At Your Discretion

A City of Edmonton original podcast


Chris Hoit, owner, A1 Pawn Shop

Katherine Pihooja, Planner II, City of Edmonton


[Narrator] It’s San Francisco, in the late 1800s, height of the American gold rush. People from all over the world are flooding into California to stake their claim, but gold mining is really dirty work so a cottage industry of laundry starts to pop up.

But because of discriminatory mining taxes, a lot of immigrants were boxed out from taking part in the gold rush.

A lot of men who had come to California from China took to providing laundry services as a way to make a living during the boom. But that same discrimination followed those men, and soon the business they started to escape the discrimination, well, those businesses were subject to a new attack in the form of zoning.

Anti-Asian racism was rampant at the time, and as laundries came to be associated with Chinese immigrants, a rising course of people started all chanting the same message: “If we want our communities to be safer, we want to protect our jobs from immigrants trying to take them, we need to get rid of laundries, places where you get your clothes washed.” Between 1873 and 1883 the San Francisco supervisors passed more than a dozen zoning ordinances against laundries, specifically pushing those laundries out of white neighbourhoods and into industrial areas on the outskirts of town.

But it was after a fire at a Chinese laundry in 1880 that zoning hysteria against these businesses hit its apex with the passing of Zoning Order 1569, which required any laundry in a wood building to first seek board approval, a law that did not pay much mind to the fact that 90 per cent of buildings in San Francisco at the time were made of wood and that laundries aren’t uniquely at risk of fire as businesses go.

While that law was immediately deemed unconstitutional by lower courts, it was nonetheless enforced locally and was enforced almost exclusively against laundries operated by Chinese people. Lee Yick was the man who eventually conquered that zoning ordinance after the business he’d been operating for 22 years, a business that had passed numerous fire inspections, was shut down. And after Yick was arrested for refusing to pay a fine levied by that ordinance, Yick and his lawyers decided to pursue the case. They pursued it all the way to the U.S. Supreme Court. There, after poring over an ocean of statistics proving that the zoning was being enforced almost exclusively across racial lines, they found the law to be unconstitutional.

Zoning is complicated. The act of approving what things can be built or operated inevitably leads to saying what can’t be built. No one wants a refinery in the middle of a residential neighbourhood. But most of the time the lines between uses are a lot fuzzier. And you have to ask yourself really tricky questions about whether or not a law is zoning a certain kind of business out of a certain kind of neighbourhood or if it’s zoning the kind of people who operate and use that business out of a neighbourhood.

To understand this in a modern context, here in the city of Edmonton, you can’t really look at laundromats because most people don’t really feel one way or the other about a laundromat. Instead, we’re going to go to the corner of 95th and 112th, to a pawn shop called A1 Pawn, where we find its owner Chris Hoit.

[Chris] Okay. So I’m on the corner of 95th and 111th. I’m right on the corner. I’ve got storefronts. It’s kind of a run down looking building. When I bought this shop, I don’t think things had changed for 40 years, so I came in and put in new cabinets, cleaned it up, tried to get different products in here so it doesn’t look like just your typical pawn shop with guitars and tools. I don’t know. I’ve had lots of compliments on it being a lot nicer than it was in the past. It starts off, I get here, I open the shop. Most of the time people are coming here to pawn their stuff or sell their stuff and then I’m just dealing with them or online sales, and that’s about it. That goes from 10 to 6 and then I go home.

[Narrator] Someone comes into your store. What is, you know, like, the usual process for them pawning something?

[Chris] So we bring it in. We have to hold it for 45 days. That gives the pawn detail cops an opportunity to check the item, whether it’s through the serial number or some other sort of identification that’s on it. And if it is deemed to be stolen, they come and take it, I lose the money I pawned out on it, and the person that pawns it gets charged, potentially, with theft and fraud for bringing something in that didn’t belong to them.

[Narrator] Can you tell me a little bit about the anti-theft measures that are, I guess, like, unique to a pawn shop?

