Property Rights

A Candidate for the Title of Dumbest Land-Use Restriction in the Nation

A DC law bars property owners from redeveloping land containing a full-service gas station, or removing them to make way for other uses.

|The Volokh Conspiracy |

This Petworth Shell gas station is the focus of a lawsuit challenging the constitutionality of a DC law forbidding redevelopment of property containing full-service gas stations. Google street view.

Many parts of the United States have harmful land-use restrictions. But a Washington DC law barring redevelopment of property containing full-service gas stations is a strong candidate for the dumbest such regulation, law even if it is far from the most damaging. What makes it so ridiculous is the lack of any remotely plausible justification for the rule, and the obvious benefits of repurposing some of these properties to residential uses in an era of high urban housing prices. The Washington Post explains it in a recent editorial:

There's overregulation, and then there's overregulation, D.C.-style. A District law, enacted decades ago and updated in 2014, effectively prohibits landlords from redeveloping any land containing a full-service gas station. If you own the ground under one of the city's four dozen or so such businesses, you're stuck: You can't raze it and put up condos, or sell it to someone who would; you really can't even reduce it to a "gas-and-go." Waivers are available from the mayor, with prior approval of the Gas Station Advisory Board, but that agency exists only on paper, having had no appointed members for the past 11 years.

This ludicrous situation resulted from arcane local political and commercial rivalries, dressed up in the language of consumer protection. Stubborn supporters of the law on the D.C. Council claim that the city needs a minimum number of a certain kind of gas station within its boundaries, lest D.C. motorists suffer. Never mind that Maryland and Virginia stations are just a couple of miles away, or that District households are about four times less likely to own a car than the average American household, according to Governing magazine.

If there's one thing we need to do to protect the environment, improve urban aesthetics, and make the nation's capital great again, it's preserving full-service gas stations! We can't let greedy, soulless developers tear down this vital part of our heritage, and make DC residents suffer the cruel indignity of filling up their tanks at mere self-service "gas and go" stations.

One such heartless capitalist recently filed a lawsuit arguing that DC's gas station redevelopment law is unconstitutional, because it violates the Takings Clause of the Fifth Amendment, which bars the government from taking private property without "just compensation." I hope he wins. But I am not optimistic he will do so, because current Supreme Court precedent makes it very difficult to win a takings claim unless the government has physically "invaded" the owner's property or adopted regulations that destroy all, or nearly all, of its value. However, a federal district court recently rejected the City's motion to dismiss the case. That does not mean the property owner will ultimately prevail, but does allow his lawsuit to proceed.

While the DC law is, as the Post put it, a truly "ludicrous" example of regulation run amok, it is far from the most harmful type of land-use restriction out there. That dubious honor goes to zoning regulations that massively inflate the price of housing and cut off millions of working and lower-middle class Americans from valuable job opportunities.

UPDATE: As some readers have suggested, DC's restrictions on the height of buildings are also awful, and cause far greater harm than the full-service gas station rule. The height restrictions, however, can be defended on the basis of at least minimally plausible aesthetic considerations (e.g.—we would not want to block views of DC's monuments, and the like), while the gas station rule cannot. Thus, the latter is even more indefensible than the height rule, even if less harmful.

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  1. “and make DC residents suffer the cruel indignity of filling up their tanks at mere self-serve stations.”

    A few questions –
    Does the DC ordinance prohibit the gas station owner from converting to self service?
    Does DC require all gas stations to be full service?

    1. I believe in this case “full service gas station” means one with a repair shop attached. https://tinyurl.com/y9e33la7

      1. Junkie – the full service gas station means one that has a repair shop.

        That makes the ordinance even more burdensome. Very few gas stations today have the ability to hire technicians with the expertise to work on cars, and the cost of equipment to maintain a quality repair shop is cost prohibitive. Back in the 60’s & 70’s, most teenage boys could perform most of the general maintenance on cars. Not so today.

      2. Well, that answers my question. I was going to ask how a land owner who owns a lot with a defunct gas station on it was supposed to know if it was full service or self service.

  2. Don’t gas stations contaminate the land around them?

    1. For a certain value of “contamination,” yes.

      1. That “certain value” is pretty small for all VOCs

    2. My guess based on stations in my vicinity is that the answer is yes. And that the cost of remediation is quite high. Once you dig in the ground, you must remediate. So the usual approach of owners is to fence the properties and in practice walk away.

      It would be nice if Mr. Somin investigated the entire issue before inserting a snarky post.

      1. I don’t understand what it is you think that Mr. Somin needs to investigate further. Supposing that all full-service gas stations have serious ground contamination that will eventually require expensive remediation, how does that justify forbidding redevelopment?

      2. So the usual approach of owners is to fence the properties and in practice walk away.

        I’ve seen a dozen gas stations replaced with condos, groceries stores, etc in both Minnesota and California. So many feel the extra cost is worth it for the property.

