Written comments to Alcoholic Beverage Control Board regarding the proposed liquor license moratorium

A copy of the below comments were submitted to the ABC Board earlier today:

 

 

Dear Members of the Board,

I am the founder of In My Backyard – DC, a group of DC residents committed to a more liveable and affordable District. We currently have more than 600 members.

We ask that you reject the liquor license moratorium petition in its entirety.

The moratorium petition should be rejected for three reasons:

1. The petition itself is inaccurate and unreliable.

2. Residents within the proposed moratorium zone are overwhelmingly opposed.

3. A liquor license moratorium would not be appropriate as outlined in the DC Code.

First, nearly everything about the liquor license moratorium petition prepared by the Shaw Dupont-Citizens Alliance (SDCA) is inaccurate.

The petition claims that the proposed moratorium zone had 107 liquor licenses at time of filing. According to the order on moratorium petition you published, there are in fact 80 liquor licenses within the proposed moratorium zone.

The SDCA then claims that the proposed moratorium zone also has the highest concentration of liquor licenses in the District. This is not even close to the truth. The liquor license concentration in the Adams Morgan moratorium zone is 75% higher.  The Dupont West moratorium zone concentration is 114% higher. The Dupont East moratorium zone concentration is a whopping 271% higher. This means the proposed moratorium zone, because it is nine times larger than the Dupont East zone, would need add an additional 217 liquor licenses to reach the same concentration.

The petition also claims that liquor licenses have caused a crime problem in the U Street area. This is also demonstrably false. Since 2000, crimes–violent and property–have dropped precipitously as more and more liquor licenses have been issued. See graphic here: http://bit.ly/imbycrimemap. Note that SDCA did not submit any kind of proof to support their assertions.

The petition paints a picture of the U Street area that is simply inaccurate. While it may have some problems with code enforcement, the U Street neighborhood is a pleasant and vibrant part of town that people from all over the country flock to visit and live permanently. Liquor licenses have been key to that success. With so many glaring errors in arguments that are central to the petition, it would be a mistake to use it as a basis for policy making.

Second, it is completely clear that the residents of the proposed moratorium zone are overwhelmingly opposed to the moratorium zone.

At the multi-ANC listening meeting session more than 85% of the 58 residents who spoke opposed the moratorium. A large portion of speakers in support of the proposal were SDCA board members. The opposition was so overwhelming that every single ANC affected by the proposal voted to reject the moratorium.

More than 1,200 District residents have signed a petition to reject the moratorium petition.

More than 600 District residents joined my group, In My Back Yard – DC, primarily to oppose the moratorium petition.

The Shaw Dupont Citizens Alliance, in contrast, only accepts members from a two by four block rectangle, which represents only 19% of the proposed moratorium zone. Within that small zone, only a handful of residents have signed on to SDCA’s agenda.

Third, the moratorium would be inappropriate based on the standards laid out in the DC Code. The petition claims that a moratorium would be appropriate because of the effect of additional liquor licenses would have on 1) peace, order, and quiet, including the noise and litter provisions; and 2) residential parking needs and vehicular and pedestrian safety.

A liquor license moratorium would not have a beneficial effect on peace, order and quiet. Rather, a moratorium would simultaneously insulate liquor licensed establishments from competition and give them an extremely valuable asset: a transferable liquor license they can sell for tens of thousands of dollars. If it is the case that certain establishments are causing problems, a moratorium would reward rather than punish them.

A moratorium would also stop the competitive process that leads to new establishments that better serve the community and improve peace, order, and quiet. A cap on liquor licenses in the area would make it profitable for businesses to move towards a high-volume, low-service model that would negatively impact peace, order, and quiet.

While SDCA brings out a long list of alleged problems, nearly all of them are violations of existing regulations (overserving customers, zoning violations) or completely asinine (selling pizza, happy hours, etc). None of the real problems would be addressed by a moratorium, and other complaints are inappropriate for the ABC Board to address.

Likewise, a moratorium would not be an appropriate tool to address parking in the proposed moratorium zone. The U Street corridor is one of the best neighborhoods for public transportation. Along with the Metro station, the proposed moratorium zone straddles several major bus lines. Regarding taxis, it is also one of the best-served neighborhoods in the entire District. The moratorium zone is also extremely dense, which allows many people to walk to liquor-licensed establishments.

A moratorium would exacerbate parking problems, as well. A cap on liquor licenses may allow current license-holders to simply increase the volume of their sales and attract greater traffic in already impacted areas, rather than spreading out new establishments throughout the proposed moratorium zone.

The petition, when trying to prove that a moratorium would be appropriate to deal with residential parking issues, complains about taxis, WMATA, and valet service. However, these are all examples of services that make the parking situation in the proposed moratorium zone significantly better. If there is a case to be made for restricting liquor licenses on the basis of residential parking, vehicular or pedestrian safety, the petition fails to make it.

