In Berkeley, Free Markets An Alien Concept

Too bad we can't think of any local economists who could help explain the basics to these guys:

Shortly after John Moriarty opened his Elmwood District jewelry shop nearly three decades ago, the two-block shopping district on College Avenue had a cobbler, pharmacy, gun store and the most restrictive business regulations in Berkeley.

Those shops have all since closed, and now Moriarty, head of the Elmwood Merchants Association, is at the forefront of a neighborhood-merchant alliance working to undo the quota system designed to protect neighbors from losing shops they rely on and merchants from rising rents.

“It just didn’t work,” Moriarty said. “The city has never enforced the quotas, several of the neighborhood serving shops have closed and rents have gone up.” Moriarty pays $3,500 a month for the storefront he rented for $400 in 1978.

The Elmwood Business District Advisory Committee, comprised of merchants and leaders from surrounding neighborhood associations, has proposed scaling back the quota system from nine business categories to two: food service and beauty salons. The group also recommends barring businesses from expanding into neighboring shops as the clothing store Jeremy’s did earlier this year.

“We believe in the free market,” said Kimberly Tinawi, owner of the Elmwood Market and the co-president of the Claremont Elmwood Neighborhood Association (CENA).

....The most vocal opponent is Tad Laird, who recently bought the struggling Bolfing’s Elmwood Hardware Store. “Eliminating the quota system will force my business out,” Laird said.

He predicted that open competition would lead to higher rents that would make a neighborhood-serving hardware store on College Avenue unfeasible. Laird, who owns the building housing his shop, also called for easing zoning restrictions so he could build condos above the store to help him underwrite the hardware business.

....Jason Wayman, owner of Elements, an Elmwood District clothing store, said he refused to participate in crafting a new quota system out of frustration with the city. “In reality, there has never been a quota system because the city refused to enforce it, he said. “This is like closing the door after the cow done left.”

Last year Wayman was one of several merchants who fought unsuccessfully to keep Jeremy’s from expanding its Elmwood clothing store into neighboring storefronts. Even though the quota for clothing stores had been filled, the city allowed the expansion, which Wayman said has cut into his bottom line.

“If Jeremy’s is going to expand to five units, then the quotas don’t matter,” said Desiree Alexander, owner of the Elmwood clothing store Dish.

Dave Fogarty of the city’s Office of Economic Development acknowledged that “the city has misadministered quota system permits.” He said that by simplifying the system, city officials would be better able to enforce the rules.

All in the name of 'free markets'. Berkeley style.