In a roundtable meeting about Cambridge’s liquor license policy yesterday, the city council encouraged the city’s license commission to make it easier for restaurants to serve alcohol.

Councillors raised concerns that the current policy dissuades innovative young restaurateurs from opening in Cambridge and discourages the hip young crowd from spending time—and money—in the city.

Liquor licenses for Cambridge restaurants are currently allocated according to a cap system established in 1986. This system delineates 15 “cap areas,” each of which is assigned a fixed number of licenses, which can be bought and sold. Harvard Square is one such area.

Additional licenses are issued in cases of “extraordinary public need” and “consensus among local residents,” but such licenses cannot be transferred or traded.

Several councillors argued that this system was well suited for solving the problems Cambridge faced 20 years ago but is now stifling the city.

“Harvard Square used to be barroom after barroom after barroom....It was a lot of trouble,” said Councillor Michael A. Sullivan. “We’ve eliminated that trouble, but we’ve also eliminated the entertainment.”

Mayor Kenneth E. Reeves ’72 emphasized the importance of liberalizing the city’s restaurant market.

“If you’re hungry on a Wednesday night, you shouldn’t have to go to the Hong Kong,” he said. “It’s not cosmopolitan, and it’s not logical.”

The cap policy, combined with Cambridge’s steeply rising living costs, has pushed the price of a full restaurant liquor license in the Square to $400,000, according to Cambridge License Commission Chairman Richard V. Scali, who attended the meeting.

Denise Jillson, executive director of the Harvard Square Business Association, pointed out at a separate meeting that this makes operating in the Square prohibitively expensive for anyone but large chains. Yet, the Square wants to attract more “small mom-and-pop enterprises,” Jillson said last month at a public meeting of the Economic Development, Training and Employment Committee according to council records.

The license commission has responded to these trends in recent years, by issuing licenses over the established cap. This September, the commission also altered the policy to allow licenses to be transferred from one cap area to another.

The results of this change are not yet apparent, but it is expected to drive down the sale price of licenses in the most expensive areas, such as the Square.

The council will discuss possible changes and policy orders to officially present to the license commission at next Monday’s regular meeting.

—Staff writer Virginia A. Fisher can be reached at vafisher@fas.harvard.edu.