Los Angeles County's restaurant grading system is a good example of how governments should regulate businesses. It puts deficient restaurants on notice publicly; a "B" rating in the window is great motivation for them to clean up. And the system lets customers decide whether they want to take the risk of eating at a favored restaurant that's graded below an "A."
Here are the caveats: Such a system is a good one so long as the grading is based on a transparent set of guidelines that are objective, the judging is done honestly and fairly, and the system is free of political influence or tinkering by the politically correct or special interest pressure groups.
So far, the county's managed to base its grades mainly on sanitation and hasn't let the transfat police impose. It's a system that's worked nearly 10 years.
So it was good to see the county's Board of Supervisors last week unanimously decide to look into creating a similar grading system for nursing and convalescent homes.
Such a system "will ensure that families and the public are kept informed of the conditions and standard of care provided at convalescent homes and nursing facilities," said Supervisor Michael Antonovich, who made the motion. (He initiated the restaurant grading system in 1997.)
So long as the system is fair and honest, the judging is based on objective criteria and the supervisors resist any political tinkering, it should be a welcome addition for consumers and the industry.
On the other hand, government attempts to create affordable housing often seem to backfire. Rent-controlled buildings lead to slow decay or a raze-and-replace building frenzy. Inclusionary housing efforts have their own perils.
Last week, Benjamin Dachis wrote an interesting piece on the Business Journal's op-ed page that pointed out that L.A.'s inclusionary housing initiative will make housing more expensive generally. Since he's a new Angeleno facing house-price shock, he's not exactly pleased about that.
Inclusionary zoning typically means that some units in a new project are reserved for low- or moderate-income folks, but the problem is that the costs that are not paid by those residents are pushed to their neighbors.
Writers such as Dachis often are dismissed as stooges of developers. However, he's got numbers and real-world experience to buttress his argument.
He cited a study that indicated that prices in Los Angeles and Orange counties increased by $33,000 to $66,000 per home, and new homes in expensive areas went up $100,000 because of inclusionary laws.
What's more, inclusionary zoning laws tend to scare off builders. The study he cited prompted developers to build 17,296 fewer homes in the two counties during the seven years after the adoption of inclusionary zoning regulations. Fewer homes equal higher prices.
A more effective way to lower housing prices, he opined, would be to make the frightfully expensive land here cheaper by loosening some restrictions, which would increase the supply.
The desire to create inclusionary housing is understandable. After all, elected officials want residents to be able to live here. But if not done carefully, such efforts can lead to fewer and more expensive homes.
Charles Crumpley is editor of the Business Journal. He can be reached at firstname.lastname@example.org .
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