    3. Actually, for most modern gas stations (i.e., those less than about 25-30 years old), remediation costs are not terribly high. Remediation of older stations is more expensive primarily because those stations were around when tetraethyllead was still used as an additive to gasoline, but the EPA began a phaseout of all use of leaded gasoline (with the exception of aviation fuel) in 1986, and by 1991leaded gasoline was less than 1/2 of 1% of all sales in the U.S. Without any risk of lead contamination, getting rid of the volatile hydrocarbons is pretty easy – just burn them away – and toxicity is very low. And spillage has been all but eliminated by the newer pump nozzles. Full service stations that had a lot of spillage of motor oil present different problems, but even that problem was significantly reduced by efforts to recapture and recycle used motor oil. And again, while motor oil contamination of soil is tougher to get rid of than more volatile hydrocarbons like gasoline, the toxicity is pretty low.

      1. Interesting, and makes complete sense. There’s an area in the town where I grew up that used to be a gas station that’s basically perma-condemned after the station closed in the mid-1980s.

        Though I’d chalk up easier remediation with better containment materials and design (e.g. pump nozzles) than lack of lead – you seem much more the expert than I, but we put a lot of non-hydrocarbon crap into our gasoline, do we not?

        In the end, this sounds more like an obsolete regulation that should be changed. Not the dumbest thing in the nation.

        1. Not an expert, but I think a lot of the contamination issues were because they used to just directly bury single wall gas tanks. If you’re selling 1000 gallons a day while 1 gallon a day is leaking through a pinhole, it’s easy to miss the leak for a long time, so a lot of gas could leak before anyone noticed.

          At some point (ISTR a lot of tanks getting dug up in the 1990’s) they started requiring double wall tanks. IIUC (bearing in mind … not an expert) they have monitoring equipment to detect anything that makes it from the inner wall into the interwall space, at which point presumably repair would be required.

          There are not-so-good hydrocarbons in gas as well – benzene in the groundwater is the one I seem to hear about most often.

  3. If this is the dumbest land use restriction there is, then the validity of land use restrictions must be very secure indeed. One can easily come up with a plausible rational basis for it.

    Suppose gas stations have been closing in DC, and this has been causing difficulty for motorists. And since the economy is dependent on transportation, trouble for motorists is trouble for the economy as a whole. It would be entirely rationale (whether consistent with libertarian principles or not) to impose a moratorium on further gas station closing. And this would be a very rational way to do that.

    Sure, we could wait until the price of gas up to the point where it becomes worth opening a gas station again. But by then there may be no land suitable for gas stations left. There is a time lag during which the economy of the city could be disrupted.

    In addition, the land gas stations on can be very polluted. There are costs to closing existing gas stations and opening new ones elsewhere not fully captured in the market price.

    1. There are at least three completely unwarranted assumptions in that post. Probably more.

    2. This is not a moratorium on gas stations closing. Rest assured, they will close if not profitable. But it does dissuade closing so you have a point about a potential rationale, however tenuous.

    3. Suppose gas stations have been closing in DC, and this has been causing difficulty for motorists.

      Why would we assume a nutty thing like that? Has it happened anywhere, ever, where people live, that there has been a shortage of gas stations? Or car repair places?

      to impose a moratorium on further gas station closing.

      That’s not what this is. And, no, it’s not a rational way to preserve a sufficient number of gas stations, since what it does is pretty much guarantee that nobody is going to want to build a gas station, knowing that once they do they can never convert the property.

      Sure, we could wait until the price of gas up to the point where it becomes worth opening a gas station again. But by then there may be no land suitable for gas stations left. There is a time lag during which the economy of the city could be disrupted.

      It’s difficult to believe someone could be this economically illiterate. There is more of a chance of Hillary Clinton endorsing Donald Trump’s 2020 reelection bid than there is of all the gas stations closing.

      In addition, the land gas stations on can be very polluted. There are costs to closing existing gas stations and opening new ones elsewhere not fully captured in the market price.

      No, that actually is fully captured in the market price.

  4. Any person hearing about this law will immediately consider that gas stations are sitting on top of vast underground tanks that have been known to leak, and that years of leakage also occurs from ground level. That is, any person who gives a passing s**t about the environment. Ilya doesn’t, so this consideration never enters his mind. Instead he mindlessly declares it the “dumbest” land use restriction he’s ever seen.

    1. Did you actually read the article? Or the underlying law? Your concern about tank leakage (while true) is utterly irrelevant to this regulation.

      If there are leaky tanks, the right regulation is to fix them. Or if you think that existing leaky tanks are okay as long as they’re still in use (a silly rule but grandfathering is not uncommon), then the right regulation is to require remediation when those tanks are taken out of service.

      No environmental consideration is served by requiring existing leaky tanks to stay there forever, forbidding in the process any future remediation as the land is put to different use.

      1. “If there are leaky tanks, the right regulation is to fix them”

        So, you are asserting that this regulation does not exist?
        That each and every problem may have one, and only one, regulation to address it?

      2. You are not considering the possibility that the leakage is not detected until years after the fact, sometimes even after remediation has supposedly been finished. Also tanks often end up staying in the ground for years, forgotten, until . . .

