Reading the tired, silly claims of left-wing, anti-Wal-Mart activists generally makes me yawn. But it annoys me to see some of my former neighbors from my hometown of Chanhassen, Minnesota, going around trampling on property rights and opposing the liberalization of the real estate market.
Let’s start with a demographic profile of modern Chanhassen. When my parents moved our family there in the early 1990s, large parts of the city were still undeveloped. It was on the fringe of the southwestern Minneapolis suburbs. Since then, the city has developed rapidly due to its close proximity to the Minneapolis-St. Paul core — leading to population doubling over the past two decades, with most of the growth coming from upper-middle class families with children. According to the 2010 Census, households are quite wealthy, with 48.6 percent of them earning at least $100,000 annually. Only 2.1 percent of families are below the poverty level, with the median family income hovering around $113,000 annually. High-quality housing, good schools, and recreational amenities abound. Things are so great in Chanhassen that Money magazine ranked it #2 on their 2009 list of Best Places to Live in the United States (it appeared at #10 in the nation in 2011).
Locals are fond of these mostly arbitrary rankings, almost as fond as some of them are in believing Wal-Mart will destroy their quality of life if the mega-retailer is allowed to open a store in Chanhassen. After several hundred angry, presumably wealthy NIMBYs showed up at a recent Planning Commission meeting to demand that a site currently occupied by a large vacant building not be put to productive use (yes, you read that correctly), the notoriously anti-development Commission denied the Wal-Mart request for a necessary upzoning (a designation that permits more intense development). It is now up to the City Council to decide whether or not it will listen to the city’s planning apparatchiki.
A couple of the irate NIMBYs, after finding a free website template online, created an online activist group called “Chanhassen1st.” For a city long known for its support of conservative Republicans (George W. Bush was the first president to visit Chanhassen in the run-up to the 2004 election and put on a huge rally for supporters), I found it odd that the Firsters were regurgitating the faux-arguments manufactured by multi-million dollar astroturf organizations funded by the United Food and Commercial Workers union (due to Wal-Mart ostensibly believing the same thing about unions as Whole Foods founder and CEO John Mackey: “The union is like having herpes. It doesn’t kill you, but it’s unpleasant and inconvenient, and it stops a lot of people from becoming your lover.”) and citing a propaganda film by far-left “documentary” filmmaker Robert Greenwald (perhaps most famous for directing the 1980 Olivia Newton-John box office flop “Xanadu”). Oh, and a barely-sourced article written by a North Carolina State University economist that does not even conclude that Wal-Mart’s entry results in net negative economic effects.
The Firsters rely heavily on the assumption that Wal-Mart harms small businesses. The economic literature on Wal-Mart expansion does not support their claim. The most robust econometric analysis to date [PDF] found that the “claims about harm to the small business sector are statistically unfounded, and should be given no weight in future political and court decisions regarding openings of new Wal-Mart stores.”
Another study [gated] focusing on the impact of Wal-Mart’s entry to the food market, authored by MIT economist Jerry Hausman and Ephraim Leibtag of the U.S. Department of Agriculture, was published by the highly regarded National Bureau of Economic Research. Drs. Hausman and Leibtag found that “Wal-Mart’s entry into a new geographic market creates a direct price effect by offering a lower price option to consumers and an indirect price effect by causing traditional supermarkets to lower their prices because of the increased competition.” Generally, consumers prefer lower prices, and Wal-Mart would directly be competing with the existing Target big-box store directly across Highway 5 (which opened to great fanfare — and which offers essentially the same products at slightly higher prices: good PR and targeting suburbs over rural areas has convinced a lot of suburbanites that Target is somehow a “classier” big-box retail mega-chain) and an existing supermarket chain store just down the road. It would also be approximately two miles from an interchange with U.S. 212, an uncongested freeway that was extended into the city several years ago.
Furthermore, Hausman and Leibtag go on to note that this greatly benefits lower-income consumers as opposed to wealthy consumers, most of whom will continue to expend more of their food budgets on luxury items, and that “a significant decrease in consumer surplus arises from zoning regulations and pressure group tactics that restrict the entry and expansion of supercenters into particular geographic markets.” Wealthy Chanhassen residents, who likely shop at the nearby high-priced Lakewinds Natural Foods and/or luxury supermarket Byerly’s, won’t be hurt very much by the NIMBYs intent on keeping Wal-Mart out of the market. But lower-income consumers who can’t afford such expensive tastes certainly will be hurt.
But perhaps the most obnoxious and breathtakingly misinformed opinion expressed: “Echoing a theme heard throughout the evening, Fisher said Chanhassen wasn’t named a top place to live by national magazines by lowering standards for development.” Like I said, Chanhassen residents are very protective of their arbitrary quality of life rankings. But what is interesting is that Chanhassen, which has never been ranked first in the nation by Money, lost out to neighboring #1 Eden Prairie last year. Best Place to Live 2010 Eden Prairie, if my buildup in this paragraph hasn’t hinted to you, has — wait for it — wait for it — its very own Wal-Mart Supercenter! I guess the Money editors didn’t feel Eden Prairie had reduced its “standards of development” by enough to kill its quality of life ranking. Again, Chanhassen Firsters, that Money ranking for Wal-Mart-friendly Eden Prairie was NUMBER ONE IN THE NATION.
Wal-Mart has lobbied willing municipalities and counties for eminent domain condemnations and and special tax privilages in the past (although so has Target, and virtually every major big-box chain). These actions have been rightly criticized. The city should not grant any special subsidies to Wal-Mart that are unavailable to other private businesses (or rather, Chanhassen shouldn’t be in the business of subsidizing any business in the first place). And, if the footprint is significant enough, the city might wish to require the mega-retailer pay for necessary upgrades to public infrastructure. But for some reason, the NIMBYs believe that they better understand retail store economics than the world’s largest retailer and that they deserve some say in how private development moves forward. “Democratizing” development is by definition anti-market and the harmful economic distortions created by such political interventions can be quite large. These distortions, like most market distortions, disproportionately harm lower-income households.
This makes me wonder if Chanhassen’s residents are falsely regarded as fiscally conservative supporters of the most compassionate economic system: capitalism. To me, they appear to be nothing more than vicious, petty, anti-consumer, land-use socialists. Here’s for hoping that a principled silent majority of residents is just asleep at the moment and that they wake up soon.