Bureaucrats Ruining Your Dinner

By Matthew Yglesias

Reading Kriston’s musings on the 14th Street corridor it occurs to me to point out that the relatively un-vibrant neighborhood going-out scene in DC is, in part, a deliberate public policy measure. For example, Kriston is surprised by how cheap retail space continues to be on 14th:

A couple things jump out in Black’s survey. One fact unknown to me is that it is still relatively cheap to develop space along 14th: $21 to $45 per square foot, compared to about $60 per square foot in Dupont Circle, according to the reporter. I would have guessed much, much higher. The corridor still has several abandoned storefronts, and even a few larger warehouse-style spaces remain from its prior heyday as the District’s Auto Row. Those warehouses are available elsewhere in the city, but nowhere so safe and walkable and condo accessible.

What you’re seeing here is, in part, the result of something called the Uptown ARTS Overlay District. This district is comprised of 14th street from P Street up to U Street, then U Street from 14th over to 7th Street, and then 7th Street from U down a few blocks south. One of the rules governing this provision of our zoning code is that only 25 percent of the street frontage in the district, as measured in linear feet, can be occupied by restaurants. And we’re up at that limit.

That doesn’t actually mean that no new restaurants can open. But it does mean that opening a new restaurant is a big hassle and requires political juice. This is, however, clearly an area that “wants” to be full of bars and restaurants. And if we lifted the cap, the combination of vacant spaces and relatively cheap rents would surely cause more-and-more spaces to fill in. The resulting environment would be highly competitive and only places that some substantial number of people really liked could stay in business. Instead, we have a structural restaurant shortage in the area which lets good places charge very high prices and lets desperately mediocre places stay in business just based on the fact that you can reliably walk in and get a table.

And the ARTS Overlay isn’t unique. Currently, both Adams-Morgan and the strip of 17th street near Dupont Circle have rules in place that make it impossible for a new establishment to get a liquor license.

Lurking in the background of all this is a belief in the part of District policymakers that too many restaurants is actually an undesirable scenario. The view is that an urban retail environment is tilted toward bar/restaurant uses and that bars and restaurants thus “crowd out” other kinds of neighborhood-serving retail unless you erect regulatory to overrestauranting. I think this line of analysis is deeply confused. Among other things, I think it involves overestimating how many restaurants would likely exist in a more open regulatory framework. It misses, for example, the fact that in a more competitive environment incumbent businesses would be more likely to go out of business.

But whether you like the policy or not, it’s definitely the policy. By contrast, there’s no policy in place aimed at reducing the quantity of restaurants in the downtown office district. Consequently, DC has fine dining options in the central business district that easily hold their own compared to any in a comparable American city (recall that the DC metro area’s population is about the same as Atlanta’s and about a quarter the size of New York’s while DC proper has about the same population as Milwaukee). But in terms of neighborhood restaurants, things are not so great. If we didn’t have anti-restaurant rules in our main going-out hotspots, competition would let things improve.

3 responses to “Bureaucrats Ruining Your Dinner

  1. As a resident of the affected district, restaurant enthusiast, and economics dabbler, I couldn’t be more passionate in my agreement with this post. Do you know of any organized movement to repeal the relevant regulations? Or even prominent critics (other than Matt)?

  2. Pingback: But Where Are the Microbrews? « The Internet Food Association

  3. Bulging Bracket

    Maybe after another century or so of exposure to the actual effects of your political beliefs you might start to question that whole left-liberal thing. But there’s still tons of apologists for communism (drawing on Rawls, and lots in the current administration) so no one should get their hopes up.

    You really need to read more Virginia Postrel and get over your infatuation with ordering people around. Zoning regulations are of course horrible, and as you note are agents of corruption. As always, the government that governs best is that which governs least. But y’all want to put the government in control of ever more (healthcare even, and food at a microscopic detail)… What does one expect from a philosopher though?

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