HomeMy WebLinkAboutSTEVE OAKEY FOOD TRUCK REGULATONS - RESPONSEFood Truck regulations: a response
Steve Oakey
Aug 7, 2019
I appreciate the fact, that there is a forum for voices such as mine and that
many who have preceded me, and many alive today, could not or cannot
imagine the simple exercise of being heard in public without fear. Ironically
at the July 17th City Council meeting I had my wife record the discussion
because I was attending a conference in Las Vegas discussing these very
issues: that is, what is the proper size and role of government and how does
it's role intersect with personal ownership and responsibility. The rationale
of my response is that what we lack is not more government intervention
and regulation; rather what we lack is a simple understanding of
government's responsibility to its citizens. In so far as food trucks or any
other business, The City of Rexburg is responsible for governing the health,
safety and threshold nuisances in its jurisdiction. That is all. To do otherwise
is a distraction and expense of valuable human capital. I ask the self -
answering and rhetorical question; why is this our problem?
In making my argument I would like to start by getting two very relevant
issues out of the way. First, it pains me to have to publicly oppose and call
by name a person for whom I have a great deal of respect. I have known
Boyd Berry for many years as a friend and businessman and have judged
him as genuine and trustful. I don't doubt his earnestness, as he displayed in
the July 17th meeting, in trying to correct what he perceives as a harm to his
business requiring government intervention. That being said, it comes to
mind something the great economist Milton Friedman observed, that
businessmen are some of the worst capitalists. I have listened to the
recording of the July 17th meeting several times in an effort to understand
what the core problem is and what form of intervention, if any, the City of
Rexburg could take to correct. Therefore I will use Boyd's specific
observations and concerns as a template for my response and will invoke his
name throughout. Why might you ask, would I want to break with him and
many others on this topic and potentially create friction in otherwise very
congenial relationships? Simply put, my system of values causes me to react
when I see infractions of what, is for me, very basic and simple rules of a
free society. Because, you see, we are not simply talking about food trucks;
we are talking about the power of government to compel the behavior of
every day people seeking consensual, voluntary and mutually beneficial
associations. The government coercion we are talking about on first view
looks benign, small and corrective as though a wise paternal guardian
intervenes on behalf of innocent citizens who don't know what is best for
them. The word we use for this benevolent coercion we call `regulation", a
messy, sticky word Boyd used several times, as in "some form of
regulation". When seemingly small rules and regulations are implemented
with the best of intentions, they accumulate; they morph and create perverse
and distortive incentives, which then can have very bad outcomes. The
original policy makers and politicians, who passed these laws and are no
longer around to take responsibility will say: "well, we didn't intend for that
bad outcome, we need to pass additional regulations to correct for bad
outcomes of the other regulations."
The second issue to get out of the way is this. In the academic literature
there is a large body of work which finds that with the accumulation of
government imposed regulation, wealth is destroyed, human initiative
diminishes, bureaucracies bloat, economies become inefficient and for
purposes of this discussion, the under classes are road blocked from entering
the market. The most regulated cities in the country correlate with the
highest housing costs, highest homelessness and highest levels of income
disparity. To substantiate that claim, I have a long list of articles, books and
web sites for anyone interested. (YIMBY pic) San Francisco has some of the
highest housing costs and homeless problems in the country. Even here, one
of the most politically progressive, leftist, statist cities, a movement has
started to demand relaxing housing regulations so as to allow the market the
ability to build more housing. You have heard of NIMBYism? Now meet
YIMBYism.
Ludwig von Mises, one of the most brilliant and prolific economists of
modern history said this about State intervention and regulation: "...almost
every restrictive measure brings advantages to a limited group of people
while it affects adversely all others... The interventions, therefore, may be
regarded as privileges, which are granted to some at the expense of others".
