Can Closing Streets Help Businesses Get Back on Their Feet in a Post-COVID Economy?

by Nikita Jakkam. Edited by Maya Crowden

Many countries have turned to lockdowns and stay-at-home orders to curb the spread of coronavirus and lessen the strain on healthcare systems. Many businesses have closed their doors, incurring huge losses in revenue, in order to comply with these measures and protect the health of their employees and customers. The food service industry in the United States has hit especially hard. 60% of jobs lost in March were from the food service industry despite the sector contributing only around 4% of US GDP. Overall, small businesses have also seen decreases in revenue, ranging from a 25% average decrease in revenue in Wyoming to over 60% loss in North Dakota.

As lockdown restrictions are being lifted, small businesses have been looking for new and unique strategies to restart business while still maintaining proper social distancing measures. One strategy has been implementing street closures in cities to create more space for outdoor dining. This new strategy emulates the use of “Open Street” programs, which had been created to improve the quality of life in public spaces.

The most famous example of an open street program is the Ciclovía in Bogotá, Colombia, which restricts vehicular access to certain streets on specific days to allow pedestrians to utilize street space for activities, like exercising and cycling. Similar open street programs exist around the world, including the “Summer Streets” event taking place in August in New York City, weekly “Car Free Days” in Jakarta, Indonesia, and the “Atlanta Streets Alive” event in Atlanta, Georgia. While open street programs were initially created as a public health measure to increase mobility and quality of life in urban areas, studies have also looked at the economic impact of open street programs on local businesses.

The literature on open street programs has found that participating businesses have seen moderate increases in revenue, though the degree of economic success may be attributed to factors such as business owners’ level of involvement in the open street program and accessibility of closed streets to residential areas. A study on the impact of an open street program on the local economy in St. Louis, Missouri, found that 82% of the money spent on businesses in the area was associated with the open streets program, and over half of customers spending over $10 at these businesses. Additionally, 56% of visitors became aware of new businesses on the streets that participated in the program. Based on data taken from a paper published in The American Journal of Health Promotion, businesses reported a 44% increase in revenue during open street events in comparison to days when street closures weren’t in effect.

Cities throughout the US are implementing COVID-related street closures to both provide pedestrian and bike access to local residents and to enable businesses to utilize outdoor spaces. While many cities have participated in open street programs in the past, streets closures are now being put into effect specifically to increase mobility and bolster social distancing during the COVID-19 pandemic.

The major change between past street closure programs and those related to COVID-19 has been ensuring that social distancing guidelines are followed. Many areas are using barricades, law enforcement, or a combination of the two to maintain social distancing. In order to ensure the safety of their employees and customers, businesses on closed streets must also continue to follow the social distancing policies specified by their local and federal health departments. In Montgomery County, Maryland streets in Bethesda were closed down to create the “Bethesda Streetery” — stretches of streets closed off from vehicular traffic to increase the square footage of retailers by extending seating into the street.

How can businesses on closed streets continue to bring in revenue while practicing safe social distancing? The literature on past open street programs suggests that increased planning around street closure procedures, keeping business owners on closed streets in the loop, and catering to the themes of the neighborhood are some ways to effectively attract residents to visit local businesses. Planning for street closure events must take the number of local COVID-19 cases into consideration since people may be reluctant to go outside if the area is seeing a spike in cases.

Recent COVID-19 related street closures in New York City were deemed unsuccessful. The program was terminated early due to poor weather, concerns over social distancing enforcement, and the lack of people utilizing the open streets. To ensure the success of subsequent street closures, businesses on closed streets should focus on attracting people that are most likely to utilize the open streets, and street closures should be put into effect on days and at times where people are more likely to utilize street space.

Street closures that are restricted to early mornings and evenings could provide a way for residents to exercise and bike earlier in the day and for restaurants and businesses to set up outdoor dining events in the evening. On the other hand, weekend closures may be most effective midday when people may take advantage of street closure events to eat out or just enjoy the weather.

Since public transportation usage will likely continue to be curbed to prevent further spread of COVID-19, business owners involved in COVID-19 related street closure events must consider focusing their attention on attracting customers in their neighborhood and nearby residential areas. Street closures in urban areas may attract nearby residents who are looking for more open space to exercise and present retailers with greater foot traffic. Additionally, successful street closures may benefit from being next to large parking spaces, which could enable residents from nearby neighborhoods to access businesses located on these closed streets.

Fundamentally, the success of COVID-related street closures in boosting the local economy rests on a holistic, precise understanding of nearby neighborhoods, the willingness of both retailers and consumers to participate in street closure events, and careful logistical planning. These recommendations combined with social distancing enforcement may provide a way for businesses to recover in a post-COVID economy.