Chain of Fools?

We have already commented on the efforts of the LA City Council to restrict fast food restaurants in some parts of its city. Now, the DMI weigh in with a more detailed look at how zoning is/can be used to create a more desirable retail environment: "Cities have always used regulations and zoning ordinances to control the number and type of businesses in their communities. These laws usually aim to reduce the impact of more “undesirable” establishments on neighborhoods. Cities regularly limit how close liquor stores may be to schools and churches while zoning laws banish adult video stores to the fringes of the city."

Given the fact that, according to numerous press reports, chain stores are squeezing out local businesses, does it make sense to zone them out? Here's the DMI take: "The San Francisco Board of Supervisors thinks so. In 2004, San Francisco passed an ordinance to ban chain stores, or what the law called “formula retail”, from certain neighborhoods. In neighborhoods where chain stores aren’t banned outright, proposed new chain stores must go through a review process with public hearings. The Planning Commission gets the final say, weighing whether a store fits in with a neighborhood’s character. The anti-chain store measures are contentious among San Franciscans, especially those wishing to purchase a can of paint."

And the reason why it might make sense is the fact that, according to Stacy Mitchell and the Institute for Local Self Reliance, local stores contribute more to a city's economy than do chains or box stores. Here's the DMI on this issue: "Studies have found that local businesses contribute more of their profits back into the local economy than national chains. A study of Austin small-businesses found that for every $100 in sales, local businesses pump $30 back into the local economy, whereas national chains only spent $9 locally."

The attempt to limit chain store proliferation will not be easy: "It is true, many people simply prefer chain stores. Prices at large retailers are generally lower (though I can get some good deals at my local 99¢ store). The merchandise is arranged attractively and the aisles are wide. You can purchase all kinds of different goods at large retailers, from milk to DVD’s to a coffee table."

That being said, the diversity and the vibrancy of city neighborhoods can be the ultimate culprit of the proliferation: "The result is the dying-out of small neighborhood businesses, both because they lose sales to price-cutting national retailers, but also because landlords can ask for more rent from large chains. New York Councilmember Gail Brewer commented of the process, “It destroys neighborhoods; it destroys families.” Another result is a bland landscape of endless blocks filled with stores no different than those in any other city, suburb, exurb, or rural town center."

DMI also links to a NY Times story on the metastasizing of bank branches (and just a few short years ago we were all agog over redlining). Between the banks and the drug stores, there's no room for independents; not to mention local supermarkets unable to compete with the ability of the chains to pay higher rents. Clearly, there's a big problem here that needs to be addressed; something that the current mayor is won't to do.