Bid to Stay Home May Help Local Business. (Commentary).

FOR much of the past half century, American society -- and nowhere more than Southern California -- has been characterized by ever-growing mobility. Yet today, with trends accelerated by 9/11 and its aftermath, the era of constant movement may be waning.

These emerging "post-nomadic" trends may create a new paradigm for business, not only in Southern California but elsewhere. The trend towards bigness, sameness and access to air travel could fade as a more security-oriented local focus comes to the fore.

Many of these forces, notes Milken Institute demographer Bill Frey, reflect long-term demographic trends that predate Sept. 11. Americans as a whole, Frey says, have become more sedentary. Back in the 1970s, over 20 percent of Americans moved every year. A decade ago it was over 18 percent; today it is barely 15 percent.

As the population ages, it tends to become less rather than more mobile. Most baby boomers, Frey suggests, are likely to "age in place" -- that is, stay in the regions where they are already living. Once-family-dominant areas like the San Fernando Valley are now aging rapidly, as original homeowners choose to retire in neighborhoods they raised their kids in.

At the same time, other researchers have given growing priority to the question of "community" -- the importance of family, neighborhood and church. The popularity of loft developments in older neighborhoods, new urbanist-inspired communities like Valencia and the revival of smaller towns on the periphery illustrate these new priorities. The rise in volunteerism, even in blase Southern California, is yet another sign.

The events of Sept. 11 seem likely to reinforce these trends. As air travel falls precipitously, down as much as 30 percent in some areas, various "substitution" effects have begun to occur. People are not giving up on recreation; they are instead re-directing their activities towards more local venues.

As people choose not to travel by plane, suggests Michael Collins, vice president of the L.A. Convention & Visitors Bureau, they are seeking local places to dine, and recreate. "Try to get a room at the Ojai Valley Ranch," Collins points out.

Businesses that serve both local and tourist markets, like King's Seafood Inc., have seen these dual impacts. King's owns 11 restaurants in the greater Los Angeles area, including the Water Grill in downtown Los Angeles. Overall volume is off only 3 percent, but those units that are dependent on out-of-state tourists, such as in Santa Monica or San Diego, have seen business drop by as much as 10 percent.

Businesses that cater predominately to locals have held their own. As a result, King's so far has only had to lay off five of its 1,300 employees in Southern California. "So far it's not too bad outside of Santa Monica and San Diego," says co-founder Sam King. "And the workers have made things easier by dropping shifts, so we can keep pretty much everyone at work."

Similar patterns can be observed among retail districts. Tourist-oriented venues like Third Street Promenade are suffering, while more localized districts, like Ventura Boulevard in Studio City, seem to be faring better.

Businesspeople may be tempted to dismiss these phenomena as temporary, even illusory. And once the war on terrorism subsides, Americans, in some numbers, will return to their nomadic ways.

Yet, a close look at longer-term demographic and geographic trends, as well as the increasing flexibility associated with new telecommunications technology, suggests that the post-nomadic era may be just beginning. The question is, what are the long-term implications?

Clearly, the market for retail, entertainment and culture-related developments that depend on those living within driving or even walking distance is likely to hold steady, or even grow.

Similarly, developments that appeal to the new post-nomadic business and residential consumer might be in good stead. One example is Newhall Land Co.'s Valencia community, which stresses both a highly evolved fiber-optic network and an accessible "town" center. By contrast, the more nomadic kinds of developments, such as those built around major airports and destination resorts, might have less appeal.

As the search for a post-nomadic environment intensifies, businesses and communities must start re-orienting themselves to new consumer, residential and commercial trends likely to take shape in the emerging post-Sept. 11 reality.

Joel Kotkin is a senior fellow at the Davenport Institute for Public Policy at Pepperdine University and at the Milken Institute in Santa Monica. He can be reached at [e-mail].