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"Business that compete imperfectly, congregate. That's not a bad thing, in and of itself, but if a given population decides that it's not what they want, they have every right to influence the free market forces that cause the aggregation."

I agree with this completely, even though I'm strongly opposed to these types of regulations. If the goal of the regulation is to discourage the development of the dense clusters of restaurants or retail, then I think these regulations are a good solution.

But proponents of these regulations should understand that the cost of regulating a more uniform distribution of businesses will be that there will be fewer businesses over all. For example, imagine that Georgetown decided that it had too much retail, and told half of their retail shops that they had to relocate. Some of them would relocate somewhere else, but many of the shops would just shut down, because they wouldn't be viable without the foot-traffic that all the other stores generate.

So while these regulations can prevent the formation of clusters, and even probably ensure that each neighborhood has at least 1 restaurant, it will be achieved at a cost of having fewer and worse overall options in the city.

by Aguirre on Apr 29, 2009 6:16 pm • link • report