Moratoriums have their place, but are easily misused

Retail

Moratoriums have their place, but are easily misused

by Dan Malouff • February 12, 2013 3:10 pm

Residents and leaders in the U Street area are now debating a proposal for a moratorium on liquor licenses. When is a moratorium, for liquor or otherwise, useful? When is it not?

Photo by sbluerock on Flickr.

Theoretically, local moratoriums on certain types of development can strengthen neighborhoods by encouraging a broader mix of uses. Unfortunately, they rarely actually work that way. More often, moratoriums become misused by opponents of growth in general, to try and slow or stop change.

The basic truth of moratoriums is that they don't usually stop things, but rather move them somewhere else. Banning bars on U Street doesn't eliminate demand for bars, it simply pushes any new supply to the next best location. Residential moratoriums, sometimes used in fast growing suburbs, are the same.

Any discussion of a local ban on any particular use needs to consider where that use is most appropriate. It's not enough to just say "I don't want more of X in my neighborhood." We have to plan where we do want that use, make sure it can happen there, and then plan what we want in the banned location instead.

Malls can use their control in ways neighborhoods can't

One of the advantages suburban malls have over urban neighborhoods is total control of the merchant mix. Mall owners know that it's important to have a wide variety of stores, so the best malls typically lease spaces to shops that will improve their mix, rather than those that will pay the highest rent.

When you're at a mall and Verizon has a big luxurious shop, but AT&T and T-Mobile only have little carts, it isn't because AT&T and T-Mobile can't afford to outbid that shoe store down the hall; it's because the mall owner will only lease out one big space to cell phone providers.

That isn't limiting the free market. On the contrary, it's taking a broad long term view of the market.

Urban neighborhoods usually can't be as selective, because every building has a unique owner. Mall owners are concerned about the overall profit of the entire mall, so they can turn down high leases on individual storefronts if they think it will pay off with a little more business everywhere else. But if you only own one individual storefront, you're going to maximize it with the highest-paying tenant you can find.

That sometimes results in neighborhoods with a bad mix of stores. We certainly see that in DC, where many of our retail strips have a glut of bank branches, cell phone stores, or pharmacies.

If used carefully, a moratorium can help level the playing field for urban neighborhoods with a lot of small land owners. That only works if the neighborhood is desirable enough to fill all its storefronts even with limits, and if the moratorium is more a way to promote something new rather than limit something old.

But moratoriums shouldn't be tossed around lightly. The key is to plan for what you do want and then make it happen. Moratoriums fail when they're used without a master plan guiding them towards a specific goal.

And sometimes, it's worth having a high ratio of certain things. For example, as a regionally-significant nightlife district, it's acceptable for U Street to have a lot of bars.

Cross-posted at BeyondDC.

31 comments

Tags: DC, liquor moratoriums, malls, retail, U Street

Dan Malouff is a professional transportation planner for the Arlington County Department of Transportation. He has a degree in Urban Planning from the University of Colorado, and lives a car-free lifestyle in Northwest Washington. His posts are his own opinions and do not represent the views of his employer in any way. He runs the blog BeyondDC and also contributes to the Washington Post Local Opinions blog.

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That isn't limiting the free market.

Yes it is. It is creating near-monopolies for financial gain.

by Jasper on Feb 12, 2013 3:28 pm • link • report

Moratoriums, or by their more economics term a price ceiling.

http://en.wikipedia.org/wiki/Price_ceiling

All you're going to do is make bars more expensive. Which may be what you want but it doesn't really change the neighborhood in the way that people want it to change.

