Job-Killing Liquor License Bans

A blog about business and economics.
Jan. 22 2013 10:48 AM

Job-Killing Liquor License Bans

The fact that commercial real estate markets don't clear is something we've discussed here a number of times, and in addition to cyclical non-clearing during recessions the presence of vacant storefronts as a structural matter is striking feature of the urban landscape. One leading reason, it seems to me, is things like the busybody groups pushing a liquor license moratorium in my new neighborhood.

Different pieces of real estate have different things that they "want" to be. Spaces in walkable urban neighborhoods well-served by mass transit and taxis, but removed from the central business district, really "want" to be bars and restaurants. Cities are full of the kind of people who go out to bars and restaurants, the ability to get home safely after getting drunk is a key attraction of walkable transit-served neighborhoods, and the spaces are often unsuitable to other business purposes. You can't put a Home Depot in a small storefront. In general, the large national chains who dominate the retail landscape are going to be skeptical of irregularly shaped parcels in historic structures. Traditional retail has taken a hammer-blow from the rise of Amazon and online ordering. In suburban jurisdictions, strip mall storefronts are increasingly occupied by health care providers but there's less need for that in urban areas since they're already the location of major hospitals and concentrated clinics.

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People sometimes seem to have this fantasy that if they reject enough liquor license applications they're going to magically recreate a 1950s local retail ecology out of The Death and Life of Great American Cities but you can't actually do that without reverting to 1950s technology and demographics. Nobody's giving up Amazon, and nobody's giving up their ability to take a Zipcar out to Ikea. What you get are empty storefronts, lower tax revenue, and fewer employment opportunities.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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