Gas Stations, Food Trucks and DIY Districts (FTF II)

This series, Forward the Future, will intermittently consider the future of commercial activity within U.S. municipalities.

Our food choices are expanding, not only with the accelerating globalization of American food culture and dining choices, but new delivery platforms. While the classic fast food industry faces immense labor challenges, new entrants are presenting unprecedented opportunities for municipalities to create, revitalize or enhance community and economic development in local neighborhoods. Most prominent among these are gas station eateries and food trucks.

The Washington Post profiles the booming business of fresh gas station cuisines (Thai, Korean and Mexican instead of three-day old hot dogs and stale donuts):

“The Gorees invested thousands of dollars in the restaurant, instead of the hundreds of thousands it would have taken for a standalone place. They have no debt. The tables and chairs are from Ikea. They buy local food. The flowers on the tables are from the farmer’s market.”

The ‘new normal’  assumes many forms and foremost among them is the creative use of existing, under-utilized space. So-called “ugly” spaces, whether a run-down strip mall or a corner gas station, are being transformed not by major government development initiatives or big banking schemes but local elements. These local forces include both expansion-minded entrepreneurs and cost-conscious civil society elements, only the former of whom I will discuss today.

The most unproductive spaces of all within many municipalities are government mandated, free market abridging parking spaces. Most of these spaces exist because of maximal parking requirements that are a major drag on municipal productivity. They drive up construction costs, waste infrastructure taxes, harm the environment via impervious surface runoff and inflict many other ills well-documented by Donald Shoup in “The High Cost of Free Parking“. Recently, some of these spaces have been smartly used by food trucks.

Food trucks though face enormous regulatory hostility from local governments.

Even as their popularity has spread from major urban centers (SF, Portland, Boston) to smaller municipalities (Cary, Everett), the barriers to entry and stability have been almost uniformly erected by local governments. Bureaucratic inertia (rules written in the 1980’s), protectionist cartel mobilization (restauranteurs unreasonably view food trucks as existential threats), and complex, even conflicting regulations from different departments (Transportation, Public Health) continue to exact a heavy price from food truck operators. While they have organized and even crafted inventive solutions to common problems such as renting a private lot and offering transparent food safety assurances, their efforts in every city will only be successful if common citizens unite with uniquely qualified individuals and organizations such as the Institute for Justice to uphold free market principles and consumer choice.

Nevertheless, unless they are strangled in most locales by a noxious mix of government and incumbent businesses, food trucks are part of a changing work culture that meets an emerging market need.

“We’re knee-deep in the era of 15-minute lunch breaks and work days that extend far past our dinner times. The reality of ever-longer hours has cut across class lines. “

In the best case for a municipality’s development, food trucks and gas station eateries can even be a part of a DIY district, where inventive repurposing of existing space revitalizes under-performing areas of a municipality. A common thread of these larger projects is the removal of onerous government regulations, such as parking requirements and strict Euclidian zoning separation of land-uses, that greatly raise the cost of startups and impede synergies that develop from multiple combinations of “live-work-play-meet” market demands.

Most intriguingly for local or smaller businesses competing with their often subsidized competitors in national and regional chains, this is part of a longer trend since the Recession of what UNC  entrepreneurship professor Ted Zoller describes as:

“People, craving a genuine product, are turning to homegrown businesses and moving toward destinations that provide a sense of belonging to a community and the opportunity to be part of the scene…”

Spare Parts

Crony capitalism receives more prominent attention via the Atlantic’s October issue. Gregg Easterbrook takes aim at one of the grandest corporate thieves, the tax-free NFL and its legions of public welfare needy owners.

Considering the public fiascoes in Miami over the Marlins stadium, Minnesota’s nearly half a billion dollar gift to the Vikings and other continued flagrant violations of public interest, I will not hold my breath for any actual progress.

I do love this proposal though:

The NFL’s nonprofit status should be revoked. And lawmakers—ideally in Congress, to level the national playing field, as it were—should require that television images created in publicly funded sports facilities cannot be privatized. The devil would be in the details of any such action. But Congress regulates health care, airspace, and other far-more-complex aspects of contemporary life; it can crack the whip on the NFL.