Listening to the July 17th meeting Boyd pointed out some valuable facts
about the mobile food business. It is more affordable for less affluent
entrepreneurs to enter the market and offer a wide variety of experimental
products at lower prices to a very discerning consumer. This opportunity is
classless and non-discriminatory as it ranges from the cheapest street cart
that you see regularly on the streets of Salt Lake City and elsewhere, to the
fine culinary food trucks following public gatherings. Few if any of these
risk-taking, hard working entrepreneurs could get a bank loan required for
the multi-million dollar fast food facilities such as Dairy Queen. Therefore
the simplicity of the food truck model, along with other Sharing Economy
examples such as Lending Club, Uber, Airbnb, and Kickstarter, allow novice
entrepreneurs with little capital, easier entry into the market. Boyd made
mention that his own kids shop at his next door competitor Karie Anne's as
do the many other discerning, self serving customers lining up for a product
that did not exist years ago. Is it possible that the owners of Katie Anne's
can feel confident in their product to the degree that they would transition to
a brick and mortar building, and that lending institutions would provide the
capital to do so? (Vintage Dairy Queen picture) This picture is representative
of the early Dairy Queen's franchised out in the late 1950's. The first Dairy
Queen opened in 1940 at 501 N. Chicago St in Joliet, Illinois. From these
modest beginnings Dairy Queen now numbers 5700 locations and is owned
by Warren Buffet's Berkshire Hathaway Holdings. Does anyone besides me
see the similarity between this picture and existing mobile food trucks? Not
only does it appear that there is no public restroom but no air conditioning,
no indoor seating and given the weeds growing next to the Dairy Queen
sign, a slightly unkept exteriorjust as we see in many of Rexburg's existing
brick and mortar buildings. The Dairy Queen truck parked in the front also
suggests that these cool and tasty treats were being sold, in a new and
innovative way, to the kiddies in surrounding neighborhoods, perhaps being
enticed via loud speaker, by the seductive sounds of children's tunes, much
to the competitive dismay of other existing ice cream stores. Boyd was
concerned with "mobile food vendors coming and going" and that he is
"...basically opposed to the whole idea of having 4 or 5 mobile trucks" in
close proximity to him. It seems to me that concern over your competitors
coming and going is misplaced as it only demonstrates your business model
has proven to be successful to a consumer base that can count on your
consistency, and give confidence that your million -dollar investment was
bringing a return. As for the dense proximity to such unstable competitors,
this is also a misplaced concern. Traveling down State Street in Salt Lake
City, consumers are flooded with the choices of auto dealerships,
periodically broken up by the many tattoo shops and concentration of
restaurants. These auto dealerships range from the most expensively
equipped with highly trained techs and sales people, fronting palatial show
room floors, all the way down to Evans Used Car Sales in Murray with it's
8x12 sales shack.
The question was asked: what do we want our town to look like
aesthetically. The well-worn phrase, "beauty is in the eye of the beholder"
applies well here as I have heard the complaint from many people that we
have too many fast food places in town and they all look the same. Some
years ago while visiting Austin Texas, we ate at a bare bones Bar-B-Que
shack that somehow passed any existing food inspections and used as a
menu, torn butcher paper and magic marker displaying the daily offerings to
the eager customers lining up. The aesthetics did not give confidence to the
faint of heart. No air conditioning, no colorful vinyl flooring, no cartoon
mascot. It was the finest Bar-B-Que I have ever tasted.
If we stand back and observe what is being asked for "some form of
regulation", we can only expect a Pandora's box of other "concerned"
business people who legitimately request similar prohibitive regulations,
"like they do in other towns". Boyd did not mention, the temporary Flower
Patch business just to his south operated by Max Clements. Where as this
floral business is not Boyd's competition, given what the city is prepared to
do, it would not be unreasonable for Bruce Sutherland to stand before the
City Council and demand "some form of regulation" against Max's mobile
green house. What are out-of-towners to think of a city that would allow
such an unattractive structure, what with its exposed wood exterior and dirt
floors? Likewise, sitting in the parking lot of Wolf Lighting is Smart Cents
Auto sales. Being the wise businessman that he is and trying to maximize his
property value, I think it likely that Brad is collecting rent from Alex
Fernandez, who contractually benefits from this arrangement. I assume that
Brad is paying his property taxes. But wouldn't David Taylor or Woody
Smith, who have been many decades in business and have invested millions
of dollars in their facilities, be within their rights to clamor for regulations?
