Neo-Prohibitionists Rule San Francisco

by on April 11, 2017

Give Cities More Liquor Licenses!

San Francisco Assemblymember Phil Ting has introduced legislation to create 25 new liquor licenses for seven neighborhoods outside the city’s core tourist districts. That state legislation is even needed for neighborhood restaurants to serve liquor reflects a sad truth about progressive San Francisco neo-Prohibitionists still control local and state alcohol policy.

That’s right. California has legalized marijuana and markets its fine wines worldwide, but the state is still controlled by an outdated 1939 law restricting liquor licenses to 1-1000 residents per county.

What is the correlation between population and liquor licenses? There is none. But those opposed to liquor on moral grounds or due to alcohol abuse don’t need to show a connection. After all, they like the law just as it is.

The impact on restricting liquor licenses in San Francisco is particularly severe: by restricting supply, the cost of obtaining a liquor license on the private market now ranges from $250,000-$300,000. Such a cost is unfeasible for an Ocean Avenue or Noriega Street neighborhood-serving restaurant, which explains Ting’s important though modest bill.

Why do Californians allow 1939 rules to govern today’s restaurants?  Restaurants cannot legally operate by 1939 labor standards, so why are they subjected to 1939 alcohol rules?

San Francisco Opposed Prohibition

San Francisco has long been pro-alcohol.

In California’s November 1914 election, 83% of San Francisco voters opposed a state ballot measure authorizing a ban on liquor (the Prohibition initiative won statewide). As I describe in my book on San Francisco’s Tenderloin, the Uptown Tenderloin led the city’s opposition to the Prohibition measure with 90% voting no. North Beach, populated by many wine-drinking Italian immigrants, also strongly opposed the Prohibition measure.

Prohibition was barely enforced in San Francisco, and nobody had trouble getting a drink in the Tenderloin from 1920-1933 when the constitutional amendment known as Prohibition was in effect. The Tenderloin, North Beach, SOMA and downtown have a more than a century unbroken history of restaurants serving both food and liquor.

Alcoholic drinks are now often the economic lifeblood of restaurants. Talk to any restaurant owner about where there profits come from. It’s not much from food. Alcohol offers the biggest profit margins for restaurants relying on dinner business.

So how is it possible that in a state where laissez-faire Republicans like Reagan, Deukmejian and Pete Wilson all served two terms as Governor that we still have a neo-Prohibitionist limit on alcohol licenses? When former State Senator Mark Leno tried to get San Francisco a measly 28 new licenses last year (the city currently has only 812) he got swamped by opponents. He ended up only getting the city a whopping five new licenses, and you would not believe what he had to go through to secure that paltry amount.  Leno’s bill set up a model whereby new licenses would be sold by the Alcohol Beverage Control Board directly to businesses for $13,8000 and made non-transferrable.

Why did Leno’s common-sense and ridiculously modest request get legislatively stomped? Because supporters’ of more licenses are not engaged in the process. Meanwhile, Neo-Prohibitionists prioritize stopping liquor licenses.

Most people are not aware that the Alcohol Beverage Control Board (ABC) was created in the 1950’s primarily to enable San Francisco’s police to close down the Tenderloin’s growing number of gay bars. That’s where the city’s GLBT movement got started. The State Board of Equalization had previously controlled liquor sales, and it upheld the rights of gays to socialize in bars. That led to a push by San Francisco’s state legislator to create the ABC. I know that sounds hard to believe, but as I detail in my book, it is absolutely true.

Promoting Economic Vitality

No other state charges so much for liquor licenses. New York City businesses need only pay $75,000. These states understand that customers of neighborhood businesses also want a drink with their meal and that these establishments cannot afford a $300,000 license fee.

The current system particularly hurts neighborhood revitalization efforts, where new restaurants are less likely to be able to afford the steep liquor fee. Meanwhile, upscale areas—where license costs are no barrier—get the benefit of having restaurants serving liquor. It’s a classic case of the rich getting richer—yet the debate has not been properly understood in this way.

Phil Ting and State Senator Scott Wiener both understand the unfairness of the current system. Both want change. But San Franciscans need to show these officials that if they move forward with a stronger bill next year, the people will be behind them.

California should be able to assemble a political coalition capable of winning major legislative changes to the 1939 law. I am not aware of past efforts to build such a grassroots coalition. At the worst any state change could be conditioned on a local ballot measure approving increased licenses, which I think would easily pass in San Francisco.

Phil Ting typically sponsors practical bills that can actually get passed. And his proposal to add 25 new licenses covering seven neighborhoods is consistent with this.

But that’s nowhere near enough for a vast stretch of San Francisco that is underserved for restaurants serving liquor.  And it will be even more inadequate if we can finally get more housing built in these communities, which will add to the demand for liquor licenses.

We can end Neo-Prohibitionism in California. And, as is often the case, San Francisco may have to take the lead.

Randy Shaw is Editor of Beyond Chron. He is the author of The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco


Randy Shaw

Randy Shaw is the Editor of Beyond Chron and the Director of San Francisco’s Tenderloin Housing Clinic, which publishes Beyond Chron. Shaw is the author of four books on activism, including The Activist's Handbook: Winning Social Change in the 21st Century, and Beyond the Fields: Cesar Chavez, the UFW and the Struggle for Justice in the 21st Century. His new book is The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco

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