All Zoning, All Day

Posted on by David Stokes

Let’s move from the theoretical debate over zoning to an actual example taking place right here near the Show-Me Institute’s Clayton office. Today’s Post-Dispatch has a story about the possibility that Clayton may allow local neighborhoods to establish strict architectural guidelines for the demolition or alteration of homes within historic districts. It would take 51 percent of property owners to petition for the creation of a local preservation district with very broad powers to limit tear-downs, establish property rules, etc., and would then require two-thirds of the property owners vote in favor for it to take effect. There is no denying that this could lead to 70 percent of the property owners in an area — perhaps the 70 percent who plan on staying long-term — causing economic harm to the 30 percent who might have a desire to significantly alter or improve their property before selling it. That part is clear, and I am not even necessarily opposed to this.

This is a pretty stark example of the threat of the tyranny of the majority versus the tyranny of the minority. Here you have the potential for enough property owners who agree with the plan to limit the rights and options of the few who might disagree with it. Most of the people here at the Show-Me Institute fear the tyranny of the majority much more than the reverse, and no doubt it is the much larger threat to liberty. But the reverse can be true, too. You get the tyranny of the minority when one atheist files suit to block a prayer at graduation that the other 999 students desire. Or when one parent objects to something in a textbook — evolution, perhaps — so the entire school either becomes subject to a disclaimer, or ditch the book entirely. Sometimes, one loud person who complains about their rights enough can restrict the rights for an entire group. Sometimes that person is right, and sometimes they are just a jerk.

This leads back to the question at hand in Clayton. Should the will of the majority stand, as will likely happen through passage of historic preservation districts? Or should the rights or people to do what they want with their property take precedence? Let’s be clear — this is not eminent domain, because no property will be taken away. But, conversely, I don’t think the plan calls for compensating anyone who can prove they are financially damaged if their proposed tear-down project is denied.

I know what some will say: If the neighbors want to preserve their historic values so much, they should buy the property of those who don’t. That is putting their money where their mouth is. On the other hand, it only takes one property owner surrounded by historic homes to put up a monstrosity that damages the property values for everyone. Then again, I have always liked the Miami Vice house on Lindell, and I am pretty sure it didn’t damage any property values there.

I say go with the will of the majority when it comes to historic preservation districts. But I really do see both sides of the argument.

Questions About the BBB

Posted on by David Stokes

I have praised the Better Business Bureau several times here at the Show-Me Institute, particularly in discussions about occupational licensing. So, in the interest of fairness, I want to highlight this disturbing AP article in the Columbia Daily Tribune (the Post-Dispatch is also carrying it today), about recent concerns over strongarm tactics by the BBB.

The issues raised are serious. The BBB should not give higher ratings to businesses who are members than they do to nonmembers. (Although focusing their search engine toward member businesses seems fine to me.) Any insinuation to businesses from the membership staff that their ratings could be downgraded if they don’t join must be eliminated. The issues raised in these articles are serious and important, but the BBB does appear to be taking strong steps to address the problem — such as firing people.

No Sure Things Except Death and Zoning

Posted on by David Stokes

There is some good stuff in the Columbia Daily Tribune today. First, there is a very interesting article about the struggles of a couple of funeral homes in Columbia to locate in certain areas where the zoning does not allow them. Now, common sense appears to be prevailing and it looks like the city will amend the zoning regulations to allow these two funeral homes to locate in abandoned churches (which is typical in the industry).

Zoning is one of the main areas of disagreement among the staff here at the Show-Me Institute. I, as well as Justin before he left for the big city, favor the rights of local government to enact zoning. Dave Roland does not. (I expect he’ll comment on this later.) I admit that zoning can easily lead to silliness and regulatory hoops, like with the issues outlined in the abovementioned story, but I still feel citizens have a right, through their elected officials, to lay a basic groundwork for which types of activities can take place within certain areas. Dave, if I may put words in his mouth, would say that those restrictions are improper and neighbors should recover in civil court any damages they might incur from a certain type of activity taking place near them. (I think that is way too optimistic a faith in our civil court system; pretty common among lawyers.)

The good news is that it appears the two new funeral homes will be allowed to open. While you might bemoan the hoops they jumped through to get going, if the fact that there was a zoning fight now means that there won’t be a lawsuit by the neighborhood later, then they are no worse for the wear. That is more hard realism than good logic or policy, but it’s probably accurate.

