Comment by nomilk
8 months ago
> on the vibrant business and street culture in Japanese cities and the seemingly very, very low barriers to entry for regular people to participate.
An astute observation that allowing markets to operate without onerous licensing schemes and regulations often has wonderful upsides, allowing quirky and niche interests to survive and even flourish.
A similar situation was true of Melbourne's small bar scene vs Sydney's. Sydney's more expensive/onerous licensing requirements were prohibitive for tiny bars. Whereas Melbourne's licensing was more permissive and less expensive, resulting in an abundance of quirky and interesting venues. Possibly my favourite example was a tiny indy video game bar (it shut down during covid, I think). https://barsk.com.au/skgames/?p=done
A similar situation in the US can be seen in Boston. Historically terrible nightlife and for easily explained reasons. Liquor licenses are distributed by the state at a capped amount that can potentially be increased each year, meaning the majority of new businesses wanting to have alcohol sales will need to purchase an existing liquor license from another business, often at an exorbitant price (over 500k USD on average I believe)
This makes it extremely difficult for any new businesses to start, and massively advantages large chain businesses that have the ability to make the initial investment in securing a license, versus small or quirky businesses which just have no chance getting started.
This makes so much sense to me. I've always thought Boston's nightlife was terrible when compared to places in Texas. You go to Austin and there are the most random bars, clubs, and restaurants. Most have their own quirks and personality, making it so no one place is exactly like the other.
Unfortunately most people don't seem to understand that over regulation can end up benefitting bigger more established businesses, simply because it raises the barrier to entry.
If this is one of those sought-after business zones in a rich area, there are only X slots to fill, and somehow it's decided who gets them. Take away liquor licenses, and the barrier will be rent instead. If you want lower barriers, there simply has to be more real estate available in that one area.
It's usually like this in other cities, the rich areas have high-investment establishments that play it safe. Maybe that's ok if you want something mainstream and/or high-end.
There are some pretty awesome small, unique bars in Boston, but there could be so, so many more if the liquor license laws and rent prices were more reasonable, though.
Why do you need a liquor license for nightlife. There is more to life than just drinking alcohol.
"Night life" tends to refer to bars and clubs, and regardless of your personal stance on drinking the majority of people going to bars and clubs expect to be able to drink alcohol.
Because the economics of it are such that there's where you get your money. How much cover charge are you willing to pay to go out to a club playing local talent on a random weeknight? A cover charge that would actually cover costs at a venue with no bar would be exorbitantly expensive. This is why many places with cheap cover have a drink minimum.
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Businesses that sell alcohol make a lot of money, businesses that don't tend to go out of business.
Wish it weren't so (I don't drink alcohol, personally), but that's the economics of it.
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Because you can't drink caffeine at night and we don't have any competing depressants.
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Japan is full of licenses and regulations, it is almost the exact opposite of the free market utopia you're imagining. You're not even allowed to buy a car without a permit that proves you have a parking space for it.
What Japan does different is that it has sensible zoning laws that are designed around foot traffic rather than car traffic. Why don't you have small shops like this in the U.S.? Because of minimum parking space requirements for cars.
> You're not even allowed to buy a car without a permit that proves you have a parking space for it.
I would cross out "even" in that sentence, and then step back and admire it. This is one of the best things about Japan. For some bizarre reason there is an implicit assumption (at least in many places in Europe, especially Central Europe) that 12m2 of public shared city space should be reserved for your metal box on wheels and that it's somehow a right.
It is insanity. In Amsterdam, houses go for €9,000 per square meter. So a parking space should cost around ~ €9,000 × 12m2 = €108,000. Meanwhile parking permits for inhabitants go for €500-€750 per year. It's the cheapest real estate available.
It also helps that apparently in general street parking is banned (possibly at least in big cities) due to disaster considerations - eq. for easy access for rescue personnel after a major earthquake or Typhoon. Not to mention tightly parkiong cars potentially being a fire spreading hazard in such a scenario.
In comparison, even here in Europe there are tight rows of cars in almost every street, reducing space for greenery, eating up sidewalks, making street crossing dangerous and sometimes even making the street hard to navigate for the cars themselves, not to mention making quick stops for taxi drivers or food & grocery delivery cars almost impossible.
It would help if traveling into the city for work would take also 45m, instead of 2h jumping across train, tram and bus connections, and this on a good day, when they aren't missed by "pick random DB excuse of the day".
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Do houses and land cost more, or less, there than the US?
Full of licenses and regulations doesn't mean that the licensing requirements for bars in particular are onerous.
An example is where I'm from, in Canada. Licensing for cars is easy. Business licenses are easy enough, if they're non-physical.
But opening a bar means at least $50k of licenses/compliance costs. To have a bar, you need to serve food. To serve food, there's minimum requirements for all sorts of things from electrical to ventilation to plumbing. So you need to apply to the city to do a study and plebiscite in the neighborhood to determine no one objects to your bar. You need to have an engineer sign off on your design and the fire department to sign off on that. Liquor license is $$$.
And that's before even bringing up the cost of the lease (1 year rent as deposit) or the actual construction costs (last I checked, over $400 per square foot).
> You're not even allowed to buy a car without a permit that proves you have a parking space for it.
And this is how you end up with excellent public transport, no SUVs, and like the lowest traffic death rate in the world.
Requiring proof that you have a parking spot should not be an issue. If you have a car, you need to put it somewhere right? Parking is generally private in Japan, so it comes at a premium. In western countries people expect that the government provide sufficient parking spots, but that's not necessary the most efficient allocation of valuable land.
It's the difference between drivers paying for their own parking or having it subsidised by non-drivers, along with the various issues caused by motornormativity (when you design around cars, you exclude walking/cycling etc).
Texas alone is twice the size of Japan with 1/4 of the population.