After all Alex's sales office, is just a shack, and in many peoples opinion,
not a very nice shack. Wouldn't Mayor Merrill also seek redress against the
many lawn mower boys, who obviously have not been properly permitted
and licensed to handle dangerous yard equipment and lawn debris disposal?
And because my critique is inclusive, wouldn't councilman Busby and
Madison School district be remiss if they didn't seek more regulation of
home schoolers and private education providers? After all, it could be
argued that government should have a monopoly on education because
parents aren't union members, board certified or smart enough to choose for
themselves who should educate their children. Like these other good folks, I
include myself as a business owner who has been put upon by competition
and customer whims. There is nothing that these business people encounter
that I have not myself experienced. If you grant to every disgruntled
businessperson their request for "some form of regulation", wouldn't I,
along with dozens of others be within my right to do the same? I would then
request that every car wash fund raiser be shut down, for improper traffic
movement and spilling contaminated runoff into the storm drain system as I
would for every driveway washer, mobile car detailer or BYU-I student
project that was unlicensed and untrained for handling dangerous chemicals
and cleaning procedures. Yet it was and is incumbent upon me to understand
that customer expectations are unlimited and a truly free market will weed
out players who cannot provide those expectations and will continue
"coming and going".
As discouraging as it was to listen to Boyd's request for more government
intervention, it was more so to hear city council members suggest that the
city artificially control the supply of food trucks by divvying up permits or
controlling the "appropriate" food truck location, thus giving preference to
the early comers and barring the unlucky late entrepreneurs who didn't win
the time lottery. The unspoken question is, who is to decide how many
burger joints, gas stations, car dealers, doctors, lawyers or food trucks there
are except the self-serving consumer, who votes every hour, every day with
their dollars? Which wise city staff member is able to produce, without
prejudice, the algorithm that will tell us that there are enough food trucks in
a complex market and that we have saturated Rexburg, based on our latest
calculations of course? Or are we to just accept that one or two city council
members "just don't like food trucks"? Is it the task of city council to
instruct property owners that they are not capable of managing their own
business associations with willing partners and customers? Are we to expect
policy makers, elected or not to tell us how best to pursue our happiness?
Aren't we to be guaranteed that the government will protect our right to
pursue our own happiness however we see fit? When we look around the
room, we see a hand full of people who can make life altering decisions for
many hundreds or even thousands of people who are not even here, both
producers and consumers who can not voice their preference and don't even
know that they have been denied the right to try. And before we rush to form
another committee or pass this responsibility off to the city staff to instruct
food establishments how to handle cups of ice water and privately provided
restrooms, we should keep in mind that we already have mobile food vender
regulations that by themselves are ludicrous and onerous. Ordinance 1029
requires mobile vendors to move every six months regardless if they have
contracted with a private property owner. This is why Javier at Tacos Tepito
moves a hundred yards around the corner every six months and it is why in
2014, Julio Ortiz moved his Taco Izcalli from Rexburg to Idaho Falls,
successfully staying in the same spot, with the same beat up trailer on
Broadway Ave. until this year when he moved into a vacant Java Express
building on 17th street. Ordinance 1029 only requires a simple word change
to remedy this unfortunate injustice. There is a local urban story, the truth of
which I cannot vouch for. In summary the story goes, that the developers of
East Idaho's first mall, The Country Club Mall located in Idaho Falls, first
approached the City of Rexburg to locate the mall. The wise city fathers of
the time, in an effort to protect existing Rexburg businesses turned down the
proposal. Today, Idaho Falls is the commercial hub of eastern Idaho and
none of the businesses Rexburg's elite sought to protect exist.
(John Stossel pie) In 2012 John Stossel, formerly of ABC's 20/20 and FOX
Business News, ran a video report of municipalities shutting down kids
lemonade stands for lack of permit. When word got out that the government
was shutting down lemonade stands, caring and concerned politicians,
jumped into action and in order to correct the first unintentional outcomes,
passed more laws allowing "kids" to operate without a license. Utah passed
bill SB 81, which, thankfully, defines for us that a "kid" is under 18 years of
age and that "lemonade Stands" are home businesses not requiring license.
