On foosball tables and economic development

Photo by Jon Cockley

A few weeks ago, while riding my bike in the vicinity of 5th and Washington, a friendly voice flagged me down. Jamal asked if I was lost; my stopping and starting and aimless observation of the neighborhood must have lent that impression. We ended up talking at length about Hudson, in particular the Hudson known to citizens like Jamal--young, minority, and living north of Warren Street. Jamal didn't tell me anything surprising, but it was nonetheless saddening to hear him say that "kids around here think that only white people are allowed to have businesses."

Jamal appeared to be in his mid-twenties. He works in construction doing odd tasks, earning enough to pay the rent on a basement apartment while supporting his young daughter. I asked if he had any business aspirations of his own. He thought briefly, then offered, "I'd like to run a gaming place. You know, people would come in, play video games or ping pong, I'd serve food and drinks." He presented his idea in a way that suggested he had not revealed it to anyone before.

What would Jamal need to realize his dream? 

"Money," he said. It's the same answer the economic development experts give, except they call it "capital." Jamal would need a big loan in order to rent or buy a suitable commercial space, renovate it to his needs, purchase games, equipment, and lighting, hire staff, engage lawyers and accountants, pay for advertising and insurance, and so on. Before opening his doors for business, Jamal would be in for a couple hundred thousand dollars, easily.

Which makes it very unlikely Jamal will ever realize his dream, at least according to the conventional, capital-intensive business development model. But there is an alternative model, and it provides a far more natural and less expensive path to economic growth, urban development, and self-actualization. My own recent experience, if you will indulge, will illuminate.

My partner Sorche and I rent the second floor of a house on Union Street. In addition to a comfortable apartment, we have access to a large, unfinished attic. A couple weeks ago, in anticipation of hosting visitors for Thanksgiving, Sorche perused craigslist for some entertaining diversions. She found a foosball table for $40, a ping pong table for $65, and a dart board for $35. We had to rent a van to bring everything home, but for a little over $200 we turned our attic into a pretty cool entertainment space.

Now to intersect our comparatively privileged reality with Jamal's: A century ago, folks like Sorche and me--and Jamal--would have been free to think, "You know, a lot of people in this part of Hudson would enjoy a place like this." We could have hung a cheap sign on the front of the house and charged folks a few bucks an hour to play games. Perhaps we'd have made a few sandwiches in the kitchen and sold them for a couple bucks each. And before anyone could say "business plan" we'd have a running version of the business Jamal can only dream about today.

While this might seem like merely a stray, if interesting, notion of how someone might start a business, it was how nearly all urban businesses in America got their start a century or more ago. You can still see the evidence in and around Hudson today: innumerable old buildings whose ground floors were converted to retail or business use a long time ago, only after they were built as residential buildings. These conversions allowed ordinary folks a way to make a good living while simultaneously enriching the urban landscape.

Such conversions occur occasionally today, but only within districts formally designated by zoning as mixed-use. Otherwise, the built examples you will find tend to date no later than the early 1900s. It was then that modern regulatory codes--building, labor, health, zoning, and so on--made it difficult and eventually illegal for Americans to open most types of businesses in their homes. The businesses taken off the table by regulation were not only the ones that helped make urban places urban--hair salons, laundries, restaurants, retail stores, repair shops, even taverns--but they were the businesses that citizens on the lower rungs of the economic ladder were most likely to want to open. This is why the explosion in home-based businesses over the past two decades has been limited to professional enterprises--financial consulting, software development, and other clean-hands undertakings: unlike the aforementioned, they aren't illegal to do in your spare bedroom.

The incremental economic development model is not perfect; I can think of a dozen reasons why it might not work in any given instance. But there are dozens more reasons why it generally works very well. The initial investment is small; so too is the disruption to the entreprenuer's life. Jamal wouldn't have to leave his daughter behind just to tend to his business. He wouldn't even have to leave his weekday job right away, if he wanted to try out his business idea on the weekends. And he could easily change his business if he discovered it needed to be something different from what he originally envisioned, or he could pull out altogether if he discovered it wasn't what he really wanted to do. Compare it to the oppressive situation Jamal would find himself in were he to gain access to the capital-intensive model: He'd wake up every day burdened by debt and committed to an obligation to run perfectly a business he hadn't tried out for even a day. It's a terrible set of commitments to visit upon either a city or an individual, when all anyone wanted to do in the first place was play a little foosball.