Jenny Shuetz and Rachel Meltzer were just two students getting by in Harlem when they started taking notice of the area’s rapid gentrification and the way its retail outlets didn’t seem to catch up.
That the demographic shift didn’t incite chains like the Gap or Starbucks to move in sparked their curiosity, leading them to co-author a revealing study that was published online in December in the journal Economic Development Quarterly.
The two received a bit of press for their efforts, which sought to understand the factors at work behind the shifts in a neighbourhood’s public services and stores. Whereas most studies to date scrutinized the opposite—i.e., what happens to a neighborhoods’ inhabitants when their neighbourhood changes for better or worse—the study sheds more light on what, exactly, is changing. It reveals the relationship between neighborhoods and the businesses that serve them. (See how gentrification is making your neighbourhood lame.)
Shuetz and Meltzer trained their eye on New York to see how retail options changed over time as gentrification set in. They examined 208 zip codes between 1998 and 2007, a time when income segregation between minorities and whites accelerated, leading to a dynamic shift in these neighborhoods’ makeup.
“Upgrading neighborhoods” and “stable/lagging neighborhoods” saw an uptick in name-brand stores over time, particularly among supermarkets, which were often the first stores to move in presumably due to economies of scale (Ralph’s could take the hit in revenue, but Prada wouldn’t risk it). But low-income neighborhoods lagged in clothing and food service stores and were less likely to see a variety in retail overall. We spoke to Shuetz to glean insights from her research:
What inspired you to study the relationship between neighborhoods and businesses?
I started working on this when I was living in Harlem. There was a lot of gentrification, but the restaurants and stores didn’t seem to have caught up. There was not much academic literature looking at that. It was more focused on what happens to residents in neighborhoods. We felt that retail turning should benefit everyone who stays in the neighbourhood.
Why is “retail turning” important to consumers?
A lot of it is just getting better access to services. A supermarket coming in is going to be a win-win situation for both the business and consumer. Sure, it won’t be Whole Foods, but it’s clearly an improvement just to have one. In terms of grocery stores, there’s the issue of food deserts, which have inspired a lot of literature. We thought they’re important because everyone buys toiletries, food and household cleaning products. They’re something that should be everywhere.
What might explain the proliferation of small establishments in low-income neighborhoods?
Almost all low-income neighborhoods were entirely mum-and-pop stores. The only chains you really see are fast food. The bigger stores and stores that are part of a chain tend to have corporate resources so they have a size advantage. But it’s bad for these residents because these chains tend to offer higher quality goods, a wider variety of goods and lower prices. If you have a choice between a super chain and [no-name store], usually the chain is going to be the better option. For clothing, however, it might be harder to tell.
Could we assume the opposite is true—that businesses quickly pick up and leave—when neighborhoods turn for the worse?
Probably, but when a neighbourhood goes down existing stores have to hang on to a lease. Commercial leases run between five and 10 years, whereas a residential lease is only a year. Over time, though, if the income downs down, the business can’t be supported and is likely to leave. That brings up the issue, then, of whether you get higher vacancy rates as a neighbourhood declines or what type of store replaces it.