Anthony Flint had a piece on CityLab on Wednesday titled “The Tragic Comedy of Small Business Permitting,” lamenting the calcified, regressive nature of many rules and regulations applied to small (and large) businesses in urban settings. He writes,
At the place I’m staying at through the new year, the On the River Inn in Woodstock, Vermont, I inquired why we had the elegantly appointed bistro and bar all to ourselves. Only guests allowed, replied the bartender, because if they want to be open to the public, a specific number of excess parking spots are required. It’s the first time the arcane law has been tested in 40 years—the hotel is the first new building in town in that time—but there’s no opportunity to re-assess the Long Trail Ale-to-parking ratio. The entire enterprise is subject to many regulations a half-century old.
Flint’s piece doesn’t break any particularly new ground—much of it consists of a transcription of an only marginally funny Xtranormal video made by a jaded planner in San Francisco—but it is a decent summary of the challenges facing small businesses that attempt to function in the context of an aggressive, inflexible regulatory regime. And it brought to mind—just in terms of pure outrageousness—a couple of incidents I read about recently that, I think, illustrate the problem nicely.
My neighborhood in Albany recently gained–though I, despite being vegetarian, haven’t been there yet–a new veggie/vegan coffee shop dedicated to “hitting the brakes” on climate change and the carbon lifestyle, etc. It took them a few months to get things together, certainly unaided by the city of Albany’s regulatory provisions. Check out especially what local signsmith Frank Smith had to say in the comments below the post (Red Poppies was the Polish bakery that occupied the space before The Brakes):
There’s very little about this situation that can be described without resorting to profanity. I suppose there might, theoretically, be some justification for permitting signs in windows—though I really doubt it—but the mere existence of a city regulation governing the size and duration of a temporary paper signs is very nearly enough to drive me into libertarianism. Sure, it might not kill the business to not have a sign—but a new business, in particular, does stand to benefit from being able to advertise itself from within its own boundaries—but what, at all, is the point of making a new small business owner spend more time, and more resources, filling out more government forms? Remember, this is a business renting space in a mixed-use building, dedicated to the slowing of climate change and to responsible environmentalism. Entirely aside from its almost-cliched Millennial—attracting properties, this EXACTLY the kind of business somewhat economically stagnant cities like Albany should be desperate to attract and keep. Making the life of the business owners harder is just incomprehensibly bad policy.
Meanwhile, in New Haven, messy zoning has collided with what seems to be a mixture of community prudishness and rent-seeking by local business owners, as the New Haven Independent reports:
A loophole in zoning regulations is enabling a third liquor store to open on a single block across from the Green — unless neighbors succeed in shutting it down… Normally local zoning regulations say stores with package permits must be more than 1,500 feet from each other. But an exception — Section 42.1(g) — excludes that section of the city from the provision, specifically “the area bounded north by Chapel Street, east by Church Street, south by the Oak Street Connector, and west by Temple Street.”
New Haven zoners believe that the exception in the code is an artifact of the time, after urban renewal took its toll on New Haven, when the entire relevant block was a single massive, car-oriented mall. But in 2014, when approached by reporter Aliyya Swaby, the owner of one of the two existing liquor stores on the block was only too happy to join the opposition to the newcomer, which he had previously not known about. There is certainly a case to be made that there is a public interest in restricting the presence of liquor stores near the New Haven Green, or anywhere, but it is hard to see how having three, rather than two, operating in close proximity will seriously degrade community life.
It’s hard to see where the opposition to the new store is doing anything other than enabling rent-seeking by the owners of the existing stores. Opposition would be more understandable if this were a national chain seeking to drive locals out of business, but all three stores are locally owned. Maybe a third store will drive all three out of business through excessive competition; I grew up hearing stories of how the two kosher meat plants in Sioux City, Iowa (where my family went to synagogue for a couple of years when I was little) drove each other out business through refusal to merge and cooperate. But liquor is a pretty resilient commodity, and agglomeration economies are strange beasts. Back here in Albany, there are three dedicated mattress stores, plus a Bed, Bath, and Beyond AND two department stores, within a mile or two of each other on Wolf Road and Central Avenue around Colonie Center Mall.
It’s well-documented that liberal (especially old, Northeastern) cities are generally presumed to have more restrictive regulatory regimes than their Sunbelt counterparts. Often, in political discourse, this gets lumped together with high taxes and a functional welfare net as being part of a climate of “business-unfriendliness.” But there’s no particular reason that needs to be the case. Given that many liberal cities continue to enjoy higher quality-of-life ratings, and that demand for housing in places like New York City, Boston, Washington, DC, San Francisco, and Los Angeles has kept housing prices stubbornly high, there’s clearly little or nothing about the high-tax climate that’s intrinsically a turn-off to business. Rather, businesses large and small are willing to accept the trade-off of higher taxes for better public services (transit, clean streets, libraries) for themselves and especially for their employees.