If football images created in places funded by taxpayers became public domain, the league would respond by paying the true cost of future stadiums—while negotiating to repay construction subsidies already received. To do otherwise would mean the loss of billions in television-rights fees. Pro football would remain just as exciting and popular, but would no longer take advantage of average people.

The ‘next big thing’ obsession of municipalities and regions is often central to these public treasury abuses, as they seek the next big thing that can restore, revamp or just further entrench their status among counterparts in America and the world. Nor rarely can the ‘white elephant’ complex  be far behind as governments chase the highly improbable.

Not for the last time, may I add that civic spirit does not exist in modern America?

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Meanwhile in my new home of Raleigh, we have a classic one-sided “woe be the inner urban poor” story.

So it’s clear to Johnson and her neighbors that someone wants them out – their apartments knocked down and replaced by something more profitable.

The potential sale of 245 apartments for lower-income people has reignited long-simmering fears that downtown Raleigh’s rebirth will crowd out poorer neighbors to the south and east, swallowing up blocks suddenly turned valuable.

For most communities, the obsession by some on the Left for housing equality access taking precedence over infill development is terribly misplaced.

Raleigh’s struggles to overcome its own underutilized urban core are only intensified by these theatrics which accomplish little and undermine much.

Maximizing the productivity of core areas with excellent development potential is an act of social justice in itself, improving countless vital metrics across the board from tax revenues to public service provisions (transit, policing, schools). Concerns that people will be pushed out are valid but ultimately far less consequential than the benefits that accrue from that process.

The brutal truth is that we are in a time where the government (federal, state or local) does not have the means nor the will to subsidize people to live in prime urban real estate at a great discount and at the expense of long-term societal improvement via revitalizing downtown cores in suburbs, cities and towns.

The valid concerns about this process can be addressed by (not a conclusive list):

  • improving transit service (including adding more flexibility into the system) in suburban areas,
  • reforming discriminatory zoning codes in suburban areas that tilt multi-family development away from broad appeal and greater income accessibility,
  • revitalizing and in some cases creating new foundations of non-profit support of the working poor and the fixed-income elderly

Certainly, I have much more to say about this, especially regarding that above list. That is for another time…

Disassembled Watch I

The first in a continuing series of posts on America’s governments going broke or something close to it….

“Here’s a feature of Obamacare you probably don’t know about: A transfer of hundreds of billions of dollars in liabilities to retired public employees from state and local governments to federal taxpayers.”

Via Josh Barro, who is a ruthless critic of the GOP while brokering little tolerance for the stunts of Democrats, here is evidence of a serious backdoor bailout of irresponsible state and municipal governments. Federal taxpayers take the hit for this if its successfully implemented.

Why do I find this important?

Urbanist critics on the Right have scoffed at the prevailing narrative on recovering cities with some accuracy that cities have unique fiscal vulnerabilities related not only to badly managed public pension systems but overgenerous public sector retirement compensation. This represents nothing less than an absolute game-changer on that charge.

Workers were promised significant retirement health benefits that start upon retirement and transition into supplemental coverage after age 65. Very little of these benefits were pre-funded and their expense alone was enough to torpedo municipal budgets in the coming years.

With this policy, Pres. Obama has altered that ominous backdrop dramatically. Local and state governments can now transition public workers from these expensive plans to cheaper ones provided on the relevant ACA exchange. Recall these plans are subsidized by the government for all but the wealthy.

Hundreds of billions of dollars in liabilities disappear off municipal and state accounts within the next two to three years. Worse, the amount is far greater because local governments are among the biggest offenders of underfunding liabilities and unlike states, we have little research on how much exactly they owe.

If we accept the narrative that we are going broke, one way or another, for one set of reasons or another, this is a damning ‘nail in the coffin’.

Absolute transparency in municipal budgeting gains more urgency with this development. The money saved at the municipal or state level should be returned to the taxpayers who will inevitably pay higher federal taxes as the federal deficit increases.

Of course, if we believe that will happen….