[Chris] Okay. So we have a reporting system that requires two pieces of government ID before they can pawn or sell. We require a pawn shop licence, a second hand licence, and a high-interest loan licence to operate. But, like I said, you can go to various flea markets, gold shops or jewelry shops and sell your gold with no questions asked, so if people are looking to get rid of stuff that’s questionable, they may not come to a pawn shop anymore like they may have in the past. We don’t have the same system as the police do for verifying where it came from, so, yeah, it happens. We lose stuff, and then whoever lost it gets it back. But had they taken it to sell it on Kijiji or any other place, they’re not going to get it back. It’s long gone.

[Narrator] Why do pawn shops have, like, these regulations when other businesses that buy and sell used stuff don’t?

[Chris] Because pawn shops in the past have had a shady reputation, so even though there’s hundreds of other places to sell their stuff, it seems the pawn shops get the bad rap. You can go sell your gold at a jewelry store or the flea market or Kijiji or marketplace or any of those places, but for some reason – and, sure, pawn shops were the only option to get rid of your stuff, so, sure, a lot of stolen stuff came in, but we’re more regulated than anybody else in the city as far as bringing stuff in to pawn it, trade it, sell it.

From people I talk to, they say it brings crime to the neighbourhood because it’s a place to fence your stolen items, and, like I say, that’s going back years and years and years of uneducated people. They haven’t educated themselves about how the pawn shops really work, so they’re basing it on what they’ve heard or what they read years and years ago. And, like I said, there are so many other places to get rid of goods that if you’re going to bring stolen stuff into a pawn shop you’re just asking to be charged with doing it.

[Narrator] As Chris just said, pawn shops are regulated – like very, very regulated. But in spite of this, they sit in a really unique category in the zoning bylaw.

We needed to sit down with a planner, someone who knows these rules better than we do, to figure out what that means and how it happened.

[Katherine]: My name is Katherine Pihooja. I’m a planner with the City of Edmonton zoning bylaw team. Our team is responsible for making amendments to the zoning bylaw to make sure it’s up to date and current, and we’re currently rewriting the entire bylaw for the city.

Historically, pawn stores have been regulated similar to second hand stores. We had use classes called minor second hand stores and major second hand stores, and then around 2012 there was a policy document that’s referred to as the Art of Living and in that document or plan it had a series of recommendations to sort of increase more opportunities for art-related activities throughout the city of Edmonton. They identified zoning was a barrier to some of those activities. Through that they realized that they wanted to create more opportunities for things like boutique second hand stores, similar to an antique shop or a bookstore and those sorts of things, but in order to do that they wanted to separate it out from pawn stores with the intention to add second hand stores into more zones. In doing this, we had to create a new land use specifically for pawn stores, and it sort of kept it in a limited number of zones and then a new use for second hand stores and increased it in more zones.

[Narrator]: So this is really important, and sort of at the crux of the way zoning can become…well… problematic.

Perceptions on second hand stores changed. The stores became more popular and were viewed as places with unique and artsy products. So the City created a policy to support and promote second hand stores as a part of their “Art of Living” document. And in an effort to have more of these second hand stores throughout Edmonton, the City looked at how they’re regulated and how they’re zoned.

Like Katherine said, up to this point second hand stores and pawn stores were zoned in a similar way. And then this Art of Living policy comes along, and something shifts.

[Katherine]: They both were discretionary uses, and then where they sit right now is pawn stores are still discretionary in a number of commercial zones but second hand stores have more zones, more opportunities. They’re still discretionary in a number of them, and there’s a few, maybe three zones, that they’re a permitted use, meaning that if they meet all of the regulations the development permit is approved and no notification is sent to the surrounding neighbourhood.

[Narrator]: Katherine just used a really critical term – discretionary use. And understanding what a discretionary use is and how it affects development is important to understand zoning and the development process.

Katherine explains this really well.

Katherine: Sure. A discretionary use – so in each zone we have a list of permitted uses and discretionary uses, and discretionary uses are activities and land uses that are generally compatible with the other types of uses that are happening within a zone. But they could have some impacts depending on their context. What we do with discretionary uses is we look at the specific context it’s being located in and see what sort of impacts it could pose to other uses on the same site or on adjacent sites. Then the development planner can refuse it or they could approve. They could approve it with conditions. And they might also look to higher policy and plans to see if there’s anything in addition to the zoning regulations that they should take into consideration in making that decision.

