Chart of the Day: Small Business Turnover vs. Gentrification in New York City

From City Observatory, here’s an interesting chart ripped from a study about small business turnover and gentrification in New York City. It compares the number of businesses that close, go vacant, or are replaced with new businesses in gentrifying and non-gentrifying neighborhoods (gentrifying neighborhoods were defined as meeting a certain change in income within a census tract). Here’s the chart:

gentrification chart

Chart from the study by Rachel Meltzer.

On the blog, Daniel Hertz describes how turnover is an issue for small businesses, no matter what the neighborhood.

The percentage of small businesses that leave their storefront and are replaced by another business—the kind of scenario you’d expect to see in a gentrifying neighborhood, with (say) bodegas getting replaced by artisanal coffee shops—is very slightly higher in non-gentrifying neighborhoods than in gentrifying ones.

The essential fact here is that local storefront businesses have a high rate of turnover generally. So while there are lots of examples of businesses going out of existence in gentrifying neighborhoods, there are lots of examples in other kinds of neighborhoods as well.

The takeaway is not necessarily that business displacement never happens in gentrifying neighborhoods—plenty of people in high-cost cities can cite a favorite old business that relocated or disappeared because of rising lease costs.

The Twin Cities doesn’t have the kind of neighborhood change that you find in New York City, where rents can escalate seemingly overnight. But it’s always striking to me that there’s such a big difference between  how data describes gentrification and neighborhood change, and personal narratives, anecdotes, and small examples which seem to suggest that small businesses are greatly affected by gentrification.


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