Worst Law I Have Seen In A While

From San Francisco, of course! via Market Power

Prop. G obligates the
Planning Commission to conduct a hearing for any chain store (also
known as "formula retail") proposed in neighborhood commercial

Formula retail is defined as any retail sales establishment with 11
or more stores in the United States that maintains two or more
standardized features, including decor, facade, color scheme, uniforms,
signage or a trademark.

Incredibly, freaking 58% of the voters passed this turkey.  It's hard to know where to start, but here are a few thoughts:

  • Equal protection?  Anyone?  Buehler? 
  • One of the most obvious punishments of success I have ever seen.  If you only have one store, you are fine.  But if you are succesful and your concept flourishes and you have many stores, then you are automatically penalized.
  • One of the single most anti-consumer pieces of legislation I have ever seen.  Stores using a proven formula that has been succesful in other areas have a sort of consumer good housekeeping seal of approval.  They are by definition retail establishments where many consumers have already voted with their wallet "we like this."  So in effect, proven customer favorites are penalized vs. less proven concepts.  What an odd zoning concept when you put it that way -- we don't want anyone doing business here that has already proven themselves to be succesful with customers.  We only want you if you have no proof customers want what you are selling.

The other night I was staying in Arcadia, CA (a suburb of LA near Pasadena) on what I was told was the old Route 66.  There were a ton of restaurant choices, many of which I did not recognize, and there was a Chile's, which I grew up with in Texas.  I am positive some of those restaurants would have provided me a more satisfying meal than Chile's.  I am also sure some would have been worse.  Sometimes I am in the mood to find something new, but that night I just wanted a predictable experience.  All that stuff San Francisco is trying to penalize -- those standardized features -- bring real value to many consumers.


  1. Mark:

    The whole point of this type of legislation has nothing to do with anti-consumerism. This legislation and the anti-chain store (almost totally meaning Wal Mart) are simply pro-union legislation.

    Unions can only compete with the assistance of government interaction. Although unionism within the overall retail sector is not strong, it is somewhat strong in the grocery industry. Wal Mart is now a major competitor in this sector. Keeping out low priced competitors by legislative fiat allows some union held jobs to be maintained.

    OF course, the unions, the management of such groups, and their government protectors would never think that another way that they can compete is to offer higher end service that consumers would value.

    In my opinion, that has been the demise of the union movement. Instead of being a means of negotiating with management, unions have become the source of major productivity problems with their tactics that have cost major economic sectors of the American economy to stagnate: transporation, automobile manufacturing, and steel manufacturing are three examples of industries that have declined from world class industries to afterthoughts. Quality and productivity in these industries declined precipitiously while costs, particularly fringe benefit costs soared.

  2. coffee snob:

    Be of good cheer. Despite this oppressive legislation, SF still has an assload of *$. The people just don't want one to suddenly appear on every street corner without their input.

    SF also has a Hard Rock Cafe and a Cheesecake Factory. They had a Planet Hollywood, too, till the chain went belly up.

    Your dream life may be to be surrounded by Subway's, Applebee's, Chili's, Spoons, Denny's, CoCo's, and Office/Home DepotMax-Mart, but that's not the dream of the people of San Francisco. Just deal with it.

  3. Craig:

    If that's the case, coffee snob, then this ordinance wouldn't be necessary. Chain stores would realize this, and decide not to open stores in San Fran. If they did, their stores would soon fail due to lack of business. But apparently, chain stores think they can succeed there, so the elitists on the council are going to decide for the citizens that they don't want any chain stores.

  4. franco:

    Hmm... I'm sure someone has a nice 11 store chain in SF that's a real goldmine.

  5. coffee snob:

    The voters empowered the Planning commission to reject chain stores. This is just like any other form of NIMBYism. "Eatin' good in your neighborhood" is no different from a group home for child molesters.

    Put it this way -- having too many chain stores in a neighborhood would attract the wrong kind of people -- people like you, perhaps.

    Anyhow, you can get on Yelp or Chowhound and find out what the good and bad local places are; you don't have to rely on your experience with chains.

  6. mf:

    I'm sure we have worse laws...

    In Bruegmann's book on Sprawl - he suggests that the real lesson of Houston might be that zoning & planning only forestall and tax what will likely happen. That American cities end up much the same despite such noble goals. But it turns up as the 'zoning tax' that Ed Glaeser has described.

