Sunday, April 29, 2007

Does land-use planning/zoning inhibit a great restaurant scene?

One of my posts last week inspired quite a debate in the comments on whether land-use planning or zoning has any impact on the restaurant scene in a city - interesting enough I thought the topic deserves its own post. The post noted that Houston was ranked as the sixth-best city in the country for restaurants by Forbes Traveler.

The debate started when I responded to a commentor that noted that Dallas doesn't seem to have nearly as interesting a restaurant scene as Houston - they are really much more chain-focused vs. our "home-grown" scene of great independents. That fits my limited experiences in Dallas, and I have heard it from a number of people over the years, especially those that moved to Dallas from Houston. But if you look at my eight reasons for why Houston has such a great restaurant scene, you'll see the Dallas shares pretty much all of them except for zoning and maybe a bit of diversity.

My comment:
I think zoning/permitting regs play a part in a bland restaurant scene. I've heard that cities are reluctant to permit/approve independent restaurants (or developments that will have them) because they have such a high failure rate, and they fear the image of empty retail. They feel chains are much safer and more stable.

In Houston, anybody who thinks they've got a better idea can find a hole-in-the-wall to start, and if they're successful, it's easy to expand from there, and if they're not, somebody else comes along to replace them pretty quickly. Really quite the Darwinian survival-of-the-fittest ecosystem that leads to some great winners over time.
Others pointed out that chains have more money to work through the permitting process, and some requirements for stand-alone restaurants driving up costs vs. strip centers, which also favors deep-pocketed chains. That led me to some additional thoughts:
I'm going to propose another potential cause: in my experience, cities tend under-zone commercial relative to demand (exception: places like CA with a local tax system heavily tilted towards commercial because of property tax caps). Sometimes it's from residential objections, but, more commonly it's from simple economic growth: people have more discretionary income over time (and want to buy more and eat out more), but planners zoned the "appropriate" amount of commercial space many years in the past. Given limited commercial space relative to demand, chains have more financial clout vs. independents, and win the competition.

Finally, to tilt the playing field even more against independents, property owners also prefer the stability of chains as leaseholders. This happens in Houston too, but because our commercial space can expand to meet demand, there's still plenty of affordable space willing to take independents.
There are other ways to develop a great restaurant scene, as shown by some of the other cities on the list. One is lots of tourism, like Las Vegas or New Orleans (which also has a unique cultural stew to help). But another way is in older cities like NYC, Chicago, SF, and Boston that may have plenty of regulation, but they also have high incomes and a lot of old, existing street-level retail that has to fill with something, and restaurants are a very common use.

But when it comes to the everyday, modern, car-based city, it looks like Houston's approach of no-zoning and light regulation creates the richest diversity of great independent restaurants (and affordable too!). Now, whether or not that's good for our waistlines - and health - is a whole 'nother story...

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At 10:57 PM, April 29, 2007, Blogger John said...

I think trying to attribute our restaurant scene to lack of zoning is a real stretch, especially when the cities - not just in the US, but around the world - with great restaurants do have zoning. This is a great restaurant town, but so are SF, LA, NY, Chicago, DC, London, Paris, Madrid, etc... all with more restricted land use.

The scene is Dallas is better than you realize, I think. And maybe Boston has changed a lot since I left ten years ago, but the restaurant situation there was pretty bland compared to Houston (or any of those other cities).

I think more important factors for Houston are a diverse population that brings lots of interesting cuisines, a low cost of living which frees up more money for dining out, and lots of business travelers with money to spend here.

There seems to be an urge to attribute everything good in Houston to lack of zoning, and it can get rather silly. It was a lovely weekend! That's because we don't have zoning!

At 11:12 PM, April 29, 2007, Anonymous Anonymous said...

New York, Chicago, San Francsico, Los Angeles and New Orleans finished ahead of the Bayou City.

Could it be just be a function of how "international" a city is. If you take out New Orleans, then show me this list, and ask me the common denominator I would say the large presence of internationals and immigrants. New Orleans would seem to be a special case being such a tourist town and the focal point of a specialized cuisine.

At 8:25 AM, April 30, 2007, Blogger Tory Gattis said...

The other cities you list are major, big $ cities on a level higher than Houston. Very large populations of very well-off people can certainly drive a restaurant scene. And international diversity is certainly important. I also pointed out at the end the street-level retail issue with those older cities.

Zoning/permitting is certainly not the most important factor, but I think it is the boost that puts Houston over the top and into roughly the same league as those cities.

At 10:55 AM, April 30, 2007, Anonymous Anonymous said...

"The other cities you list are major, big $ cities on a level higher than Houston."

Which is why they beat us and then we are the next big large money city. So maybe size is the main factor with large varied immigrant/international communities the next.

Those are not the cities I listed, but the ones your link listed.

While I agree with you that our lack of heavy regulation in Houston is a great thing. I also agree with some of the other normal posters that you are too quick to credit the regulation climate as the reason for everything good about the city.

At 11:49 AM, April 30, 2007, Blogger Tory Gattis said...

Well, part of the reason I focused on Dallas is they do have the same size as Houston (on a metro basis), and, at least in the superficial stats, roughly the same demographics - although I doubt they are quite as international in reality.

> you are too quick to credit the regulation climate as the reason for everything good about the city.

