Happy Tuesday, and welcome to another edition of Rent Free. In this week’s issue, we have stories on:
- Another court loss for San Francisco’s “empty homes” tax.
- Spain’s housing revolt.
- Another religious land use case that made it to the U.S. Supreme Court.
But first, our lead story on the zoning angle behind a feel-good story about the world’s oldest bartender.
Great-Grandfathering in Basement Bars
The Washington Post yesterday profiled Irvin Koch, who, at the ripe old age of 103, is considered to be the world’s oldest bartender.
The centenarian’s establishment, Irv’s Basement Bar, is quite literally in the basement beneath his home in Anne Arundel County, on the outskirts of Baltimore. The bar came with the house when Koch purchased the property in 1963. The cash bar proved lucrative enough that he’s kept operating it ever since.
If running a bar out of your basement sounds like a fun idea, you are unfortunately out of luck. Koch’s dive is Maryland’s last true “basement bar”: an establishment that has more or less been killed off by modern zoning codes.
As a lawyer for the county’s liquor board told Baltimore’s The Sun in a 2014 profile of Koch, “You can’t do it these days. No one could come in now and do the same thing.”
Koch’s own establishment only survives because it was up and running long before the county’s modern zoning and building codes were adopted. It’s thus been grandfathered into the long list of county and state regulations adopted over the decades.
It’s almost comical to count all the ways that Koch’s existing business would be illegal today. Going through the list is also educational. It sheds light on the pieces of red tape silently at work blocking interesting “third places” like Irv’s Basement Bar.
Per the Post‘s history, Koch’s farmhouse was built as a private summerhouse in 1912, some four decades before the county adopted its first comprehensive zoning ordinance in 1952.
That initial lack of zoning allowed the residential home to be converted into a commercial inn with the basement bar sometime before Koch’s purchase of the property. Today, that couldn’t happen.
The county’s zoning code places Koch’s property in an R-2 low-medium density zone. Per the code, this zone is designed to create areas of exclusively suburban single-family housing. As such, a long list of commercial uses is flatly prohibited, including “taverns.”
That would be enough to block Koch’s bar in its current form. He could potentially try to convert the property into a country club, which is allowed in R-2 zones as a conditional use requiring special permits. Alcohol uses as an accessory use are also allowed as a conditional use.
Even if that were possible, the fact that Koch lives in the house above the bar would pose additional regulatory problems.
Anne Arundel’s zoning code prohibits all home-based businesses that are not expressly permitted, and a bar is not one of those permitted businesses. Moreover, home-based businesses are not allowed to sell products that are not produced on site.
So even if Koch could somehow get his bar classified as a country club or other permitted R-2 use, he might have to move out of his longtime home so that it’s no longer a primary residence subject to home-business restrictions.
While I’m not sure what the parking situation is at Irv’s, the county’s zoning code requires restaurants and taverns to have the greater of one parking space per three seats or one parking space per 200 square feet.
That could require Koch to pave over his lawn, even if his bar doesn’t need that many spaces to accommodate his collection of regular customers.
Beyond the zoning code, Anne Arundel County also has a building and fire code with specific requirements for how taverns must be built and operated. Odds are that Koch’s 114-year-old house doesn’t completely conform to those code requirements either.
The customers’ bras hanging from the wall might not be the county health department’s favorite thing in the world.
All of that is to say, there’s a reason that Koch’s bar is the last of its kind.
What’s notable is that, even though zoning and building codes stop Koch’s bar in eight different ways, everyone seems to love it.
In the media profiles, regular customers give glowing testimonials about it being their favorite bar. The dive’s walls are covered in graffiti from tourists who traveled to Maryland just to have a drink there.
No one has a problem with Irv’s bar. Even the regulators seem to have given it a lot of grace. Its grandfathered status notwithstanding, one could assume that officials could find some reason to more tightly regulate Koch’s establishment.
As it stands, no one has a problem with the basement bar, and no one is in a rush to force it to comply with all the rules a normal bar would have to.