    2. Right – it seems much more likely that the contamination would actually get cleaned up if repurposing were allowed.

      1. Your faith in land developers is touching.

      2. This theory does not jibe with a hundred years of observed practice.

        People who want to repurpose land that had an environmentally-shaky prior purpose tend to SAY they remediated it, sell it to new owners, and evaporate. A passing familiarity with the EPA Superfund would support this.

        For example, Love Canal in New York. Or, in my own hometown of Portland, OR, the former shipbreaking operations that left the bottom of the river contaminated.

  5. Something overlooked in the article and earlier comments is that the law was amended in 2014 to also include a prohibition on **discontinuing service**. The owner of the property can’t stop operating the business on the property, which is the main objection in the lawsuit complaint. The first cause of action is that this requirement “substantially hinders Plaintiffs from selling the Property, since no prospective purchaser has been willing to purchase the Property if such purchase includes the obligation to operate a full-service retail station on the Property in perpetuity.” The complaint also quotes the mayor expressing concern that the 2014 amendment violates the Takings Clause and that he only signed the bill because he “received assurances” that the City Council would correct the flaw in the bill, also stating: “Because this provision may violate the U.S. Constitution, it is a nullity without legal force and effect and I will not implement it.” (1/2)

    1. (2/2) Also, Prof. Somin writes: “We can’t let greedy, soulless developers tear down this vital part of our heritage, and make DC residents suffer the cruel indignity of filling up their tanks at mere self-service “gas and go” stations.” However, the ban doesn’t seem to be aimed at the gas part of the stations, but on other services because “full service” doesn’t mean an attendant filling the tank (like the dumb Oregon law that bans most self-service gas pumping), but:

      “[T]he term “full service retail service station” means any retail service station location which provides a garage, service bay, work area, or similar enclosed area for repairing, maintaining, servicing, or otherwise working on motor vehicles, or any service islands. Such repair, maintenance, and service work may include, but is not limited to, the installation or replacement of batteries, tires, fan belts, lights, brakes, water pumps, mufflers and other parts and accessories and the performance of motor oil changes, lubrications, wheel alignments, tune-ups, tire repairs, brake adjustments, and general repair and maintenance work and services.” D.C. Code 26-304.01(a)

      I’ve only ever passed the D.C. area on I-95, so I can’t relate to how big of a hassle this may cause residents, but it could be justified if the lack of auto maintenance services would create a big hassle for residents. IMO, it sounds like a dumb law, just not a candidate for dumbest law.

      1. I wonder whether stocking and installing batteries, but performing no other services, would let you qualify as full service. That could be done by someone with minimal skill and tools, and therefore wouldn’t cost much more than a normal gas station.

  6. I don’t know why we even still have a District of Columbia.

    Just shrink it to the Mall area and give the rest back to Maryland.

    Actually I do know why this hasn’t happened–congressional apportionment.

    No state wants to give up a representative that Maryland would probably pick up.

    1. “No state wants to give up a representative that Maryland would probably pick up.”

      Easy fix, up the number of representatives by 1.

  7. I’ve lived in one of the states that doesn’t allow self-service gas, so issues of gas-station-staffing are common.

    I’d like to point out a logical inference that has not been addressed.

    The limitations on gas station use have probably worked, in practice, to limit the number of gas stations built, since the disincentive to putting a gas station on your land in DC are so significant. This has the effect of limiting the choices of consumers… which makes owning one of the gas stations that DOES exist more profitable, because consumers have artificially-limited alternatives.

    1. Yes, except that DC is small, and it’s not hard to hop across to MD or VA to get unartificially-inflated prices.

      1. I wouldn’t go 10 miles across traffic just for gas. I mean, if I was over there ANYWAY and the gas station was right there, sure. But… Gee, I think I’ll spend an hour or two to save twenty cents a gallon? Nope.

  8. Zoning restrictions like this are more common than you think. But in smaller cities, and even some bigger ones, the approval process isn’t impossibly unworkable as it is here.

    1. The problem is that the elements of obtaining a variance are not what the stated elements of obtaining a variance are, but rather are whatever the person or persons in power decide that they are. Are you a friend of the Administration? Application approved! A critic? Well, no action is being considered at this time. Feel free to re-apply if things change…

  9. >Ihat makes it so ridiculous is the lack of any remotely plausible justification for the rule,

    One possible justification is that disturbing the site will make things worse and/or that proponents will overstate their ability to mitigate. There is, unfortunately, evidence for this position. E.g., the EPA’s own Animas River spill.

    Another possible justification is that the city wants to ensure a minimum amount of traveler services in the district.

    FWIW, the normal political economy explanations don’t seem to apply. Nearby residents hate gas stations because they are busy and smelly. Current owners would hate the rule because it prevents them from realizing a big pay day. Therefore, it’s likely something else…

  10. I think “we-need-to-ensure-enough-gas-stations”, while highly stupid, is actually a better and more appropriate justification than “we-think-it-looks-better-a-certain-way”

    Also, “four times less likely” uggggggggggh.

  11. The fact that multiple comments at Reason — and not just the usual suspects — question that this is THAT dumb is somewhat telling to me.

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