Preserving the artificial value of the city’s 1,110 liquor licenses should never be a goal for policy makers. After all, the transferable permits, which allow restaurants to serve alcohol, were never intended as an investment vehicle, and the city never made any promises that they’d retain their price. The permits have grown valuable only because they’re much too scarce, but the restaurateurs who pay up to $400,000 for them, and banks that lend to those restaurants, do so fully aware that the value of the permits could vanish overnight.
So when asked to choose between protecting license-holders’ speculative investments and serving the public’s needs, there really shouldn’t be any debate. Yet a proposal by at-large City Councilor Ayanna Pressley to expand the number of licenses in disadvantaged neighborhoods has run into stiff opposition from the restaurant industry.
The only fair criticism of Pressley’s proposal, though, is that it doesn’t go far enough. What the city needs is a long-term strategy to abolish the liquor license system entirely, replacing it with a permitting program that allows any applicant who meets reasonable safety criteria to serve alcohol. In the meantime, though, Pressley’s plan should be approved.
Under her proposal, the city could award 150 new licenses, most of which would be restricted to neighborhoods that are now underserved. The new licenses would not be transferrable. The proposal would also create a category of “umbrella” licenses for large properties with several restaurants, like the South Bay shopping area, ensuring that those properties don’t hog multiple licenses that could go to neighborhood bistros.
The winner in Pressley’s proposal would be the public. Sit-down restaurants need liquor licenses to be profitable, neighborhoods need successful restaurants to be vibrant, and the city needs vibrant neighborhoods to be successful. The current restrictions on liquor licenses fall disproportionately on poorer neighborhoods, which are deprived of the economic opportunities that follow restaurants. Mattapan, for instance, has no restaurants that serve alcohol.
Licensing systems should serve some public interest, but the current alcohol restrictions don’t — and, arguably, never have. Beacon Hill originally imposed the limit on Boston to tie the hands of local Irish-American politicians, based on stereotypes about Irish drunkenness. The number of licenses has no relation to the city’s population, and has barely budged in a century. The unrestricted licenses are not tied to a neighborhood, which has allowed just the kind of clustering that has taken place.
After reaping profits from artificially limited competition for decades, liquor license holders have little ground to complain, now that city and state leaders are finally revising the rules. The best reason to support Pressley’s plan is the good it would do for Boston’s neighborhoods. But as an added bonus, it would put license holders on notice that the system can change, and that they need to prepare for a time when their unfair advantage disappears.