Point taken. I'll be honest: I see it as part of my mission. I think it's too easy for a city (or really any person or group of people) to see something they don't have and want, and say "let's go get that" (like, say, a tidier and more aesthetic city). Kind of a "grass is greener on the other side" syndrome. My job is to say, "hey, be careful, the way we currently do things may have created some benefits we shouldn't take for granted, and a "fix" may end up costing us more than we realize."

Houston is the largest unzoned city in the country, and I think that leads to some benefits we should be more aware of. Doesn't mean we can't do things better (we definitely can) - we just need to carefully weigh up all the impacts , and realize what makes us special, rather than rushing to emulate city X or Y.

At 12:02 PM, April 30, 2007, Anonymous Anonymous said...

Dallas' proliferation of chain restaurants has probably less to do with zoning and more to do with Norman Brinker. Brinker founded the Steak and Ale dining concept, and later bought a small chain called Chili's, and turned into the prototype of a chain restaurant corporation. Imitators include Bennigans and TGI Fridays.

All four of these corporations are based in Dallas or its suburbs. As it is common for the home turf to be saturated with restaurants, since they know the lay of the land (see Landry's in Houston), the Dallas area is littered with these chains.

None of this has anything to do with Dallas zoning.

At 5:28 PM, April 30, 2007, Anonymous Anonymous said...

I wonder if the oil industry might have something to do with it? Oil industry professionals (especially geologists/engineers) have been pretty far afield. It’s common for a New York banker or LA entrepreneur to be familiar with Shanghai or Paris, but get a group of oilmen together and you hear stories about Lagos, Port Moresby, Dubai, Alaska….Add the population of immigrants from East Asia and Mexico, and you’ve got a mix of people with liberal palates.

I’d be interested to know how Silicon Valley’s restaurant scene compares to ours, after controlling for increased regulation in California.

Just a thought…I’m not married to this thesis.

At 5:35 PM, April 30, 2007, Anonymous Anonymous said...

"Point taken. I'll be honest: I see it as part of my mission."

The last few months, it has seemed like it pretty much IS your mission.

At 5:41 PM, April 30, 2007, Anonymous Anonymous said...

Here’s another thought for you: Liquor licensing. Many of the Dallas suburbs are still under some weird liquor licensing’s not just the prohibition aspect, it’s the incremental recordkeeping and liability that provides a barrier to entry that chains are more capable of negotiating than mom-and-pops. Perhaps it’s a legacy of the (small-town, Oklahoma/West Texas, etc) immigration into Dallas vs. Houston.

I spent a year doing a long-term consulting gig in Addison, Texas, where you see a higher concentration of eateries per square mile than anywhere I’ve ever seen (probably because they had the most liberal drinking laws in the area. A lot of them were chains, but there were a quite a few one-offs sprinkled in there. All the really high-end, experimental stuff (Abacus) was closer to downtown.

My current home in Pearland didn’t really see an expansion of restaurants until the laws were changed to allow liquor by the drink, though I can’t tell if the population growth was coincident to the liquor laws being changed.

At 6:15 PM, April 30, 2007, Blogger Tory Gattis said...

> I’d be interested to know how Silicon Valley’s restaurant scene compares to ours, after controlling for increased regulation in California.

I have very little experience on SV. I had a friend go to bschool at Stanford, and I seem to remember he was relatively unimpressed with the restaurants and the retail, esp. small, expensive grocery stores (we only half-joked about planners permitting only one grocery store every couple sq.miles, because that's all that're 'needed' - don't worry about competition).

But I think CA in general is an odd exception. Prop 13 drastically limited property tax revenue, so cities are desperate for sales tax. To get it, they try to attract as much commercial development as they can, even competing fiercely with neighboring cities to land big box stores.

At 2:59 AM, May 01, 2007, Anonymous Anonymous said...


Actually, many California towns and cities have pretty strict zoning rules to prevent big box stores from coming into the area. Political opinion against them also runs pretty deep for a number of reasons (labor practices, destroying traditional retail, strip malls ruining downtown retail, general sprawl and environmental concerns, etc).

At 11:16 AM, May 01, 2007, Anonymous Anonymous said...

If under competition "traditional" stores fail, then so be it. If a town wants create a climate of high prices for their citizen with less selection, then so be it.

Give me big box stores with plenty of selection and lower prices any day.

At 11:43 PM, May 01, 2007, Blogger Clarence said...

I'm originally from the Silicon Valley. In general, the Silicon Valley has a similar sort of restaurant scene as Houston. As to be expected from any immigrant-rich community, there's lots of ethnic eateries -- San Jose might be the only city that has a better Vietnamese restaurant scene than Houston. Like Houston, there isn't really an emphasis on big-name chefs or a huge foodie sensibility. (The foodie in me treks up to San Francisco for that niche.) There is a Michelin two-star in the Valley, though -- Manresa -- something that Houston probably wouldn't have, if the French boys ever came to town.

I'd be hard-pressed to make a case that regulation affects a city's food scene based on a comparison of the Silicon Valley and Houston's food scene. There might be a case for a correlation between the spatial distribution of a city and its food scene, but San Francisco would be a good counter to that thesis. (It's not all foodie bastions in the City.)

@Random Thoughts
That's just popular conjecture. There are a couple of cities that have those explicit regulations, but by and large, the "big box competition" phenomenon holds out. My town (Mountain View, home of Google) has certainly promoted big box retail development to attract more sales tax revenue. East Palo Alto has embarked on big box building campaign over the past 10 years to shore up its extremely dire city finance situation.


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