Massachusetts lawmakers sent a bill to Gov. Maura Healey Thursday that would expand the number of liquor licenses in Boston, largely in diverse neighborhoods where most restaurants are not allowed to serve alcohol.

The proposal, hammered out by negotiators from the House and Senate earlier this week, would add 225 new licenses. Of these, 195 would be neighborhood restricted.

Restaurant industry leaders praised the bill as one that would solve a longstanding business equity problem.

“There clearly is a need for licenses to be made available in the neighborhoods that don’t have them,” said Stephen Clark, president of the Massachusetts Restaurant Association.

“I’m happy,” said Royal C. Smith, owner of Roxbury’s District 7 Tavern and president of the Boston Black Hospitality Coalition.

Those 195 licenses would be disbursed across 13 city ZIP codes, touching areas in the South End, Roxbury, Grove Hall and Four Corners, Fields Corner and Neponset, Codman Square and Lower Mills, Mattapan, East Boston, Charlestown, Jamaica Plain, Roslindale, West Roxbury, and Hyde Park.

Smith said, for him, it’s less about access to alcohol and more about the increased local dining options he expects the new licenses will bring.

“I go outside of [District] 7 and I can’t get a salad,” he said, adding that he anticipates there will be more than just takeout eating options in his neighborhood in the future. Smith’s most immediate restaurant neighbors include a McDonald’s, Crown Fried Chicken, Merengue and Rey Del Pollo — Dominican restaurants — and Nos Casa Café — a Cape Verdean restaurant. Only Merengue sells wine and cocktails.

Advocates like Smith, who pushed for the bill, pointed to the fact that Massachusetts’ system for issuing a limited number of liquor licenses creates a so-called secondary market, where those with ample funding shell out $500,000 or more to secure one of the scarce authorizations for a future restaurant endeavor. That system makes it especially difficult for would-be restaurateurs of color who typically lack access to the necessary capital to get started.

The new licenses, however, will be sold for just a couple of thousand dollars each, a lower barrier of entry that will make licensing a possibility for those who previously might have found it impossible. Afterward, if a restauranteur gives a up a license for any reason, it will be returned to Boston’s licensing board for redistribution in the same ZIP code at the official cost.

Boston does not currently capture demographic data for would-be restauranteurs seeking initial authorization to sell alcohol, though there is an optional question on the city’s renewal application, according to advocates who tried to access that information in the past.

The lack of an initial application question is a data dearth that Nicholas Korn, managing partner at the hospitality research and development firm Offsite, has recommended be changed.

“I think we know that if we had [those numbers], it would look pretty bad,” he told GBH News, adding that “by knowing it, we can talk about it and we can use that as a baseline against which the city can do better.”

“I go outside of [District] 7 and I can’t get a salad.”
Royal C. Smith, president of the Boston Black Hospitality Coalition

During the height of the COVID-19 pandemic, Korn’s firm published a report showing that the city’s four neighborhoods with the highest concentration of white residents held eight times as many liquor licenses per person as Boston’s four most diverse neighborhoods. The report also showed that only 2% of liquor license holders identified as Black.

The city of Boston’s press office did not immediately respond to a GBH News inquiry regarding what portion of current liquor licenses holders identify as Black, Latino or Asian.

Lawmakers hailed the expansion bill’s passage as a positive step for equitable economic development.

“We’ve seen this alarming pattern over the last couple of years where liquor licenses from our community were actually sold for profit, a lot of money to places like downtown and the Seaport,” said State Sen. Liz Miranda, who represents parts of Dorchester, Roxbury, Mattapan and Jamaica Plain. “And I love downtown and the Seaport, but I want my neighborhoods to thrive just like downtown and the Seaport.”

State Sen. Nick Collins, who represents South Boston and parts of Dorchester, Mattapan and Hyde Park, acknowledged that the fact the new licenses cannot be resold at inflated prices could limit the ability of recipients to generate the capital needed to expand or, in some cases, shut down.

Still, Collins said, “By dropping the upfront cost, we’re allowing them to enter a market that they’re otherwise shut out from right now.”

The bill also allows Boston to grant 12 unrestricted licenses, as well as 15 for community spaces, including outdoor spaces, theaters and other nonprofits that have occupancy limits of 749 or less.

Mary Blake contributed reporting for this story.