[Narrator] Ok, so let’s unpack this.

Right now, the Zoning Bylaw has two different “types” of uses – discretionary and permitted. Each zone has a list of these uses.

Let’s look at a specific zone to understand this – the agricultural zone. The City’s zoning bylaw lists “rural farms” as a permitted use in agricultural zones, which makes sense because an agricultural zone is intended to support agriculture and rural uses.

But it lists community recreation centres as a discretionary use.

These are clearly different types of uses and separating them feels right. A community centre is big, busy, and has a lot of people doing lots of activities. A farm, by contrast, can be big and have lots of activity, but most of the activity is centred around animals and harvesting.

So if the intent of the agricultural zone is to protect and enhance farming, we want to minimize how much we disrupt the land. Edmonton has limited agricultural land and introducing other non-agricultural uses fragments the land.

Research shows that large tracts of farmland become less productive when fragmented and converted for other non-agricultural uses or when nearby parcels are fragmented and converted. There is a clear land-use impact in this context.

Now, if a development officer receives a development permit for a community centre in an agricultural zone, they don’t necessarily need to approve it. They can look at a number of things, including the location of nearby farms and if the centre would disrupt farming activities.

But then where’s the difference between pawn stores and second hand stores. They were zoned the same way… Until perceptions changed. And suddenly, there’s a demand for more of this one type of business, but not a demand for the other.

So what does the City do? It separates the uses.

Now, in some zones where both second hand stores and pawn stores used to be discretionary uses, second hand stores are allowed as of right, but pawn stores are at the discretion of the development officer.

I’m going to introduce one more concept, in case you weren’t confused already. Notification.

[Katherine]: But the difference between discretionary and permitted use is that discretionary uses are subject to notification, meaning that a number of properties within proximity to that site are sent a letter or notification letting them know that that use has been approved and they have the opportunity to appeal that decision to the Subdivision and Development Appeal Board. It creates a lot of sort of uncertainty in that process because it’s not very clear if the development planner is going to approve it but then also this other process in which case a neighbour could appeal it and it extends timelines and just creates a lot of uncertainty for those particular uses.

[Narrator]: Anytime a development officer approves a development permit for a discretionary use, all property owners within 60 metres of the proposed development receive a letter. So does the president of the local community leagues and the executive director of the Business Improvement Area.

Why are they notified? Because they can appeal the development officer’s decision. They can go in front of the Subdivision Appeal Board and argue their case. And the subdivision appeal board can overturn the development officers decision based on neighbours’ arguments.

Jenny: I think the lack of uncertainty is really interesting, but when we’re talking about discretionary versus permitted and what the differences are between what is, you know – when we made this separation, obviously we want to have more second hand stores and boutiques and all of that fun stuff. What are the differences though between pawn stores and these second hand stores

Katherine: Second hand stores often include the retail sale of used goods and pawn stores also include the retail sale of used goods but they also accept used goods in collateral for a loan. There’s a financial aspect to that activity. When looking at those activities, it is more difficult to determine the land-use impacts between these types of activities because they have such similar activities happening on the site.

[Narrator]: So let’s put all this together. If we strip away all of the cultural associations, a pawn shop has similar land-use impacts as a high-end store selling used books or antiques. It just attracts a different clientele.

But at the end of the day, a person walks in with money and they walk out with stuff. The thing that makes a pawn shop seemingly unique is that you can walk in with stuff and walk out with money. But does that really make them any different than an antique store or a second hand shop, a video game store that buys used games or Craigslist for that matter?

Yet they face unique restrictions coming from Edmonton’s 1960s era zoning code with a development permit that’s often up to the discretion of whichever City employee happens to get the file. You see, at some point, as second hand stores got more and more popular and got more and more attractive while pawn stores didn’t, we started zoning those differently.

Now, you can put second hand stores in more places, even though they’re kind of indistinguishable from pawn stores. So we asked: “Really, what is the difference between these two businesses?”