The best part of the article are the comments from the litigious neighborhood activist who appears to take his role very seriously. This guy really believes in his neighborhood, but apparently not in the free market. If I had discussions about zoning with this guy, I’d probably switch over to Dave Roland’s opinion. His comments are revealing (emphasis added):

Peter Anger, secretary of the Parkade Neighborhood Association, spoke at the September meeting of the Columbia Planning and Zoning Commission, where the Carr-Yeager request was discussed.

“My only concern is the zoning,” Anger said at the time. “I have no problem with a funeral home without a crematorium in there. I think ‘office’ zoning is appropriate.”

Anger yesterday said zoning would outlast any business that establishes itself on the site. “Whatever happens to be on that tract of land is governed by the zoning,” he said. “Businesses come and go at the whim of the economy, and I don’t want to see a McDonald’s on that corner.”

Anger is no stranger to modifying zoning ordinances and once appealed a city zoning decision to allow a concrete and asphalt plant all the way to the Missouri Supreme Court. He said office zoning would be appropriate for mortuaries without crematories.

“My recommendation, as an experienced neighborhood executive and spokesperson, would be to rewrite zoning to allow a mortuary without crematorium. It would be a great buffer” between residential neighborhoods and commercial districts, Anger said. “We have these buffers for very specific reasons

Who Doesn’t Want to Tour a Water Treatment Plant on the Coldest Day in Decades?

Posted on by David Stokes

I want to quickly thank Bradley Brown and Robert Fuerman of Missouri-American Water for taking me on a tour of their Missouri River water treatment facility yesterday. The tour was part of the learning process for an upcoming study I am writing, and the whole facility was awesome. It was incredible to stand on the plant’s intake tower on the Missouri River while it was 0 degrees out and watch the river go by. That is one part of Chesterfield most people never get to see, and I really enjoyed it.

A Step in the Right Direction

Posted on by Phil Eckelkamp

Missourinet has a story about how the General Assembly may soon end the fee office patronage in Missouri (link via Combest). The state’s fee offices tend to be run by people who have given to or helped certain politicians — usually the governor, state representatives, or state senators — during the last election. Their contributions are rewarded with a Department of Revenue contract. These are the same offices that you have to go to, in order to get your license(s) and license plates.

This seems to be a great step in the right direction, which started today with competitive bidding on 6 of Missouri’s 183 fee offices. So, now instead of officials giving the offices away through political patronage, there will be a system of points for five different categories. Requiring bidders to offer the best quality at the lowest cost for a service that everyone has to use is a great thing. I hope that the practical execution of this legislation turns out well as the initial idea.

On a personal note I know several people who were recipients of fee office contracts, and they are all very good people. I heard from several of them after the election, and a few of them said, without prompt, that if they lost their fee office they would not be all that disappointed. They were able to articulate how much hassle the offices really are, and that all the negatives we experience (long lines, computer crashes, outdated software, etc.) are just as much of a negative for them — being the subject of so much hate is never fun. So, hopefully, the bid process will allow those who genuinely want to run the office to continue to do so, and for those that don’t — enjoy less hassle in your life.

Misery Loves Company

Posted on by Phil Eckelkamp

There is a story in the St. Louis Post-Dispatch (link via Combest) about how states are pushing for a new tax on Internet sales. It starts out talking about how New York wants to tax Amazon, and narrows its focus to Missouri and Illinois. The article says that Missouri “lost” as much as $400 million on Internet sales (which may actually be closer to $122 million, because that larger figure was derived from an early estimate of 2008 online sales that was much higher than the actual total turned out to be), and that “in these times,” legislators and states may be looking in new places for revenue.

The article says that Internet sales are on the rise for the second straight year, hitting $204 billion annually (which again is probably an overestimate), while traditional brick-and-mortar stores are continuing to lose money.  In 1992, the U.S. Supreme Court said that the state couldn’t collect a sales tax from a particular business unless it had a physical presence in that state — but Congress could lift that ban at any time. As we stand on the razor’s edge of a serious economic downturn, I believe it’s a mistake to institute new tax policy that would dampen consumer spending even more.