This new six-page addition to Utah's legal code, likely costing hundreds of
man hours and thousands of dollars to produce, can be viewed on the Utah
State Legislature web page along with pictures of the two smart and
upcoming politicians who sponsored the bill. While you are chuckling,
shaking your head in disbelief and letting that fact sink into your head, I will
test your patience just a little more by stating: I have been attending City
Council meetings for years and have the privilege of serving on the Planning
and Zoning Board. I have lost count of the many times I have heard some
iteration of the following. "I believe in the free market... but", followed by a
multiplying litany of well-meaning exceptions where -in the government
must "do something" about other peoples behavior.
Government shutting down lemonade stands? That's only the depressing yet
humorous tip of the iceberg. But here we are.
Related Articles
1) "Why Do Cities Matter? Local Growth and Aggregate Growth"
Chang -Tai Hsieh, Enrico Moretti. U. Of Chicago Law School
Chicago Unbound 2015
2) "The Economics of Exclusionary Zoning and Affordable
Housing". Benjamin Harney, Stetson Law Review vol. 38,
3) "The Economic Problems of Constrained Urban Growth".
Phil Hayward, Reason Foundation, May 2018
4) "Urban Containment: The Social and Economic Consequences
of Limiting Housing and Travel Options". Wendell Cox,
Adrian Moore. Reason Foundation, March 7, 2016
5) "Portland's Urban Growth Boundary: A Driver of Suburban
Sprawl". Scott Beyer, Forbes Magazine, March 29,2017
6) "Hamtramck: Scale and Institutional Frameworks".
John Sanphillippo, Newgeography, January 25, 2018
7) "The Property Ownership Fairness Act", Christina Sandefur,
Timothy Sandefur. Goldwater Institute
8) "The Affordable Housing Crisis". Richard Epstein, Defining
Ideas, Feb 27, 2017, Hoover Institute
9) "California's Needless Housing Crisis", Richard Epstein,
Defining Ideas, Nov 21,2016. Hoover Institute
10) "Where the Buffalo Zone: An Innovative Zoning Code",
Aaron M. Renn, City Journal, Jan. 5 2017
11) "The City with (Almost) No Limits". Patrick J. Kiger
Urbanland April 20, 2015
12) "How Land -Use Regulation Undermines Affordable
Housing". Sanford Ikeda, Emily Washington,
Mercatus Center, November 2015
13) "Land Use Restrictions and Other Barriers to Growth"
Edward Glaeser, CATO Inst. December 12014
14) "On the Origins of Land Use Regulations: Theory and
Evidence from US Metro Areas", Christian A. L. Hilber
Spatial Economics Research Centre, SERC, Jan. 2010
Related Books:
1) "Takings: Private Property and the Power of Eminent Domain"
Richard Epstein, 1985
2) "Zoning Rules: The Economics of Land Use Regulation"
William A Fischel 2015
3) "The Economics and Ethics of Private Property"
Hans -Hermann Hoppe, 1993
4) "The Best -Laid Plans"
Randal O'Toole, 2007
5) "Order Without Design: How Markets Shape Cities"
Alain Bertaud, 2018
6) "Edge City'
Joel Garreau, 1991
7) "Private Neighborhoods and the Transformation of Local Gov."
Robert H. Nelson, 2005
8) "The Voluntary City: Choice, Community and Civil Society"
David T. Beito, Peter Gordon, Alex Tabarrok, 2002
9) "Free Private Cities: Making Governments Compete for You"
Titus Gebel, 2018
10) "The Color of Law", Richard Rothstein, 2017
11) "Land Use Without Zoning". Bernard Siegan, 1973
12) "Against the Grain". James C. Scott, 2017
13) "Private Governance". Edward Peter Stringham, 2015
14) "Order Without Law". Robert C. Ellickson, 1991
15) "Prosperity Versus Planning". David Osterfeld, 1992
16) "Human Action: A Treatise on Economics"
Ludwig von Mises, 1949
17) "Interventionism: An Economic Analysis"
Ludwig von Mises, 1940
18) "Man, Economy, and State". Murray N. Rothbard, 1962
19) "The Triumph of the City" Edward Gleaser, 2012