The Negative Impacts of Too Much Regulation
The Texas Multi-Family Housing Q&A with Caroline Kane and Kerry Ream
Every extra dollar that a commercial property owner has to pay toward onerous regulations, is one extra dollar not put toward the formation of a new business or further enhancing a desirable property that can attract a tenant or buyer. These regulations hinder economic commerce and are often roadblocks to progress. A commercial property that goes unused because regulations serve as too much of a hurdle, means jobs are not created, income is not earned, and progress in the community is stalled.
We’ve seen in recent months how regulations can indeed be a necessary evil, or in some cases, not so much. We often feel that when regulations are in place failures cannot happen. We have seen that not only can failures still happen, but layer upon layer of regulations creates levels of deniability that ultimately penalize the end consumer. Just over a decade ago, Houston went into overdrive in regulating the food truck industry. There were reasonable measures taken, like requiring food trucks to have a way of producing hot water. We know it is important to kill germs, and heat does that, so having hot water is not only smart, but it is good for business.
The regulations further mandated that the food trucks actually be able to move, as many had set up shop in one place and never moved again. As pests and rodents and stagnant air are problematic for a small cooking area which does not move, this again made some sense and offered some protection for the consumer. Under the guise of “beautification efforts” Houston then put severe regulations on what signage food trucks could use, and how much signage. So a business owner could be penalized with multiple permit needs and requirements, but they could not advertise to the people driving by that they were open for business so they might recoup some of the money spent meeting regulations. What kind of permits? Well, the city was requiring nearly $1,000 for permits, one of which was over $200 for “electronic monitoring” for a food truck that would cook “on-site” which we know, is all of them.
As mentioned earlier, some regulations make sense. There were several, though, which either made no sense or were nearly impossible to meet. Such as, requiring food trucks to operate within 250 to 500 feet of a flushable toilet. Or the banning of food trucks from parking near picnic benches. And there was indeed a point in time when food truck vendors were not allowed to sell food within 60 feet of each other. Think of every food truck park you have seen and imagine how those would not be possible if all or some of these regulations were in place today.
So whether it is a yearly review of some sort, or a review that periodically (perhaps every 2, 4, or 6 years) looks back at previous statutes and regulations and reviews them for current conditions and effectiveness, there should be some system in place that looks at the landscape of commercial property and weeds out some of the unnecessary and ineffective regulations whose time may have passed.
Commercial property ultimately means nothing to a community if it sits idle simply because regulations cannot be met. Again, depending on the circumstance, such as an environmental concern or concerns about some other hazards, there are times when regulations make sense. But let’s have a system in place where laws current to the times allow our commercial property owners and managers to put these assets to work for the betterment of our communities and our economy.