lesson is not that federal infrastructure investment is bad. It is that it has consequences that extend far beyond its stated purposes, and that those consequences persist long after the original rationale has been forgotten.

The politicians who passed the Highway Act worried about nuclear evacuation routes and Cold War mobilization capacity. They did not think much about Youngstown’s tax base or the fate of the Kresge’s on Elm Street. They should have. The people who make infrastructure decisions are making commercial geography decisions and urban social decisions simultaneously, whether they understand that or not. The highway act is the most important retail policy in American history. It was never described as one.