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Posted at 12:25 PM ET, 04/21/2010

The unintended effects of liquor moratoriums

By Topher Mathews


The District Alcoholic Beverage Regulation Administration just renewed for five years a moratorium on new liquor licenses issued in Georgetown. This moratorium has been in place for over 10 years. Similar moratoriums exist in other neighborhoods, such as Dupont Circle and Adams Morgan.

These moratoriums have several effects. The primarily desired one is to prevent an overwhelming number of restaurants and bars from moving in. However, in places like Adams Morgan and 17th Street in Dupont, arguably the moratorium was enacted too late to accomplish this goal. For neighborhoods like Georgetown, it's debatable that the market would even bear an overwhelming number of new restaurants or bars. But no matter how you look at it, most would agree that the moratoriums at least achieve stasis.

But less attention is paid to the indirect effects of liquor moratoriums. When the only way a new bar or restaurant can obtain a liquor license is by buying one from a current licensee, the price for the license skyrockets. In Georgetown, the going rate for a liquor license is reportedly $70,000. What this means is that small and independent restaurants and bars are that much less likely to open up in a moratorium zone.

ABRA should adopt new procedures to encourage more small and independent restaurants to open in moratorium zones. The most effective step it could take would be to enact a use-it-or-lose-it rule for licensees. As it is now, licensees who hold inactive licenses in a moratorium zone can sit on them year after year, paying a nominal renewal fee while waiting for their price. A use-it-or-lose it policy would drive that price down significantly and thus give small and independent restaurants a chance.

Topher Mathews blogs at The Georgetown Metropolitan. The Local Blog Network is a group of bloggers from around the D.C. region who have agreed to make regular contributions to All Opinions Are Local.

By Topher Mathews  | April 21, 2010; 12:25 PM ET
Categories:  Adams Morgan, D.C., HotTopic, Local blog network  
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