    Anyways, I'd like to share a favorite letter from my own corner of SF. A few thing to note as you read this: I go to Shufat's (aka Noe Valley Deli) more often than Starbucks - but Shufat's is not Starbucks. And the Shufat family is Lebanese. Across the street from both of these, meanwhile, another chain cafe - Tully's - has just closed and is reopening as locally owned cafe! And yes - this might be the dumber law - we have limited coffee house licenses.


    Shufat's Her Favorite Refuge


    I love Shufat's, the deli at 24th and Church streets, and nothing makes me more furious than the café license that this city of San Francisco issued to Starbucks instead of the Abunie family, who own Shufat's, many years back. Everyone who's spent any time in Shufat's with me agrees that Noe Valley would be a totally different neighborhood if the Abunie family had gotten that café license instead.

    Since 9/11/2001, these folks have become my favorite neighbors, and I'd trust them with my life. Were we to have the big earthquake, the terrorist attack, or, more likely, the state terrorist attack, we in Noe Valley would really have no public space to gather in, since Nutraceutical has taken over the building most central to the neighborhood and left it empty, to assert the primacy of private property over any community claim to its center or what might, long ago in Europe, have been called its commons.

    Since we have no public space, my first thought would be to head straight to Shufat's Market and Delicatessen. If we're goin' down, these are the folks I'd most like to go down with.

    Ann Garrison

    Dolores Street

  7. la petite chou chou:

    Just because there are "worse laws out there" doesn't mean it is ok for the Government to create additional, perceived benign laws. There are too many as there is. I agree with our blogger that the consumer should be the judge. If the consumer doesn't want chain stores there, they will choose another option and drive the business out legitimately rather than allowing an already too-big government to do it by force.

    Could you imagine if this became the norm for a bigger area than just SF? What if this applied to the whole US. Goodbye Safeway/Stater Bros/Publix, Fred Meyer/Kroger...well basically goodbye to all grocery stores.

  8. coffee snob:

    la petite: was your post a joke? Prop G was passed by the voters, not imposed from on high. The peepul of SF have spoken -- they don't want a Starbucks on every corner not occupied by a Subway.

    Why do you hate democracy?

    And if I want a cup of coffee in Noe Valley I go to Martha & Brothers. It's a chain, but a local chain. And they have a restroom.

  9. Sameer Parekh:

    This is one of those laws known as "prelude to empty storefronts." If you want to see what a city looks like after living under such a regime for a while, visit University Avenue in Berkeley.

    SF has a limited # of coffeeshop permits! Wow. That's something. As if coffee is a demonic vice that will destroy society if there are too many coffeeshops. (That's the rationale for limiting the # of liquor licenses, even that law too is merely a way politicians can increase their power to hand out favors to friends.)

    I like the comment about the 11 store goldmine. I do wonder what 11-store chain in San Francisco had the political pull to make sure the law was '11' and not '10'.

  10. napablogger:

    Look, I live in Napa now but I lived in San Francisco, and if we did that, allowed all these ugh chain stores, tourists would stop coming and we would go under. They are ugly. If you dont regulate against them, private property rights prevail and a parcel owner can build whatever they want, its their parcel. The fact that you can build a subway or KFC and people will eat there doesn't mean anyone likes the way it looks. It robs the place of its uniqueness. I don't think most of the voters who support it give a hoot about the unions. They want to keep their neighborhood looking nice with some character.

  11. la petite chou chou:

    Coffee Snob, why do YOU?

    napablogger, I've got a little anecdote for you. There is this little town in Oregon called Sisters and while they don't refuse to let businesses build, they do impose on them that they have to be built in the "old-west" style. It's a really cute little tourist trap. I think there are a lot of places around the country like that.

  12. Frank Stein:

    "If you dont regulate against them, private property rights prevail..."

    lol. Yes, we must protect ourselves against private property rights. When did so many people in this country become morally bankrupt?

  13. Max:

    11? Why exactly 11 stores? Why not 10 or 12 or 20 ? I mean, how the hell did they determine it had to be 11 shops, which lobbyist put in this so he is exempt?

  14. coffee snob:

    While reading about the impact of the people's will on the chain store juggernaut, I found a happily unintended consequence: corporations who plan to launch a new chain are incented to open a branch in SF before they reach the magic number of 11. So SF will get sexy new chains (think H&M, Old Navy, Niketown, etc.) long before they hit Pittsburgh and Houston.

  15. Jay:

    That coffee chain that has exactly 11 stores? It's PEET'S!
    Not Martha & Bros.

    Sneaky b*****ds. Can't win honestly, so they lock out the competition by law. And the taxpayer's of SF get to pay for the defense against the lawsuit that Starbuck's will almost certainly launch. And win.

