There is an epidemic of local economic regulations sweeping our state, stifling economic freedom.
Overbearing regulations have driven ride sharing companies like Uber and Lyft away from Corpus Christi, Midland, Galveston, and Austin. Short-term rentals have been targeted by city regulators in Fort Worth, San Antonio, and Austin, among others. Dallas and Houston have passed ordinances attempting to curtail credit access businesses.
To that point, Governor Greg Abbott has lamented what he called “a patchwork quilt of bans and rules and regulations that is eroding the Texas model” of economic success. Heeding Gov. Abbott’s call to action, Republicans in the Legislature acted last session to quash municipal prohibitions on oil & gas production, passing a bill that ultimately forced the City of Denton to repeal its hydraulic fracturing ban.
Despite that victory, the list of municipal regulations continues to grow every year. Local economic regulations are a problem because they create an opaque patchwork of what is and isn’t allowed, and often when the state already regulates (or has chosen not to regulate) these activities. It’s permissible to pick someone up for an Uber fare in Houston (which you are allowed to do under the state’s Transportation Code). On the other hand, it’s impossible to ride Uber in Austin because of local regulations.
Conversely, rent out your home in El Paso without fear of penalty (or of contravening the state’s Property Code), but do the same thing in Fort Worth without a city bed-and-breakfast license and face the consequences of Fort Worth STR regulations.
The same can be said of every local economic regulation: bag bans ignore the fact that the Texas Commission on Environmental Quality is charged with achieving the “safe management of waste” and yet has declined to regulate plastic bags. Denton’s hydraulic fracturing ban contravened the primacy of the Railroad Commission of Texas in oil and gas regulation. The list goes on.
Every new tier of regulation expands the footprint of government and distracts from the core responsibilities of cities. Local government works best when it is focused on essential services, including policing, fire departments, sanitation, and roads. Problems begin when cities start to move beyond these core responsibilities and into the sphere of economic regulation.
It bears pointing out that, in addition to regulating short-term rentals and plastic bags, in recent years the city of Austin alone has considered or enacted proposals to regulate backyard chicken coops, barking dogs, smoke from barbeque joints, and to require single-user bathrooms to be gender neutral, to name just a few.
Every regulation a city enacts has a cost and it is up to the state legislature to strike the appropriate balance: local control should not be used to quash economic freedom.
In Texas and across the nation, state legislators are positioned to slow the epidemic of municipal regulatory creep. By forcing Denton to repeal its hydraulic fracturing ban, Texas has shown the way forward. In the current legislation session, proposals are on the table to create a state-level regulatory framework for ridesharing and short-term rentals that would overturn the most egregious municipal regulations.
On March 21, the Texas Conservative Coalition Research Institute (TCCRI) will host an Economic Freedom Policy Summit in Corpus Christi to discuss these issues with featured guest Governor Greg Abbott and Chairman Todd Hunter (R-Corpus Christi). The discussion will focus on how the state can create an environment in which innovation and competition can flourish, and then get out of the way. That may mean dragging cities and their inspectors out of the way, too.