The economics of vendor permits
Julia Moskin reports on Manhattan street vendors:
Of all the gray areas for food vendors â€” who are regulated by a cluster of agencies including the Department of Consumer Affairs, the Police Department and the New York State sales tax authority â€” permits are the murkiest. The Health Department set the number of full-time food vending permits at 3,100, in 1979. (In the fall, the City Council will vote on a proposal that would increase the number of permits to 25,000.)
The $200 permits are valid for two years and can be renewed indefinitely by mail. Their black-market value is tremendous: up to $15,000 for two years, according to a report released Tuesday by the cityâ€™s Department of Investigation. The new vendors are openly questioning the black holes of the system. â€śEvery day, the city is leaving thousands of dollars on the tableâ€ť by not taking control of the illegal trade in permits, said Mr. Yang, of the Cravings truck.
Yes, the permits are probably being priced too cheaply — there’s no reason why they shouldn’t move to a system closer to that of taxi medallions. But the other thing being priced far too cheaply here is prime midtown street-level real estate. Note what happens when the city does start auctioning off vendor permits: the food-vending rights to the north-side entrance of the Metropolitan museum sold for $362,201 per year, rising to $384,371 in the final year of the five-year contract.
The kind of fights detailed in Moskin’s article are inevitable when a highly-valuable resource — street parking — is massively underpriced or even free. The city should start making vendor permits location-specific, and then auctioning them off.