The Shaw-Dupont Citizens Alliance has presented the Board with an inaccurate, misleading, and deeply confused petition for the creation of a new moratorium zone, and have submitted no evidence to support their proposal. The petition asks the Board to go against the wishes of the residents in the affected areas, and to stifle the growth of the District for dubious benefits. Most importantly, the petition utterly fails to demonstrate that a moratorium would be appropriate under any of the standards set forth in the DC Code.

On behalf of the 600+ In My Backyard – DC members, I ask that you reject the moratorium in its entirety.

Sincerely,

Michael Hamilton
Founder, IMBYdc

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Food truck regulations are a textbook example of rent-seeking

The Restaurant Association of Metropolitan Washington (RAMW) has been noticeably quiet on food truck issues, at least in public channels, since the DC Department of Consumer and Regulatory affairs released its latest round of proposed regulations in March, and for good reason [Note: I detailed my opposition here]. Regulation proponents have been on the defensive lately because their favored policies are extremely unpopular. Of the 223 comments submitted to DCRA regarding the latest proposed regulations, only six–less than 3%–were supportive. Even the Washington Post editorial board wrote that the regulations should be rejected by the City Council.

On Friday afternoon, RAMW decided to go on the offensive, and sent out an email blast. In it, a RAMW staffer wrote that the map released by the Food Truck Association of Metropolitan Washington (FTA), which details where food trucks would be allowed to vend under the proposed regulations, is a fraud. On a laughable note, they also wrote that the proposed regulations are definitely “not a ‘plot’ dreamed up by restaurant operators to stifle competition.” (Does this remind anyone else of a certain Twitter account?) It also stated that the FTA previously supported a lottery to assign food trucks to specific locations, which is demonstrably false.

This email puts lobbying group in the awkward position of pretending to be a disinterested public service organization while simultaneously begging the government to put its members’ competitors out of business.

The letter raises two important questions:

1) Why is RAMW involved in the food truck rulemaking process to begin with? 

RAMW is engaged in a textbook example of rent-seeking, the process of interest groups lobbying for favorable regulations that either take money from competitors/consumers or stop them from competing at all. Specifically, RAMW wants regulations that eliminate food trucks from most of the city, while allowing a small handful to operate where they are currently most popular. Under the new regulatory regime, at least some of the former food truck customers would instead spend money at RAMW member restaurants. It’s common to see RAMW use high-minded language about protecting public space when discussing food truck regulations, but it would be naïve to take them at their word.

Perhaps I’m being cynical, but RAMW President Lynne Breaux actually wrote that stopping competition is her goal. In a 2010 comment submitted to the DCRA, she wrote “the positives of [food trucks], however, must be balanced against the needs and interests of the District’s business locations,” demonstrating quite clearly that RAMW is looking out for their members’ profits rather than consumer well-being.

Does RAMW expect us to believe that the money it collects from members to lobby on their behalf has instead been diverted to unrelated work on public space preservation?

2) What regulations has RAMW actually lobbied for?

After DCRA proposes new regulations, it allows for public comments to be submitted, which it then displays on its website and sometimes uses when making later revisions. RAMW has participated in this process, and their comments give us a chance to see what their ideal regulatory framework would look like.

It’s not pretty.

In late 2012, RAMW asked DCRA to assign a small number of food trucks to a few specific locations in the Central Business District (i.e. nearly everywhere south of Massachusetts Avenue NW), and then ban all trucks who don’t win one of the few assigned parking spots. Lo and behold, that’s basically what DCRA included in their next revision of the proposed regulations.

One of the main benefits of food trucks is that they cluster and provide customers with several convenient options in one place. Previously proposed regulations set a minimum of three food trucks per location downtown, but RAMW instead would like to set a three-truck maximum.  RAMW also asked that any trucks outside of the Central Business District not be allowed to sell food if they are within 10 feet of a business, 20 feet of another food truck, or on a block with two other trucks.

If this is starting to sound familiar, take a second look at the FTA map that RAMW called a ‘fraud.’

RAMW also proposed a ban on food truck sales after midnight and a ban on music played by trucks. Trucks would also be banned from throwing away their own trash, and must contract with a third party to do so. Any food truck vendors caught in contravention of these regulations would owe $500 for the first offense, which would  then escalate with every  subsequent infraction. In sum, RAMW proposes a world in which your lunch choices are extremely limited for the benefit of downtown restaurants (you can read the rest of their many other recommendations here).

It’s DCRA’s job to protect consumers, not the restaurant industry. When it comes to food trucks, RAMW is in direct conflict with the interest of consumers. Not only are there other, serious problems with the proposed regulations, but it’s not even clear what problem regulators are trying to address.

Food trucks are extremely popular in the District because they meet the needs of hungry workers. Free entry into the market and free movement within the District means more choice, and more competition. That is good news for consumers, but bad news for RAMW.