Zoning for the Future of Automotive Fueling

This week, news broke that, for the first time in America, a gas station has chosen to go all-electric. The country and the world gasped. “How was this not a thing already,” snarked one author. Yes, the world of vehicle fuel is changing. But most adaptations won’t be as simple as replacing some equipment. Changing land uses is never that simple; zoning laws make it hard.

The business of vehicle fuel is changing because of two primary economic forces. The first is competitive market pressure in the transportation sector, which has encouraged fleet-owning companies to optimize how they fill their vehicles. Some insource, buying gas in bulk and storing it in tanks on their properties. Others outsource, with off-hour fueling by tanker-based delivery companies. Both methods make it so gas station owners can’t count on the local commercial vehicle fleet to bankroll them into the future.

The other economic force is the opportunity to operate electric vehicle (EV) charging infrastructure in places traditional gasoline stations can’t, including fleet vehicle lots and residential and commercial building garages and lots. Individual EV owners with their own garages will usually charge there, but the rest of the population—renters, owners of properties without onsite parking and large families with more cars than parking spots—will need to buy fuel from someone in the market. Now that can happen without a dedicated roadside retailer, should government grant permission.

With delivery gasoline and EV charging in nontraditional locations on the horizon, local governments and the states that oversee them need to allow the fueling market to evolve. They will be to blame when the owners of existing gasoline stations who want to modernize face regulatory barriers to moving into new lines of business. In order to change the way we refuel cars, governments will need to update zoning codes and other regulations relevant to land use.

First, regulators should treat gasoline delivery like they do other potentially dangerous fuel sales. If home heating fuel is allowed to be delivered to a property, property owners should be allowed to have tanker companies refill their vehicles just the same. Similarly, local governments sometimes require fuel companies to get permits for each individual customer they serve, an idea that would be absurd for delivery companies.

The future of electric vehicle charging is analogous, but zoning restrictions are more of a problem. As it stands, industrial zones often disallow retail activity. Companies that own electric delivery and truck fleets will have empty charging spots available while their vehicles are away during the day. Where local governments allow retail fuel sales in industrial zones, these spots could be opened to the public, decreasing the need for dedicated fuel retailers. In cities, the same could be allowed for apartment buildings, where surplus parking could be converted to alternative uses in places where real estate is too expensive for standalone surface-level charging stations.

Legalizing alternative business lines for gas stations is important to the economic health of the fuel market. In other places, the Takoma Park gas-come-charging station would not have been allowed because the zoning code allows “gasoline stations” rather than “vehicle fueling stations” or something analogous. For years, D.C. effectively banned redevelopment of gas stations in fear that there would be nowhere to fill a car downtown.

Those who run gas stations know a lot about what people want when they’re traveling or running errands around town. As the future of vehicle fueling evolves, we need to make sure these people can take part in the changing market, and that means applying zoning laws so that the entrepreneurs who operate existing gas stations can change their properties to provide other uses they think might work better.

Nick Zaiac is a Catalyst Policy Fellow and a Fellow in Commercial Freedom at the R Street Institute where his portfolio includes housing, postal and transportation issues. He holds a master's degree in economics from George Mason University. He lives in Washington, DC with his wife, Ali.
Catalyst articles by Nick Zaiac