Meanwhile if the city removed its bar moratoriums, instead of seeing every neighborhood into Adams-Morgan (I don't really see why that's a bad thing anyway) you'd see people going out more in their own neighborhoods (and you could allow more commercial property to be built which would have building owners more amenable to renting to non-restaurant uses since the risk is relatively lower). Adams-Morgan and U street is what you get when every other neighborhood fights to block any chance of people being able to get a drink elsewhere.

by drumz on Feb 12, 2013 3:39 pm • link • report

If there is such a demand for bars, why do they have to bunched together in de facto entertainment districts next to dense residential districts? Why not spread them out throughout the city to help anchor struggling commercial strips (Wonderland, Looking Glass Lounge, Red Derby, etc.)?

This isn't just about NIMBY's complaining about the character of the neighborhood after they move in - much of U Street/14th Street commercial revitalization came after the residential portion of the neighborhood was gentrified. While it's nice to be able to walk a few blocks to a bar, it is annoying to have the throngs of drunken visitors being loud and disruptive every weekend and even occasionally during the week.

A moratorium does seem extreme, but what other tools are in the toolbox to solve the problem? If its zoned for commercial, you can try and recruit other types of businesses, but you can't require it. When the areas bars are thriving from a lack of competition from other neighborhoods, it makes economic sense from a proprietor/landlord standpoint to create another bar, even if weakens the neighborhood during the daytime.

by Jeff on Feb 12, 2013 3:48 pm • link • report

@Jasper

No, Jaspy. A free market entity (the mall) deciding what stores it wants in its shop is literally a perfect example of a free market. That free market leading to a monopoly is a natural course of a free market. Which is why we regulate monopolies.

by Nick on Feb 12, 2013 3:56 pm • link • report

what are the advantages of bars being concentrated in an entertainment district?

What are the advantages to spreading them out?

Can the externalities associated with bars (including noise and misbehavior by bar patrons on their way out) be effectively regulated by policing? Is limiting the number and size of bars the best way to limit such externalities? How about increasing taxes to price the externalities?

If entertainment districts are desirable, where do they best belong? in what mix of commercial/residential, in places of what density?

If, as I suspect, the externalities are such that number and location should be regulated - and that there needs to be a mix of neighborhood bars and entertainment district bars - and the entertainment districts cannot be confined to primarily non-residential places - will neighborhood moratoria generate the distribution that is ideal for the whole jurisdiction?

by AWalkerInTheCity on Feb 12, 2013 4:07 pm • link • report

We have a 50% of each block face limit on 14th, 7th and U (Arts Overlay District). That was raised from 30% of total area immediately in an "Emergency" zoning session when 30% was reached. On 14th below U we're now dealing with the final spots to reach 50% just a year later. We're hoping we don't get hit with another declared emergency when it hits 50% to raise it more as we would like something besides all bars on 14th.

DC is hiring 50 new police half of whom will be assigned to the H Street NE bar area and half to patrol the U Street bar area where there have been numerous recent stabbings and shootings associated with the bars. There is a financial cost to all this.

In a rational situation there are trade-offs that could be made between the community and bar owners that would benefit both. But the extreme nastiness with which the pro-bar crowd attacks anyone wanting any discussion at all makes such a toxic environment that no rational discussion ever happens.

by Tom Coumaris on Feb 12, 2013 4:27 pm • link • report

"DC is hiring 50 new police half of whom will be assigned to the H Street NE bar area and half to patrol the U Street bar area where there have been numerous recent stabbings and shootings associated with the bars. "

I get the impression that crime has continued to be an issue in north capital hill/h street/trinidad in general. Is it really going to be 25 police to monitor about 3 blocks of bars there? With three shifts five days a week, thats at least 8 police.

by AWalkerInTheCity on Feb 12, 2013 4:35 pm • link • report

Not to mention the biggest moratorium of all: zoning.

So is their a neighborhood where a moratorium works more or less as intended?

by Drumz on Feb 12, 2013 4:38 pm • link • report

Btw I'm being serious, if there are good examples then let's hear about them.

by Drumz on Feb 12, 2013 4:49 pm • link • report

Except that's almost the exact opposite of what's actually happened in Adams Morgan. As a resident of Admo, I think that if I had to make a list of the strengths of the neighborhood, and why I chose to live here, the large concentration of crappy bars would probably rank pretty far down on the list. In fact, it would probably not even be a strength at all, but rather, a weakness.

by Scoot on Feb 12, 2013 4:49 pm • link • report

So is their a neighborhood where a moratorium works more or less as intended?

