Don't ban big-box retail

On October 24, the Planning Commission will consider the proposed "big-box" ordinance.  This ordinance will require all new big-box retail stores (over 50,000 sq. ft.) to get a conditional use permit.  The permit application will require an "economic impact" statement and notification of surrounding neighbors and NAs.  In other words, it's a ban.

This has nothing to do with aesthetics.  The new commercial design standards are supposed to protect us from big ugly boxes.  This ordinance aims to "protect" us from their economic impact.

Local merchants pushed the City to commission a study of big-box retail back in 2004.  I think it's pretty shoddy; no serious study would rely so heavily on clippings from Shopping Center World and BusinessWeek.  Surprisingly, though, the authors didn't follow script.  They found that big-box stores save consumers money; that they do not directly compete with local merchants; that their supposedly negative impact on wages can be addressed only at the national level; and that their other externalities can be eliminated through design standards. 

Upset over this conclusion, the locals asked two UT professors (neither an economist) and a Houston consultant for a do over.  These authors found -- surprise! -- that big-box retail has a net negative economic impact.  They avoided the mistakes of the previous study by holding down citations to supporting studies and data.

I assume that the Planning Commission is being asked to take the second study at face value since the original study did not recommend conditional use permits. 

It'll come as no surprise, but I oppose this ordinance.  Some of the reasons, in no particular order:   

1. It will just encourage big-box retail to move to the suburbs; the suburbs will capture that sales tax revenue.  We'll be stuck with many of the same externalities.  Traffic may even get worse as more people drive out to the 'burbs to do their shopping. 
2. Some big-box chains will simply adapt to the ordinance. (Wal-Mart's already working on a 99,000 sq. ft prototype because of similar ordinances passed by other "progressive" cities.)
3. It's regressive.  Consumers who shop by price (generally the lower income) will have to drive for lower prices or pay higher local prices.  Consumers more interested in variety, better-quality goods, or better-quality service (generally the higher income consumers) will continue to shop as before.
4. It'll be less convenient.  These hyper-markets are big time savers for harried two-wage-earner couples. 
5. We all benefit when local shops are forced to compete with the big chains.  Since they can't compete on price, they must offer more variety, better quality or better service.
6. There probably are enough big-box stores in Austin already to do whatever damage they're going to do.

This isn't a separate reason, but no one asks what costs independent local stores impose.  A Sam's Club is a grocery, pharmacy, photo lab, nursery, electronics store, tire store, clothing store, book store, music store, snack shop, and probably a bunch more all rolled into one.  What's the cost of requiring consumers to make separate car trips to eight or nine independent shops?

I have nothing against locally-owned businesses.  I shop at locally owned businesses.  I think locally owned shops often offer more than the national chains.  I just don't think the City should run a protection racket for them.

Here's the link to the Planning Commission for those who are interested.

P.S. (October 24, 2006) Staff has recommended against requiring economic impact statements, according to the ordinance review sheet, and the draft ordinance does not require them.

Comments

[M1EK]

I hate big boxes - for being such an obstruction to pedestrian, cycling, and transit modes of travel. If Target can build an "urban Target", these other guys should be able to as well - which means we don't prohibit stores by square feet, but we stop allowing this abhorrent frontage road sprawl as well.

This is one case where McCracken has done some good. Get standards in place for block length, access, breaking up superblocks, etc.; and this is no longer an issue - when I lived in Clarksville, I eagerly awaited the urban Target which was originally slated for the Whole Foods spot. Because, and I can't emphasize this enough, it wouldn't have been so pedestrian-hostile as to allow only fools and bums to actually walk there.

[Jim Howard]

Great post. Banning large stores is the act of elitists.

If the concern if that stores should be pedestrian friendly, then fine, require sidewalks.

Keep in mind that not everyone can walk long distances.

But don't ban them because you can afford to pay more at your boutique shops. Not everyone can.

[M1EK]

Jim,

It's far better for an 80 year old to walk 1/4 of a mile to a neighborhood 'big box', let's say, than it is for the same person to drive, because there's no way for them to walk (or the big box made it so unappealing as to not be a realistic option). Like the 1/2 mile trek through swampy grass I took on Tuesday to/from my car dealer, for instance.

