Free Riders on the Sidewalk

Restaurants extending onto sidewalks and streets for outdoor dining during the pandemic benefit property owners but impose costs on pedestrians, drivers, and neighboring businesses. Local governments are stepping in to regulate sidewalk and roadway dining.

Free Riders on the Sidewalk
  • Restaurants in Palo Alto, California have extended onto the sidewalk and street for outdoor dining during the pandemic.
  • The land grab benefits property owners more than the restaurants themselves.
  • The extension onto sidewalks and streets creates a negative externality, imposing costs on pedestrians, drivers, and neighboring businesses.
  • Local governments are stepping in to regulate the use of sidewalk and roadway dining.
  • A potential solution is to peg the rental for sidewalk and roadway use to the rental rate that the landlord charges.
Free Riders on the Sidewalk
Outdoor dining helps restaurants and their landlords at everyone else’s expense.