You'd need to be a bit more specific on what is meant by "intended". Liquor moratoriums have many goals. Different people support them for different reasons and what is seen as a success for some people is seen by others as a failure.

by Scoot on Feb 12, 2013 4:52 pm • link • report

@ Nick:A free market entity (the mall) deciding what stores it wants in its shop is literally a perfect example of a free market.

It all depends on what market you're looking at. It's perfect free market on the level of the Mall owner. On the level of shop owner/renter, it depends if you're in the monopoly. For the shopper, there is no free market [insert obligatory GGW-dig at cars] unless you use the freeways to go from one mall to another.

by Jasper on Feb 12, 2013 4:52 pm • link • report

Adams Morgan may have a concentration of crappy bars but it also has a (growing I might add) concentration of good restaurants that were attracted there because it is an activity center.

But if more neighborhoods want to follow the vacant storefront example of Cleveland Park I say have at it.

by MLD on Feb 12, 2013 4:54 pm • link • report

I'm a DC resident and I'm certainly not against all moratoria (that's a word right?). I see the benefit of limiting say excessive liquor stores or fast food restaurants within a certain radius that can outperform important community access when there is limited commercial space. There is a time and a place though. U Street isn't a sleepy residential neighbhorhood (nor has it really ever been traditionally) -- it's a nightlife center that thrives precisely because it represents a concentration of similar use but with distinct characteristics. Allowing these areas to develop in turn helps focus that kind of activity in certain places rather than spread into the quiet residential blocks.

by Alan B. on Feb 12, 2013 5:13 pm • link • report

Adams Morgan may have a concentration of crappy bars but it also has a (growing I might add) concentration of good restaurants that were attracted there because it is an activity center.

Like almost everything, it's quite a bit more complicated than that. Some restaurants thrived because of it, and some restaurants are thriving in spite of it. And the influx of new restaurants you referenced happens to overlap pretty perfectly with the moratorium. How do you explain that?

But if more neighborhoods want to follow the vacant storefront example of Cleveland Park I say have at it.

I'm not even going to touch this silly comment, except to say that Cleveland Park has no liquor moratorium.

by Scoot on Feb 12, 2013 5:18 pm • link • report

well, I do think that a moratorium, or percentage limit on restaurant/alcohol licenses can have a positive impact on the creation and/or maintenance of other retail, by putting a kind of brake on rents. Restaurants because compared to most retail they generate a lot more money per s.f., can pay (outbid) retailers, who make less money per s.f., for rent. Hence more restaurants, fewer retailers.

17th St. NW in the Dupont Circle area is one example of where a license moratorium on liquor licenses I think contributes to the maintenance of some, albeit not that many, retailers, including the hardware store.

That being said, U St. doesn't function wrt retail in the same way as 14th St. does, so maybe a moratorium wouldn't have the same effect.

----
wrt someone else's bringing up Cleveland Park, there the problem is more complicated. The asking price for rents is significantly higher than the value of the space for retail. Hence, empty spaces.

http://urbanplacesandspaces.blogspot.com/2009/09/cleveland-park-retail-my-off-hand.html

http://urbanplacesandspaces.blogspot.com/2009/09/commercial-retail-rents-2.html

by Richard Layman on Feb 12, 2013 5:29 pm • link • report

this too: http://urbanplacesandspaces.blogspot.com/2011/11/why-its-hard-to-holiday-shop-in-dcs.html

by Richard Layman on Feb 12, 2013 5:32 pm • link • report

@Walker-

From Chief Lanier's request for the new police:

""We have determined that when a new bar opens, city blocks with 10 or more ABRA establishments require four times the additional manpower than blocks with one to nine bars. There are 17 city blocks that currently have 10 or more ABRA locations. More notably, there are 10 additional city blocks that are within one or two new bars of reaching the 10-bar tipping point.""

http://www.popville.com/2012/12/mayor-gray-and-mpd-chief-cathy-lanier-calls-for-more-resources-due-to-dcs-economic-development-and-population-growth/

Mendelson's rationale for switching his vote :

""Mendelson said Lanier made a convincing argument that additional officers are needed in areas that are attracting growing numbers of partygoers, such as U Street in Northwest and H Street in Northeast.""

http://www.washingtonpost.com/blogs/dc-wire/post/mendelson-now-backs-grays-plan-for-more-police/2013/01/17/5bbe9732-60d2-11e2-b05a-605528f6b712_blog.html

Graham's rationale for supporting:

""D.C. Council member Jim Graham (D-Ward 1) said the shooting is a clear indication that the U Street area, which is packed with bars, restaurants, shops and residences, needs a bigger police presence.""

http://www.washingtonpost.com/blogs/crime-scene/post/three-shot-outside-u-street-nightclub-overnight/2012/12/03/fcb334fe-3d37-11e2-a2d9-822f58ac9fd5_blog.html

It would be nice to have a civil discussion about some way bars can help pay for the additional police required so there's not such a huge hidden subsidy of them by taxpayers.

@AdamB- Putting some sort of buffer between bars and residentially-zoned blocks should be a matter of discussion. It isn't. Where a commercial-zoned area abutts a residential-zoned area on a side street new bars are going in on the side street often sharing a wall with a residence. On residential side streets there should be a buffer of at least one building between a new bar and a residentially-zoned building, or at least a prohibition of an outdoor liquor area next to a residence. Of course people will say "they should have thought before moving next to a nightclub zone" but the fact is there are new liquor licenses going into such buildings that were formerly small commercial next to low-residential buildings. Discussing a minimal buffer isn't outrageous.

@MLD- There's a lot of difference between zero bars and 30%, 50%, or 100%.

I don't support the moritorium but I understand the frustration of people and it's shame it has to be all or nothing in this town. There are plenty of measures very beneficial to the liquor industry that could be bargained and traded (like 24-hour bars which I'd support in a trade). Or actually strictly enforcing a meaniful distinction between bars and restaurants and allowing unlimited restaurants.

But we never get to any discussion because there's this position that unlimited bars are a human right or a constitutional right and therefore discussion is forbidden.

by Tom Coumaris on Feb 12, 2013 5:59 pm • link • report

I meant work as in beig able to provide a diverse retail mix.

As to opinions on the quality of adams Morgan bars I not can the government really help you on that front.

But adams Morgan has a lot of retail and a lot of restaurants and bars. Mainly because it has lots of places where you an operate a business.

by Drumz on Feb 12, 2013 6:01 pm • link • report

I don't know about other pro-bar people but some of those sound reasonable. I don't know if I'd want the 24 hour thing because its choice I'm after not later hours.

by Drumz on Feb 12, 2013 6:27 pm • link • report

"From Chief Lanier's request for the new police:"

she said that was ONE example, and attributed the need to new development in general. She did not say, at least in the item in the link, that the bars on the bar intense part of H street alone required 25 new hires.

by AWalkerInTheCity on Feb 12, 2013 7:59 pm • link • report

The thing that really rubs me the wrong way with this is that the residents are asking for and supporting a moratorium. The majority of these residents are new and moved into the area knowing what it was about. If they didn't want to live in a rowdy area then they shouldn't have moved to one. I wouldn't move to Times Square and complain about there being too many lights.