If that’s true, one wonders what’s so desirable or necessary about applying all the zoning regulations that would kill off Koch’s bar to every other business in the county.
Surely a broader amount of regulatory forbearance would allow for a lot of new, interesting, and novel businesses like Irv’s to spring up.
Vacating San Francisco’s Vacancy Tax
San Francisco voters passed a special tax on vacant homes back in 2022, but its actual implementation has been stalled in the courts ever since.
Now it looks like the tax, which was supposed to start raising revenue in 2024, will never go into effect. Earlier this month, a division of the state’s appeals court upheld a lower court ruling that had blocked the tax.
The plaintiffs in the case were property owners who argued a tax on their empty or irregularly occupied properties violated a long list of their legal and constitutional rights.
In an opinion issued earlier in September, Justice Kathleen Banke, joined by two other justices, agreed that the vacancy tax was superseded by a state law that guarantees landlords the ability to withdraw their property from the rental market.
San Francisco had tried to argue that it was not interfering with that right. Rather, it was merely taxing people for exercising it.
Banke found that unconvincing, writing, “As the City apparently sees it, while a property owner, indeed, has the right to exit the residential rental business, they have no correlative right to remain out of that business and can be pressured back into it on pain of significant taxation. This circularity in reasoning is a patently unreasonable reading” of state law.
Thus far, San Francisco has declined to say whether it’ll appeal the ruling to the state Supreme Court. For the time being, the tax is dead.
For a more detailed discussion of the case, see my full piece from last week. Here is also a piece on the larger issue of vacant housing in expensive cities.
Spain’s Housing Revolt
In less feel-good news, Spain is experiencing increasingly riotous protests after the country’s parliament rejected legislation that would have imposed emergency rent controls and eviction protections.
In the city of Valencia over the weekend, protesters were dispersed with rubber bullets and tear gas after they’d breached a security perimeter at a real estate conference, reports the Associated Press. In Madrid and Barcelona, demonstrators have turned public squares into protest encampments.
The trigger for these protests was the eviction of an 87-year-old pensioner by the real estate company that had bought her once rent-controlled apartment and then substantially raised the rent.
That eviction came amidst rising anger in Spain over increasing rents and anemic economic growth.
The Spanish Parliament’s narrow rejection last week of emergency rent controls and eviction moratoriums proposed by the country’s left-wing minority government accelerated the street action.
Those provisions have since been approved by lawmakers, and Spain’s prime minister has called for early elections.
Do You Really Need a Shrine That Big?
The U.S. Supreme Court has agreed to hear a religious land use and liberty case involving Catholic priests in Kentucky who were denied permits to build a grotto featuring a Marian shrine.
Zoning officials in Park Hills had initially granted the Missionaries of Saint John the Baptist a conditional use permit to build their planned grotto. That permit was then challenged by neighbors who worried about the traffic impacts of the shrine.
A lower court sided with the neighbors and rejected the shrine, as did the Kentucky Supreme Court, which reasoned that zoning restrictions on a shrine’s size are not a substantial burden on religion.
The priests appealed that decision, arguing that the zoning restrictions are a substantial restriction on their religious mission in violation of federal law that protects religious land uses.
This will be the second religious land use case the Supreme Court has agreed to hear recently. Back in June, it also agreed to hear a case stemming from an Ohio city’s restrictions on Jewish prayer services in a private home.
Quick Links
- Property owners who are suing the Rent Guidelines Board have released texts showing communication between board members and the Mamdani administration in the run-up to its approval of a rent freeze. The plaintiffs are alleging in their lawsuit that the allegedly independent board ignored evidence and made a politicized decision at the behest of the mayor to freeze rents.
- New real estate grift just dropped.
- New York City can proceed with its second home tax for now.
- Voters in Redwood City, California, will consider a rent control ballot initiative.
The post The 'World's Oldest' Bartender's Very Illegal Basement Bar appeared first on Reason Magazine.
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