The article seems to totally disregard why Internet sales are up.  When the market is allowed to operate without interference, this allows a clearer view of what the invisible hand is doing. Things are cheaper online largely because they don’t involve sales tax, and are subject to fewer labor costs, but online products also often come with free shipping — and there is no added personal cost of travel to and from a store. The combination of these factors — the ease of shopping from home, paying less, and easily finding desired products — makes clear why Internet sales are on the rise. These are also good reasons for local stores to place their inventory online and lobby for lower taxes — not push for more taxes. Although placing a tax on Internet sales (whether by the local, state, or federal government) may appear to level the playing field, at least from the brick-and-mortar perspective, it really serves as a protectionist measure for local stores without benefiting consumers.

As a sidenote to the whole idea of Internet taxation, the logistics of how this would work are almost unfathomable. Would officials simply tax online purchases for traditional stores like Best Buy or Walmart and exempt purely Internet-based sales on sites like Amazon and Overstock? How would they track sales for sites like eBay and Craigslist? Are they going to send revenue agents out to track each sale?  Does the state have the authority to tax beyond its boundaries? Would this have to be a federal tax, pursuant to the Constitution’s commerce clause? Does the state realize that forcing commercial activity underground only promotes organized crime? These are are just a few things to think about when contemplating such an idea. Rather than spurring the creation of a new market for illicit online sales, the government should be in the business of fostering legitimate commerce.

A Very Interesting Tidbit About MOSERS Over at Bloomberg.com

Posted on by David Stokes

Bloomberg.com, in a very interesting story about the problems facing public pension funds, reports the following (link via Drudge):

The Missouri State Employees’ Retirement System invested $25 million in half the equity portion of the BlackRock Senior Income Series 2006 collateralized loan obligation, managed by New York-based BlackRock Inc. Moody’s last month cut ratings on parts of the debt, saying a drop in value of the underlying collateral may cause “an event of default.”

Chris Rackers, the manager of investment policy and communication for the Missouri fund, didn’t return calls seeking comment.

This seems somewhat frightening. It also seems a good opportunity to plug our recent study of Missouri’s pension funds by the other Richard Dreyfuss.

‘No Pain, No Gain’ Meets the Hippocratic Oath

Posted on by Josh Smith

It is no surprise that the American health care system has severe problems. Add this one to the list: third- (or fourth-?) party agencies hired by insurance providers in an effort to economize costs of pharmaceuticals, even to the point of contravening doctor’s recommendations. The Columbia Tribune has the story.

Obviously, people are suffering as a result of this, and surely to some it is a repugnant practice. I hope I won’t sound like I am heedlessly advocating such things if I propose that it is a good thing that insurance companies are taking an innovative approach to cost cutting. Medical costs in the United States have run amok. It is important to remember that every dollar we save by using generic medicines for one patient is a dollar that can be spent helping someone else. Insurance has the tendency to divorce individuals from budget decisions that would require spending within their means. It is easy to make the emotional argument that no one should have to give up any amount of health care — but costs should be considered. I hate to miss an opportunity to plug one of my favorite studies of all time.

On balance, restricting access to needed medicines, and contravening doctors’ explicit instructions, is probably not the best way to manage costs. Pharmaceutical benefit management companies would probably do better to develop relationships with doctors as well as patients, perhaps helping to remind doctors that they should consider generic alternatives but not forcing patients to contravene prescribed treatment. The economics of medical care seem to be particularly vexing, given the high emotional context involved (although some things are still cut and dried, like this).

For more reading on free-market health care perspectives, check out the health care section of our main website.

The More You Learn …

Posted on by Josh Smith

Remember when I mentioned that everyone could probably benefit from learning more about retirement saving? Well, in a Wall Street Journal article with something of a Missouri focus, I learned that Edward Jones still employs financial Fuller Brush Men who discuss investment options with anyone who doesn’t slam the door in their faces. Their goal is to earn your trust and manage your investments — but, either way, you get some investment education out of the deal.

Speaking of educating oneself: traffic is much maligned, but also little understood. Proposed solutions to traffic problems are often unpopular, but worth considering (given the high cost that traffic exacts on society at large). There a couple of great guest posts on the Freakonomics blog dealing with the subject of traffic. I highly recommend them to everyone. And, if you’ve not had enough exposure to traffic policy information after reading those, this article is sorta long, but fantastic.

And, of course, let us not forget the Show-Me Institute’s own transportation studies.

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