  16. The Dirty Mac:

    They want to keep their neighborhood looking nice with some character...but they can shop online leaving the neighborhood congested with UPS and Fex trucks while taking revenue away from the noble local mercahnts and artisans. A ban on online shopping would solve that problem.

  17. Neo-Libertarian:

    Living in the area, I have to say that San Francisco is a truly beautiful place, especially as viewed from across the bay. But driving around it can be pretty inconvenient, parking is often a nightmare even for residents, and trying to find a drive-thru or a public restroom can be hell.

    The reasoning behind all the crazy and stupid laws is always either xenophobic (we're special and better than other places) or enviro-fascist (cars are evil and people driving them need to be assaulted and threatened with bikes, like Critical Mass).

    I think that the crazy, natural process of building housing is what made SF beautiful and interesting. Artificially engineering that look is, to me, like distressing or antiquing a piece of furniture. Sure, that false-distressed look makes it fashionable, but it's just fake. If you really want SF or any place to look interesting then repeal zoning laws. Let people build Second Empire monstrosities next to Art Deco apartments next to whatever. That would give the place tons of character, plus it would be free and constitutional.

    The one addition I would make is that the views should be commoditized. The view of the water is both very valuable and very contentious. By allowing people to own the views we could reflect the fact that a Pacific Heights house was purchased in part for the view. I don't know how to go about implementing it, but it seems like the best way to deal with the conflict over how high buildings by the bay can be.

    I made some different, but related, points here:

  18. Larry Sheldon:

    Lived nearby and worked in San Francisco for a lot of years.

    Out-of-towners asked repeatedly "What is the best thing about San Francisco?"

    The answer always was "The 5:14 train."

    Over-priced, over-valued, dirty, nasty place.

  19. Zach:

    Usually, South Park episodes are responses to news that's already happened (i.e. South Park satirizes life). I guess SF had to take it a step further and do something that South Park has already satirized.

    As a kind of disclaimer, I can't stand coffee, regardless of whether I make it, a mom-and-pop makes it, a 10 storefront "non-chain" makes it, or an 11 storefront chain makes it.

    South Park vs. Harbuck's

  20. napablogger:

    I have no problem with private property rights, in fact I belong to a group here that promotes them. But the fact is that if you don't make laws prohibiting what you don't want in retail, you will get a lot of ugly chain stores because they are all the things you are talking about here, more profitable, they can afford to build because they have a lot of money behind them, and they will pop up everywhere. If you want the unique stores and the old mom and pop stores you have to protect them. Economically and from a freedom standpoint, chain stores will win over every time, but there are other values too. People will use them because they more or less have to--that is what is around. Their prices are lower, but there is more to life than getting the cheapest possible price for something. If you don't want to look like Fresno where a long main drag has repeating sequences of KFC-Burger King-McDonald's-etc, etc over and over for miles, and that is it, you have to stop them. And I think that is ok for a local community to decide they don't want that. Who in the hell wants to vacation in Fresno?

    This is where, despite the fact that I pretty much am one, I think libertarians get too doctrinaire. Sometimes someone who owns some property's freedom, or just the idea of making money, are not the values you want.

    We could make a hell of a lot of money setting up plants that process human organs for sale, but nobody around here wants that. We want wine grapes. And somebody would probably be able to buy some property somewhere around here that would want to do something like build a chemical plant, or a giant Mall, or whatever. But if a local community doesn't want that, they should at least have some say so. Notice that the voters in SF didn't rule it out entirely--they just don't want it to get out of control.

  21. Neo-Libertarian:

    Restricting property rights because you think some people make poor choices in style is like restricting speech rights because you think some people have bad ideas. Either a person has a right or doesn't.

    And you never have to shop a chain store, you choose to. If people simply wanted the cheapest possible price, then stores would all be plain-facade gray, wrapped in white paper and employees would all wear undyed-fabric uniforms. People want some style, they just often make different cost-style trade-offs that you don't approve of.

  22. Mark:

    Anyone who claims that it is "ugliness" they are trying to keep out to protect tourism is being totally ridiculous.

    The chain stores they are "prohibiting" require too much square footage to ever move into these tourist areas. The large parking lots and facitlities that they require would be cost prohibitive regardless of the architecture.

  23. dragon:

    I really love to see all the nice political comments ,You get what you vote for so be careful what you whish for you might get it

  24. Stok35:

    what was JD rockefeller's scandal???

  25. berourke:

    government regulation gives large chains a business advantage in that they have the scale to deal with all the paperwork BS. it seems only "fair" ( how I have come to hate that word) that small business gets an occasional break.