by Dion on Feb 13, 2013 12:10 am • link • report

@ Dion

Many many residents are NOT supporting this moratorium request. 2B09 is planning to meet and discuss the moratorium, and possible alternatives. The size of this moratorium area is far too ambitious and would have unintended (or actually, entirely intended) consequences at the eastern and western ends of the area. There is also some question regarding the petition's representation of the bar density in the area. Read here: http://inmybackyarddc.wordpress.com/2013/02/07/bad-math-makes-for-poor-reporting/

And for transparency's sake, I am not a member or a supporter of In My Back Yard. I am a resident that is highly skeptical of any limiting of commercial activity that has been spearheaded by Ramon Estrada or his partner. This action is yet another example of someone "representing" me without ever speaking to me.

by CJ on Feb 13, 2013 9:27 am • link • report

"Vacant storefront examples of Cleveland Park".

Surely you jest. I can think of one, maybe two vacant storefronts on Connecticut from Porter to Macomb.

Please identify all these supposed vacant Cleveland Park store fronts

by CP on Feb 13, 2013 9:47 am • link • report

Dion,

There has been a literal doubling of bars in U street in the last 5 years. So yes, while the majority of residents are new, they aren't 0 to 4 years new. U street was residentially neawrly fully gentrified by 2008, there are a ton of well to do yuppies who moved there in the 1999 to 2008 range when there was 1/3rd of the number of bars there are there now.

There is a difference between wanting to live in a "vibrant" neighborhood and having the number of bars double or more in the short few years you have been living there.

by CP on Feb 13, 2013 9:51 am • link • report

As Chief Lanier noted, there seems to be a tipping point with regards to bars. Once you reach a certain critical mass, you get a lot of negative secondary effects. There's a pretty significant difference between a "vibrant" neighborhood (such as Glover Park around Wisconsin Avenue or Capitol Hill) and the mess that is Adams Morgan and, to a lesser extent, U Street during the weekend.

I can't really blame people in neighborhoods that are at or near the tipping point for supporting measures that would roll back or limit the drunken, potentially dangerous tide.

by Potowmack on Feb 13, 2013 10:12 am • link • report

Really? Because I think it's quite the opposite. Most of the residents opposing a moratorium are new to the area. Many new residents do not attend ANC meetings where moratoriums are floated.

by Scoot on Feb 13, 2013 10:49 am • link • report

"'But if more neighborhoods want to follow the vacant storefront example of Cleveland Park I say have at it.'

I'm not even going to touch this silly comment, except to say that Cleveland Park has no liquor moratorium."

And Cleveland Park has virtually noempty store fronts, either.

by Bob on Feb 13, 2013 11:11 am • link • report

Cleveland park has a cap on restuarants not liquor licenses per se.

http://greatergreaterwashington.org/post/16691/time-to-ditch-cleveland-parks-anti-restaurant-law/

by drumz on Feb 13, 2013 11:15 am • link • report

Why not just scale up the liquor license fees based on the number of other ABRA establishments within a 500 foot radius? Make the owners pay for their negative externalities.

by Phil on Feb 13, 2013 4:51 pm • link • report

It just isn't about moratoriums it is also about zoning. DC seems to like to put retail on the larger streets or bunched together. Zoning forces them in one area which then breeds others to come. Prices rise and many other types of establishments are priced out. Rinse and repeat with a new location. It used to only happen in Adams Morgan and G'town because that was one of the few places that had a concentration of places lots of people wanted to go to. Now that has moved to new neighborhoods. Capitol Hill (particularly 8th and H) had retail but not a huge concentration that drew people late into the night. In the early days of the rush to a new(is) area people were so grateful for the new food choices. No when it seems like 90% of the places on 8th are food/booze places, people want a few more options. When that bunch abuts a residential area it gets sticky - particularly if it really changes the atmosphere long-term dwellers are used to. Of course there are always locations with retail zoning that are in neighborhoods where they are the only one and the discussions revolving those are almost more apocalyptic.

by ET on Feb 15, 2013 1:27 pm • link • report