So I was reading my local Alexandria Times the other day, and saw this article, under the headline, “City business rules send heads spinning.”

The article explains how Old Town Alexandria’s onerous permit process and regulatory system puts a drain on small businesses, especially the small, independent outfits that give Old Town all of its charm.

Now I’m not particularly bothered by city ordinances that attempt to preserve or promote a neighborhood vibe or identity, particularly when the aim is to keep the quaint, historical atmosphere of a place like Old Town. Such regulations are about as local as you can get, in this case covering just a couple dozen or so city blocks.

But as the linked article illustrates, even on this parochial a level, zoning officials and regulators tend to overdo the regulating, then lapse into bureaucratic coma when local businesses try to navigate their way through City Hall. For example, if you want to do something as simple as change the lettering on or repaint the sign outside your business in Old Town, you both have to apply for and pay $50 to obtain a “ladder permit,” and apply for and pay $55 for a “building permit.” It can take more than two weeks to get the proper permits, even if all you want to do is replace the “e” on your “Ye Olde Sandwich Shoppe” sign.

While all of this is intended to promote architectural continuity and preserve Old Town’s historical charm, like most regulations it tends to promote the opposite of what city planners intended. Note this passage in the Times piece:

Many business owners have hired lawyers to help them with the city processes, but lawyers are expensive as Yi found out. “I certainly couldn’t afford to hire lawyers to go over and deal with it,” she said.

For Sandy Lewis, who recently opened Hank’s Oyster Bar on King Street, the lawyer route was worth it and the whole process took 45 days. “We had a really positive experience,” she said. The local lawyer she hired was “well worth it.”

Now, Hanks has been an institution in D.C. for some time, so it’s not surprising that the restaurant’s owners would have the money to hire a local lawyer to move them through the permit and zoning process.

I guess the question is, whether one ought to need to have a lawyer on retainer in order to open a business in Old Town. And if Old Town is going to make that a requirement–intentionally or not–what effect is that going to have on the boutiques, art galleries, and antique stores that make up the very atmosphere the regulations are trying to promote?

The answer I think lies in what’s happened to Old Town over the last 5-7 years. It’s been Gap-i-fied. The independent spots are closing down, and the chains are moving in. Old Town now has a Gap, a Chipotle, a Nine West, a Ross, a CVS, a Restoration Hardware, and various other chain spots. Parts of it are like a strip mall now, albeit as strip mall outfitted in Virginia red brick and quaint colonial architecture. Several years ago, a waterfront watering hole called the George Washington Tavern had to close its doors for good. The little pub operated in the same building where George Washington would have a pint when visiting from his Mt. Vernon estate, about 25 miles down the road. The place is now a Starbucks.

My hunch is that Old Town’s expensive, meticulous zoning laws have made it too difficult for the mom-and-pop places to do business. Anecdotally, I can say that I’ve several times seen an independent place get boarded over, only to be replaced by a franchise over ensuing months. Not difficult to see why. Franchise operators can often tap the resources of the parent company, particularly when it comes to accessing on-staff lawyers with experience navigating through and working with local zoning laws and business regulations.

The same people who gripe about how Wal-Mart is pushing smaller, independent places out of business tend to be the people who support onerous regulatory structures. What they tend not to understand is that regulatory burdens hit the smaller, independent places hardest, because they’re the places that have the smallest amount of discretionary cash to hire lawyers or a tighter budget and, therefore, a smaller margin of error when it comes to hassles like delaying an opening because some bureaucrat determined their signage is a couple of inches out of compliance.

This of course is true in the macro, too. People who push for federal regulations to rein in “big business” often don’t realize that the biggest of big businesses don’t mind heavy federal regs at all. They have the resources to comply with them–and tend to end up capturing the regulators, anyway. Big businesses know that a heavy regulatory burden is the best way to make sure small- and medium-sized businesses never rise up to challenge them.

This entry was posted on Tuesday, November 13th, 2007 at 8:29 am by admin and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.