But there is a difference. It’s not in the bylaws or the rules, but there is a difference between these things. We can all kind of intuit it. It’s who uses them and why. A lot of the time the people using pawn shops are using them like banks. Need a loan? Need money right now? You can pawn something. Get the money today and pay it back to get your stuff back later, which is just giving collateral to get a loan. It’s just that it’s banking for people who need a kind of banking service that banks don’t provide.

[Chris] All of a sudden it’s halfway through the month and they have nothing to eat or whatever so they come and pawn their phone or their computer or whatever, a video game system, whatever they have that has some value. At the end of the month they come back and pick it up, or two weeks later or whenever they come across money. And if they don’t pick it up, then obviously I hold it and eventually sell it. So I would say they’re mostly from the neighbourhood, and I find from my experience that the other shops that people are going to go to is the closest shop. Unless they’ve had a bad experience, they’re going to go to the closest shop or the one that’s maybe open later than me because I close at six. There are lots that are open a little later in the city, so it depends when they need the money.

[Narrator] Which means that even if the business functions identically to an antique store, which we allow in a lot of different neighbourhoods, even if the users are using it like a bank, which we also allow in a lot of different neighbourhoods, a pawn shop is allowed in very, very few neighbourhoods.

So it gets clustered into distinct areas, meaning that folks from other neighbourhoods will never interact with them and those stigmas can never break down and the people who use and live near them get more and more isolated. It creates this feedback loop of stigmatizing and isolating people and the areas where they live.

[Chris] Until you get involved in this business and you start meeting these people in these areas, you really have no clue. I had no clue about the drug addiction, the gambling addiction, anything that drives people to do what they do. Like I said, I had no clue. Some people have no interest in even knowing anything about these people. They don’t know what got them to where they are in life. So I generally, with a lot of my customers – I know a lot about these people, and I sit and think: “Well, you know what? If that happened to me in my life, what would I be like? What would I turn out like?” You never know until you’re put in the same situation these other people are if that makes any sense.

[Narrator]: Let’s be clear. This wasn’t done on purpose. The City didn’t set out to say let’s make it difficult for pawn store to set up shop… but in making it easier to set up a second hand shop, without doing the same to pawn stores, you can’t help but ask – what’s the real difference? And, if there is a difference, is zoning the most appropriate tool for addressing it?

You’re not going to solve poverty by regulating pawn shops differently, but by making certain businesses with similar land use impact discretionary rather than permitted, we’re letting the way that we feel about those businesses impact where they can go. And we can find ourselves in situations like this, where patterns and discretion end up reinforcing other patterns in society.

That’s why this episode started with the Chinese laundry example. San Francisco in the 1900s purposefully used zoning to harm a business type and a people. We’re not doing that here – we’re not intentionally harming anyone. But when you take an equity lens on zoning and zoning regulations, you need to consider the unintended consequences of what we regulate and why.

[Chris] Oh yeah. I can tell you a story. A lot of them are drug related. He’s got to be in his 70s, and I know he’s been pawning at a shop for years and years and years and basically all they know is his name. So I sat on the bench with him one day and was talking to him and just kind of asked him, like: “What got you to where you are in life?” And he told me that his wife and son went out on, I think it was, Christmas Eve and got killed by a drunk driver, and he says to me: “Chris, the only thing that takes the pain away is drugs.” Well, he feeds his drug habit by pawning stuff. So his house, his car, all the stuff he had that he worked so hard to get over the years, he just pawns it or sells it to support his drug habit to take the pain away from what happened. So put yourself in his shoes and think: “What would I do?” You don’t know what you’d do.

[Narrator]: Zoning isn’t going to solve what kinds of businesses are or aren’t stigmatized. It’s not going to solve what people think of a certain neighbourhood. It’s not going to change how we see people. It’s zoning bylaws. But what it can do is make sure that we’re not baking all of those biases into laws. We can make sure that the rules governing how we use land are fair and predictable for everyone regardless of where you live or what business you’re in or what business you frequent.

My name is Jenny Renner, and we’ll catch you on the next episode of Making Space, where we’re discussing 15-minute cities. Thanks for listening.