The Corner Bar, Divernon IL - CC image from Randy von Liski

A few booze-related items I thought I’d comment on:

The Hill is Home takes note of ANC 6B‘s seemingly preferred method to avoid “Adams Morganization” – a moratorium on all new liquor licenses.  Nevermind that the trigger for this fear of Adams Morgan is Moby Dick House of Kebob – which makes me think those leveling this barb have neither visited Adams Morgan recently nor dined at Moby Dick.

Matt Yglesias notes that such efforts to control liquor licenses is fighting the natural tendencies urban economics, where things like to cluster.  That’s what cities are, after all – clusters and agglomerations of people, firms, skills, capital, etc.  Yglesias makes a great point about the appropriate scale of governance of these issues.  While small, local groups (such as an ANC) might be affected by a new bar or restaurant, the practice of giving them veto power over things like liquor licenses has some severe implications:

The bigger question here is about levels of governance. Insofar as you empower residents of my building in DC to make the decision, we will attempt to regulate the food service establishments on our block so as to minimize late-night noise. After all, the service sector jobs lost in the process aren’t the jobs that we do while as homeowners we bear the losses of reduced property values on the block. And to simply disempower us, as a block, would be arbitrary and unfair. But empowering each and every block leads to highly inefficient outcomes with the bulk of the pain felt by low-income people and there’s no obvious reason of justice to think this kind of hyper-local empowerment is more legitimate than taking a broader view would be.

Ryan Avent adds on, noting that these kinds of restrictions and inefficiencies lead to poor outcomes for consumers:

That’s largely because it’s very difficult to open new bars. And the result is a pernicious feedback loop. With too few bars around, most good bars are typically crowded. This crowdedness alienates neighbors, and it also has a selecting effect on the types of people who choose to go to bars — those interested in a loud, rowdy environment, who will often tend to be loud and rowdy. This alienates neighbors even more, leading to tighter restrictions still and exacerbating the problem.

Sadly, this is the kind of dynamic that’s very difficult to change. No city council will pass the let-one-thousand-bars-bloom act, and neighbors can legitimately complain of any individual liquor license approval that it may lead to some crowded, noisy nights. It’s interesting how often these multiple equilibrium situations turn up in urban economics. In general, they seem to cry out for institutional innovation.

Avent specifically laments DC’s lack of the ol’ neighborhood corner bar.  Having been born and raised in the boozy midwest, where the small, corner bar is an institution and people drink alcohol the way others drink water, I miss the corner bars, which aren’t as common as they could be in the District.

One of the problems is in the tools used to limit these licenses.  As Avent and Yglesias note, the kinds of tools bandied about by ANCs lead to an inefficient marketplace.  Instead of preventing Adams Morgan, something like a moratorium ends up ensuring a slippery slope towards “Adams Morganization” rather than preventing one.

On the broader issue of retail mix (ANC 6B’s stated reason to oppose new liquor licenses), the December issue of the Hill Rag had two contrasting pieces on the issue of retail on Barrack’s Row.  The first discusses potential options – none of which seem palatable for actually encouraging retail.  Regarding a moratorium, the impact is exactly what Avent describes:

One problem he cites is that it seems to be “too easy to become a bar or pub once you have the license.” So, even if there is a moratorium on new licenses, there is always the chance that existing licenses can morph from restaurants, which most neighborhoods don’t mind, to bars that operate later and attract different customers.

Another suggested tool is a zoning overlay district, but such a tool is a mismatch between the stated problem and solution.  Zoning is best used to regulate the physical form and the use of buildings, broadly defined.  Zoning can separate a retail use from a residential one, or an office use from light industry – but it is not an adept tool to parse out specific kinds of retail, or in differentiating between Moby Dick and Chateau Animeaux. The issue of bars and liquor licenses is more an issue of how those physical spaces are programmed.  Zoning is not a good tool to control these kinds of issues, and these types of regulations often backfire.

Refreshingly, another article in the issue (about parking, no less) from Sharon Bosworth of Barracks Row Main Street gets at the real reason 8th St SE is more favorable to bars and restaurants instead of retail:

By mid 2009, The Wander Group, consultants who make saving America’s historic corridors their specialty, reported back to BRMS: our commercial corridor, specified by none other than Pierre L’Enfant in 1791, is today uniquely suited to businesses requiring small square footage because of the antique proportions of our buildings which are well protected in the Capitol Hill Historic District. Restaurants require small square footage and restaurant owners would always be on the hunt for charming, historic sites. Wander Group predicted more restaurateurs would find us, and so they did. Our tiny buildings are difficult (but not impossible) for most retail footprints, yet they work perfectly for restaurants.

In addition to those challenges, there’s the broader issues facing retail – online competition, fighting against the economies of scale for big box and chain retailers, etc.

Instead, we have an industry that works well in an urban setting and wants to cluster here.  Here’s one vote in favor of more corner bars.