Main Street Preservation Aims Harm Economy

This article from Reason looks at a regulatory system in Alexandria, Virginia, that seeks to maintain the city's historic Old Town neighborhood. But is the regulation burdening local businesses owners to the point of hurting the economy?

"Old Town Alexandria is an historic, charming stretch of city just outside of Washington D.C. that features lots of shops, restaurants, parks, cobblestone streets, and a waterfront teeming with American history. George Washington was a regular in Old Town, as was a young Robert E. Lee."

"The Alexandria Times article explained how Old Town Alexandria's onerous permit process and regulatory system have put a strain on small businesses, especially the small, independent outfits that give Old Town all of its charm. I'm fairly anti-regulation, but even I don't have too much of a problem with city ordinances that attempt to preserve unique neighborhoods with a distinct vibe or identity, particularly when the aim is to keep the quaint, historical atmosphere of a place like Old Town. These sorts of regulations are about as localized as you can get, in this case covering just a couple dozen or so city blocks."

"But as the article in the Alexandria Times illustrates, even on this parochial of a level, zoning officials and regulators still tend to overdo it with the regulating, then lapse into bureaucratic coma when local businesses have to navigate their way through the mess of red tape."

Full Story: The Death of Main Street



Preservation vs Mammon

Sounds like the biness owners aren't flexible enough to adapt to that local market. The genius of capitalism is that the weak businesses fail.



Insufficient Analysis

I agree with what you have stated Dano, but I think you have shortchanged the point of the article. His point was that local regulations hurt the little guy a lot more than the big guy and thus, you essentially have a "government failure". Then, when all the local mom and pops go out of business, the same local politicians cry foul against bigger retailers like Walmart and other box retailers. They sometimes then proceed to make regulations restricting big box development to counter their previous regulations which served to squeeze the little guys in the first place.

Bob Toll once said that local governments have created an oligopoly in housing development which benefitted him and governments didn't even realize it. To a lesser degree, the same is true here. The more expensive you make it to operate businesses, the little guys get hurt disproportionately because the reg costs are a bigger percentage of their fixed costs. Some of this phenomenon is market-driven, but much of it is also government driven and that is what's being discussed in this article.

Business and preservation.

Fair point CP.

I think what should be added to this is that I'm not a hysterical preservationist, but also that certain historic buildings can add civic/social value that isn't directly monetizeable but adds to QOL or liveability or whatever. Who pays for the small owner's pain for community's gain? Dunno.



it's not as simple as that

I actually think that the discussion that resulted from this article (found here is more useful than the article itself. It came out of the discussion that you can't just say "all government regulation is bad," but rather some regulations are bad or worse than others.

Specifically, there seemed to be agreement that expensive and frequent permit requirements tend to discourage new small businesses, but extensive and specific aesthetic and material regulation can actually encourage businesses because they create an attractive environment to do business and ensures that the aesthetic improvements of one store won't be overshadowed by a shoddy neighbor.

Certainly, I've seen that to be true here in Minnesota, where Grand Avenue is thriving due to a very high bar set on what types of businesses may locate there, and the materials and appearance of their building. Grand, however, does not have particularly onerous permit requirements (although, as usual, they could stand some reduction or at least clarification).

I would say the biggest weakness of the article is that it only focuses on one district in one city, and doesn't have the breadth of examples needed for a truly convincing argument.

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