The Undersupply of Noisy Mexican Restaurants

A coalition of NIMBYs living in an expensive apartment building near Logan Circle are upset about a proposed plan to increase business activity in their neighborhood:

It’s worth looking at the costs and benefits here. If Tortilla Coast opens, it will presumably be employing people. That’s a good thing for those people, and at the margin in general it’s good for the earnings prospects of working class people in Washington, DC. What’s more, both the income earned by the workers at Tortilla Coast and the sales generated by Tortilla Coast will be taxed by the DC government. That will allow more generous social services or lower tax rates throughout the District of Columbia. And note that the magnitude of these impacts is directly related to the question of how late Tortilla Coast is allowed to stay open, and to whether or not it’s allowed to operate an outdoor cafe. Both longer hours and more seats will increase the number of customers Tortilla Coast is able to serve, and thereby will increase the overall volume of employment and sales generated by Tortilla Coast. These are citywide impacts, with citywide implications and it’s perverse that the conventional policymaking dynamic treats the question of Tortilla Coast’s operating hours as a purely local concern.

Of course it’s true that the people living on the block will be more directly impacted by the rest of us. But there’s a problem of citywide aggregation here. After all, any proposed new business has to be located somewhere in particular. And even though we might all want less business activity directly outside our doors, we also might all want more business activity citywide. Certainly I think we all claim to want lower unemployment, higher incomes, more generous social services, and lower tax rates and it’s difficult to achieve those things without more business activity.

Another thing to consider from a citywide policy framework is that if a noisy Mexican restaurant opens on the corner of 15th and P and people find it unpleasant, it’s hardly as if the block is going to become a desolate wasteland. A 1,300 square foot condo on the block in question is currently selling for $780,000. Under the circumstances, introducing a noisy Mexican restaurant to the neighborhood might be considered affordable housing policy. Certainly it’s not obvious to me why, as a matter of citywide policy, we would want to put a high weight on protecting the investments of wealthy real estate owners. Progressives have become very interested over the past decade in the ways in which the political system exacerbates inequality but are often a bit negligent when it comes to identifying precise mechanisms. But what we have here on a small scale is an effort to reduce the demand for working class labor in order to maintain elevated asset price values.