The current regime of subsidies and zoning basically forces the elderly to either continue to drive or give up any sort of life. That's much worse than expecting them to walk a ways.

[AC]

M1EK, as I read your original post, your complaints are generally about land-use issues. I think the new design standards address these complaints. (This is consistent with your first comment, I think.)

The proponents of this ordinance want to throw up hurdles to large stores regardless of how sensitive they are to land-use and design issues. You should read the second study linked above if you haven't already. It proposed defining "big box" to include "category killers" like Toys-R-Us, Borders, Best Buy, etc. It even suggested a 5,000 square-foot eyeglass store might qualify. The 50,000 square foot threshold is doubtless intended to sweep in some of these. (The original study defined "big box" retail to be anything over 100,000 square feet.)

There's a big, big difference between a city promoting an urban, walkable environment, and engaging in economic protectionism for local merchants. Just so everyone's perfectly clear, my post is only about the latter. That's becaus the big-box ordinance is only about the latter.

[M1EK]

Chris,

Yes, I get the difference; I was concerned others might not. To me, we ought to welcome big stores if they're willing to locate in areas that can support them and provide superb pedestrian/bike/transit access. Otherwise - we're a big enough city that we ought to say "no thanks". Big box centers in the suburban style have huge negative externalities that most people just wave off, in other words.

[DSK]

AC is right: the perceived problems with "big box" stores can be solved using typical commerical land use & design regulations. Some people simply want to ban larger stores outright. Is this due to "economic protectionism?" For some of them, yes. But even worse, in my experience, is that when you get some of these anti-big-box people talking in detail you will discover that many (definitely not all, but many) are simply racists. You get all the usual code words about "unsavory" people coming via -the horror!- mass transit.

[Greg]

>The permit application will
>require an "economic impact"
>statement and notification of
>surrounding neighbors and NAs.
>In other words, it's a ban.

Can you clarify this statement. How is this a ban?

[M1EK]

"permit application" means they can say no. In addition to all the other places where they can already say no, but only for certain well-established reasons (which must be strong enough to forestall lawsuit). This basically turns big boxes into a "permitted" use, i.e. conditional; so effectively rather than having to defend why they said "no", they're allowed to just say "no".

"notification of surrounding neighbors and NAs" means the City Council will be told to say "no" by the Usual Suspects.

[AC]

The only thing I would add is that if they get past the NGs, the "economic impact statement," together with CU permitting, will require that they get past incumbent businesses, who will have new leverage.

[Chris Grazier]

The purpose of requiring a conditional use permit is not to ban big boxes, but to ensure that they go in the right locations. Currently a 200,000 sq. ft. Wal-Mart can be built on any General Retail or Commercial Services zoned site, even if that site was zoned far prior to the emergence of these mega-stores. There are appropriate and inappropriate locations for these behemoths and this is just another tool to ensure that they locate in the appropriate ones.

[AC]

Chris,

This would be a more believable line if (1) the Austin Independent Business Alliance were not the primary proponent of this ordinance; and (2) if the AIBA had not written the requirement for an "economic impact" statement into the ordinance.

The ordinance isn't aimed at just 200,000 square foot "behemoths." A 50,000 sq. ft. Barnes & Noble doesn't pose any problem comparable to a 200,000 sq. ft Wal Mart, yet the ordinance covers the B&N store. Any why require an "economic impact" statement for a B&N store?

But let me take your claim at face value. If the "right" location is really the issue, then why not create a new zoning category? We've got 20 or so, plus dozens of special overlays -- practically one for every neigbhorhood. What's one more? We'd have predictability, the city would save lots of time and money refereeing these disputes, residents would know what they were getting when they bought a house, etc. And, best of all, we'd know that incumbent businesses weren't using our zoning code to stifle competition.

[Chris Grazier]

To my knowledge this is being pushed more by Livable City than the AIBA, but I agree that a new zoning category may be a more appropriate response. .

[Tracie Donnelly]

Please move to Houston. They all think like you do in that lovely big box haven so you'll fit right in! Really, please, move.

[AC]

Why? Because I don't believe in using the City's zoning power to stifle competition and restrict consumer choice? I'll bet most Austinites agree with me.