In the News: Olivia LaVecchia
March 14th, 2018
Media Outlet: HuffPost
In Jersey City, New Jersey a community established the expectation that independent retail matters and that chain stores weren’t welcome. In the original piece by Institute for Local Self-Reliance Community-Scaled Economy researcher Olivia LaVecchia, she cited the benefits local businesses have for communities.
In this HuffPost piece by Peter Moskowitz, the reporter features ILSR’s research, here are our contributions:
Chain stores have taken over cities in the past few decades. In the 1980s, independent businesses ― defined as those with fewer than 10 locations ― accounted for about half the goods sold to Americans. Today that number has fallen to about one-quarter, according to the Institute for Local Self-Reliance (ILSR), which helps develop and lobby for policies that support strong local economies and challenges concentrated corporate power.
As that number has declined, towns and cities have found innovative ways to push back, including through the kind of “formula business restrictions” implemented in Jersey City. Those guidelines limit the number of chain stores that can operate in a particular area.
Jersey City’s restriction is limited: It applies only to newly redeveloped areas, and it still allows up to 30 percent of retail space to go to chains. But that doesn’t mean it hasn’t had an effect. …
According to the ILSR, more than 30 municipalities have implemented formula business restrictions in the U.S. One of the big pioneers is San Francisco, where restrictions were enacted in 2004 and won the support of a public ballot measure in 2006. Chains are limited in nearly every neighborhood in the city apart from its downtown business district. And while the city’s rule doesn’t ban chains outright, it requires each one to go through an application process during which locals can voice their opinions and vote on whether the chain will add anything to the neighborhood. The city planning department gets a say too. …
According to Stacy Mitchell, co-director of the ILSR, chains often win out over local businesses not only because they can afford more rent but also because banks will often finance lease deals only with companies they know, and big real estate firms will often approach only chain tenants to fill vacant spaces. Still, Mitchell believes formula business restrictions can go a long way toward keeping small businesses alive.
“There are all these complicated things going on behind the scenes with bank financing and commercial brokers that disadvantage independent businesses, and [these restrictions] can help rebalance the market a little,” Mitchell says. “And rebalancing that market can have a big effect.”