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.