Cafe Hayek

Montgomery County yesterday joined a growing list of jurisdictions around the country that have imposed tougher zoning restrictions on big-box retailers, marking a victory for unions and Giant Food LLC, which joined forces to lobby for the restrictions.

The council voted, 7 to 0, to adopt zoning rules that allow retailers to open so-called "combination retail stores" -- discount stores of at least 120,000 square feet with a full-service grocery and pharmacy -- only in specific commercial zones and then, only with a special permit.

So this is pretty straightforward—a unanimous vote to make it harder for competitors to serve customers.

The zoning rules essentially subject some big-box stores to an additional layer of review by county officials and provide another opportunity for public input.

While the amendment passed yesterday does not name specific retailers, in practice, it would affect only Wal-Mart Supercenters, SuperTargets, and the supermarket chain Wegmans.

The County Executive, Douglas Duncan, pushed the bill and announced its success as a triumph for smart growth:

"Montgomery County today took another step forward in its long fight to reduce sprawl and encourage smart growth development," Duncan said in a prepared statement.

Duncan lobbied members to vote for his proposal, his spokesman, David Weaver, said. He had help from Giant Food, which sent letters to the council supporting the proposed restrictions. Officials of United Food and Commercial Workers Local 400, meanwhile, organized labor, education and women's rights advocates to testify with them in front of the council in October.

Costco Wholesale Corp. hired prominent local land-use attorneys who successfully argued that it should be exempted from the restrictions. Home Depot Inc. organized a last-minute e-mail campaign by its store managers urging council members to exempt home-improvement stores. They are exempt because they don't have grocery stores.

So basically, this regulation protects Giant Food, a mediocre chain that fears the encroachment of the extraordinary Wegman's, from serious competition.  That means higher prices and less selection for shoppers. 

I love that earlier reference to women's rights advocates favoring the restriction.  Who knew that women, especially poor women, needed to be protected from shopping at large, low-price grocery stores?

I also like how the Council didn't ban big-box groceries outright.  That leaves open the door for special begging, pleading and lobbying.  It really highlights what smart growth is  about—legislator as gate-keeper.  If you'd like in, love me enough or pay me enough and I'll consider it.  Maybe.  It's an outrageous way to run a jurisdiction in a democracy.  It makes property use and property rights subject to the whim of legislators.  What a sad day for the rule of law.

My general take on the big box phenomenon is here.

Posted by Russell Roberts in Regulation | Permalink

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