But the restrictive regulatory regime that is all too characteristic of many “blue” cities doesn’t fit neatly into that framework—and it IS a turn-off to businesses, and especially to small ones. There is an apt comparison to housing policy. As Derek Thompson wrote in The Atlantic last October, liberal cities tend to be less affordable than their conservative counterparts. There are, as with any complex policy issue, several elements behind that phenomenon, but the primary one is that conservative cities simply tend to be more pro-development: they allow much more housing to be built. For whatever reason, liberal cities have taken a turn towards following the (perceived or real) interests of existing homeowners, rather than promoting the public good through allowing new development as they grow. Ilya Somin wrote in the Washington Post’s Volokh Conspiracy blog that
As is often the case with perverse regulatory policies, excessive zoning is in part the product of a “baptist-bootlegger” coalition. Well-meaning, but badly misguided Baptists supported Prohibition out of genuine moral concern about the harmful effects of alcohol. Meanwhile, bootleggers backed it because it put money in their pockets. Housing policy in liberal cities is influenced by a similar implicit unholy alliance between well-meaning progressive voters and unscrupulous economic interest groups.
Hmmm, sounds like the case in New Haven with the liquor stores, does it not? Housing policy may be the best, most obvious example of the overzealous regulatory regime in “blue” cities, but it is not the only one. Small businesses, too, suffer from the same restrictive environment–and an environment in which the ability to play the system is arguably more important than the ability to do business well or ethically tilts the playing field not towards small business, but toward the giant chains that liberal voters tend to despise. A major corporation can hire a lawyer to swoop in and prepare a business application that will meet all of the relevant city codes in ways that a small business will never be able to.
So what’s going on? And why, among generally sophisticated and well-educated liberal voters, does the tendency to make such poor and anti-progressive choices about development and business policy still hang on? Analyses of the attitude of the urban Left toward development and business have typically focused on more recent iterations of liberalism–identity politics, anti-gentrification activism, and the like. But I’d like to trace the origins of the Left’s “urban problem” back a couple more decades, to a time simultaneously more visionary and more paranoid. The anti-gentrification Left of today is quite good at drawing media attention to itself (indeed, probably better at that than at most other things). But as someone who has lived in several of the liberal cities at question (New Haven, Chicago, NYC, Albany) there are two factors in the over-regulatory attitude that above all that stand out to me, and both can be traced to a different generation of liberal activists: the white liberal tendency towards controlling policy behaviors, and hangover from the period of white flight and urban renewal.
When we moved to Albany, I made a point of subscribing to the local neighborhood association listserv, so that I could see how homeowners (the NA is open to renters too, but most of the participants own) in an urban setting think. In general, the people on the listserv tend towards the professional-class and managerial, unsurprising in a part of Albany that re-populated with people from that general demographic after the Empire State Plaza brought more state office jobs into the immediate area. Whenever the question of a new business, or modification of an existing one, comes up, the listserv lights up with commentary, most of it taking the attitude of “we should tell the owners to do X, Y, and Z.” On the one hand, I admire citizens who are so willing to be involved in the affairs of their neighborhood. On the other, the most privileged members of the community throwing around their weight to tell local business what to do can be stifling to precisely the kind of spirit and innovation an urban neighborhood needs. Center Square and Hudson/Park are areas where people literally sit on their stoops to socialize; it could be right out of a Jane Jacobs textbook, had she written one. But the Neighborhood Association class seems to have missed the part of Jacobs (and so many other urban thinkers and observers) where she emphasized that the spontaneity of urban life is precisely what makes it special.
The legacy of urban renewal and white flight, too, has a role in the urban Left’s counterproductive support of the regulatory regime. Growing up in New Haven, and now living a block away from the marble edifice of the Empire State Plaza, the scars of this period have been ever-present in my life, as they are in the lives of many Blue City dwellers. When your physical environment constantly reminds you that your city is little cared for, and primarily designed for suburbanites to get into and out of quickly, is it any surprise that you may develop a mindset that has a hard time adjusting to a 21st-century reality where your city is growing again? The neighborhood associations that dominate white liberal middle class dialogue in many Blue Cities grew out of a period where no one–not government, and certainly not business–gave a shit about the communities that form in urban neighborhoods. They are, fundamentally, relics of a period where to be a middle-class urban liberal was to feel under siege. And they have thus had an extraordinarily difficult time adjusting to what should be their glory years–a time when the cultural narrative in the US has shifted to the opposite pole, from White Flight to The Triumph of the City. The urban left, then, clings to the things that gave it power 40 years ago after the era of freeway revolts and the end of urban renewal–legal protections from development, empowerment of the local community above all in business regulation, and just generally writing everything into law.
It’s really hard to give up power when you feel like it’s the only thing that’s been protecting your neighborhood for several decades. But now, those laws, regulations, and zoning decisions are counterproductive. Some (not all, but many) American cities are growing again. Young people want to live in the areas their parents or grandparents abandoned. And the urban Left, so accustomed to being suspicious of everyone and everything, is going to have to adapt.