There’s little need for efficient allocation of essentially infinite space outside of urban areas constrained by geological features. And in those places parking comes at a premium too even in Western countries.
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> Because of minimum parking space requirements for cars.
This is not true. In a big city there are plenty of locations without parking or rely on public street parking. The issues are the onerous zoning, licensing and insurance requirements.
Land rights conversion. I believe if 2/3 of homeowners (living in a low-density area) agree to a proposed readjustment, then the rights of the land belonging to all homeowners are thusly converted. Oddly makes sense as the end-product, in turn, allows for greater density whilst retaining much of the aesthetic of said-land.
And that running businesses out of homes is frequently illegal, another casualty of zoning.
That’s the whole point of zoning
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>> on the vibrant business and street culture in Japanese cities and the seemingly very, very low barriers to entry for regular people to participate.
> An astute observation that allowing markets to operate without onerous licensing schemes and regulations often has wonderful upsides
I suspect you are reading too much into this line from the article. Japan is a country full of bureaucratic regulations to the extent that it's often stifling -- especially compared to the US.
The overall lowered barrier to entry is largely a result of zoning laws differences between Japan and the US. In the US, zoning laws are largely permissive (you CAN build this here) where zoning laws in Japan are restrictive (you CANNOT build this here). This leads to huge differences in urban planning where Japan favours mixed-used development whereas the US has huge swaths of contiguous blocks separating residential and commercial zones.
Add to that, the cost of visibility is higher in the US because transportation is already car-centric. Small shops thrive on pedestrian traffic, which there is little of in the US outside core urban environments. NIMBY culture has killed much of urban diversity in America.
North Americans: the city planners are ruining your life in ways you didn't even know could exist.
I'm all for reducing permit requirements, but realisitically these would be used by McDo and Starbux to externalize more costs while increasing their quarterly profit. Really, you need to have something that is trusted and rational without corporate corruption, which Japan nominally is. The US is going the opposite direction from that.
It's my understanding that houses in Japan are zoned to allow a percentage of the space to be used for a low-impact business, like the coffee shop in the article, and that bigger businesses are allowed on the bigger roads and in dedicated commercial/industrial districts. Also most houses can be converted to triplexes, too. This helps with density, encouraging more businesses nearby, less need for cars, better quality of social life, etc.
I see what you mean about the potential for abuse - maybe Big Money would buy all the houses and run small businesses from them? But regulations or taxes could be used to dissuade them. Theoretically, anyways.
I wondered if Japan does anything along those lines to avoid the problems you mentioned, but google ain't what it used to be and I wasn't able to find specifics.
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It's kind of the other way around: McDonalds will find a way to operate in pretty much any kind of environment. They have the deep pockets and knowledge to do so. They have restaurants across the world, including in very tricky places like Venice, Italy.
It's the small, local guy who with low margins who is not going to thrive in an environment where it's very difficult to get past all the hurdles to even start up.
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Vietnam has so much street food and coffee shops that McD and Starbucks cannot compete. That being said, Vietnamese zoning is pure anarchy and it would be too much for any Western country.
Japan has both McDonalds and Starbucks. Also, McDonalds is a franchise so "they" are not making most of the decisions here.
(Btw, I like US McDonalds better than Japan's, but maybe I'm the only one that thinks this.)
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American city planners influenced the construction of an elevated highway through the middle of Seoul in South Korea. Years later, that monstrosity was demolished. https://youtu.be/wqGxqxePihE
It's not really the planners given that planners have no real power and just do what they're told. The problem is that the elected decision makers are beaten down by established rich homeowners and shy away from and all conflict. So we have a cascade of shy conflict aversion as lazy and uninterested elected officials defer endlessly to planners, and planners who don't want to cause drama for their elected bosses and get themselves fired capitulate and do the safe thing that the wealthy established homeowner class pushes for.
One of the most known examples happened in Germany after WWII.
After the war Germany had lost quite a lot of businesses, infrastructure, industry and farming. Also obviously lots of manpower. Produce was scarce and inflation was extremely high, so it was actually quite difficult to purchase anything even though people had money. the Allied Forces introduced price control on almost all essential good in order to stop inflation. That obviously did not work at all and most goods were actually traded in the black market, so you could actually buy bread by paying with cigarettes.
A German economist, Ludwig Erhardt advised to remove all price and legal controls and to replace the old mark by a new one, but the Allied Forces only agreed to the latest, so a new currency was introduced, the Deutsche Mark, replacing the old Reichsmark. That had no effect whatsoever. However, Mr. Erhardt, from his position as Director of Economic Administration, decided unilaterally to remove of the price fixing and other regulations. And literally overnight, German streets filled with sudden and unplanned pop up markets, everyone started to sell anything they didn't need, just by the street or from their front yard.
In 1949 Erhardt became Minister of Economy for 14 years, and later, in 1963, Chancellor.
I think another factor is real estate: a population shrinking by more than half a million people per year eases some of the pressure on rent and land value...
When I lived in New York City (before COVID), I saw many local businesses get priced out of my neighborhood, only to be replaced by high-margin chains like Starbucks/H&M/etc. They were the only ones who could afford the rent!
Looks like https://maps.app.goo.gl/sa5JdGPMoZKiUiUP7 in Osaka is still going, though I remembered it being called "spacebar", a fantastic male for a retro gaming bar.
It's Space Station. Still a great vibe and going strong (thankfully), I visited it half a year ago.
Thank you - I rushed to the comments section to mention Melbourne's bars.
Re 'more permissive and less expensive' - I think there was a time (20 years ago?) when Melbourne city would give a license basically anyone. There were bars in old convenience stores, out the back of record stores & barbers. Just so much fun.
> without onerous licensing schemes and regulations often has wonderful upsides
If anything Japan is the opposite.