The Impact of Urban Renewal on Harlem’s Economy

by: Nick Andrei Vicencio

Gentrification has always been about redeveloping neighborhoods; we may perhaps think of economic growth, whereas supply and demand are consistent, the job opportunities are flourishing within the community. In general, the supply of land in Harlem’s community has created a demand for an interest that transforms the neighborhood into a modern and advanced establishment, allowing the capitalist to start and open up new enterprises to make revenues. It deliberately fulfills the profitable gains, which I believe a positive factor when the economy is growing. A positive element of economic growth means an increase in employment opportunities, money supply, and productivity. Also, a modernized society and rental prices have to go through the roof so wealthy individuals would live in there so the real residents would have to go somewhere else. Besides, it could also seem like a horrible thing for small businesses present in the community at first glance because they are very much connected to their communities around them. Therefore, if these businesses experience significant social and economic changes, such as those that come under gentrification, local companies will be forced to feel the consequences.

On the other hand, an economy with a negative economic growth factor means declining wage rates and an overall reduction of the money supply. Due to the increased removal of houses and neighborhood stores in residential neighborhoods, commercial gentrification is characterizing as the physical, social, economic, and cultural changes in Harlem. This paper aims to scrutinize gentrification’s main idea from harmful to the positive impact on the small community of Harlem’s economy.

Urban Renewal and its’ negative factor

Gentrification changes the landscape and the cultural makeup of Harlem by increasing property values and changing consumption patterns. Since the late 1980s, William Needham, author of “Transformation of a City: Gentrification’s Influence on the Small Business Owners of Harlem,” claims that gentrification has challenged the residential and small business community of Harlem. Gentrification affects not only the longtime residents of Harlem but also the small business community. Needham explores how small business leaders can compete with demographic changes brought by gentrification. Needham asserts that these findings contribute to positive social change by informing the strategies employed by small business owners who are currently facing gentrification. The small business community in Harlem, New York, has a high level of displacement. When small businesses close because of gentrification, jobs are lost.” (Needham, 7). Needman addresses that with gentrification, Harlem experienced demographic changes. The city experienced an increase in property value, changes in demographics, and displacement of residents and business owners. The targeted population comprises small business owners in Harlem, New York. The findings from the interviews identified how deep an impact the issue of gentrification has on the small business community.

On the other hand, gentrification also causes increases in rental property, housing prices, and property taxes that home dwellers and business owners cannot afford to pay (Godsil, 2013). This fact is supported by the findings that gentrification’s problem affects how small business owners conduct their business. Gentrification affects not only Harlem’s long-standing residents but also the small business community. For instance, it was mentioned how capitalist focus on manipulating inner cities in ways that have not been done in the past. In addition, the author claims that inner city is a code term for African Americans and other people of color. “The use of code words and terms are prevalent in a racist and class-oriented society; Such code words and terms are developed to deflect attention away from the power structure’s preoccupation with race and class” (Mamadou, 61). I feel that capitalist is targeting inner cities because of privilege and they would be able to use them to gain power. In my perspective, capitalism is targeting Inner Cities because of valid reasons especially affordability and landscape.

Furthermore, The author addresses a main argument about gentrification being a term that is often associated with displacement and other negative by products of affluent in-movers altering the economic and demographic composition of a neighborhood. The author mentioned that Empirical research on neighborhood change, however, has not produced any conclusive evidence that incumbent residents are systematically displaced under circumstances of gentrification. This raises the question, do these incumbent residents benefit from the economic and social changes that accompany gentrification? In this paper, they focus on low-income neighborhoods undergoing economic transitions (i.e. gentrification) and test whether or not the potential benefits from these changes stay within the community. In the form of employment opportunities for local residents, they find that employment effects from gentrification are quite localized. Incumbent residents experience meaningful job losses within their home census tract, even while jobs overall increase. By making a preferred model, they claim that local jobs decline by as much as 63 percent. The job losses are concentrated in service and goods-producing sectors and low- and moderate-wage positions. Proximate job losses, however, are compensated for by larger gains in goods-producing and low-wage jobs slightly farther away. Overall the author stated that, there is some evidence that chain establishments are associated with modest job gains in gentrifying census tracts, and that, outside of NYC, businesses that stay in place around gentrifying neighborhoods are associated with marginal job gains.

Employment effects from gentrification are very localized.

In gentrifying neighborhoods, incumbent residents lose jobs while total jobs increase.

Local jobs decline in service, goods-producing and lower wage positions.

Incumbent residents also gain goods-producing and low-wage jobs a farther distance.

Chain establishments and incumbent businesses are associated with modest local hiring.

The purpose of this study was to explore how small business leaders can compete with demographical changes brought by gentrification. To do this successfully, he purposively takes a sample of 20 Harlem small business owners operating that participated in interviews during the city’s gentrification. The interview interpretations were triangulated with government documents and periodicals to strengthen the trustworthiness of the final report. He claims that these findings may contribute to positive social change by informing the strategies employed by small business owners who are currently facing gentrification.

Rachel Meltzer claims that local small businesses are very much tied to their surrounding communities. Therefore, when neighborhoods undergo meaningful economic and social changes, such as those under gentrification, one would expect local businesses to feel the effects. In her study, she tests the following questions using microdata on New York City properties and businesses.

Is gentrification, however, a threat or a boon for existing businesses?

What are the implications for the residents who patronize these services?

Using the database from the 1990s and 2000s (figure 1), Rachel Meltzer, author of “Gentrification and Small Business: Threat or Opportunity?” claims that Business retention rates in the gentrifying zones in Harlem were slightly lower than the citywide average during the 1990s. About 65 percent of establishments in single-business properties (compared with 72 percent for the city overall) stayed in place (retention rates in multiple-business properties were slightly higher, 68 percent, compared with 59 percent of the town overall).

However, gentrification during the 2000s is associating with reduced business retention. To be specific, Rachel mentioned that the share of businesses that stayed in place decreased in the 2000s compared with the stake in the 1990s for both gentrifying and non-gentrifying zones. Still, the decline was more pronounced for the properties in the gentrifying tracts (by about five percentage points, a significant drop that brings the neighborhood even further below the citywide mean). Besides, gentrifying tracts saw a more considerable decrease in the share of businesses that leave without any replacement and by a magnitude that makes a meaningful difference (almost four percentage points for single-business properties off of a base of 28 percent). Overall, gentrification has resulted in the displacement of multiple businesses in Harlem. However, the opportunity appears to exist for the neighborhoods that gain quality-of-life services and retain more businesses under gentrification conditions. (Meltzer, 72-73)

 

Gentrifying settings are more likely to attract new types of services than non-gentrifying and higher-income communities. They more often attract multiple-institution businesses to replace and displaced long-term businesses that is present in Harlem.

“An opportunity appears to exist for the neighborhoods that gain quality-of-life services and retain more businesses under gentrification conditions—perhaps because of new and increased spending power locally. The threats are also profound: the displacement that does occur can leave gentrifying neighborhoods with disproportionately more vacant spaces and without the promise of new amenities. Even in the settings where services grow or change, the latest products, price points, or cultural orientation could be more separating than useful for incumbent residents.” (Meltzer, 79-80) it shows that gentrification is associated with both business retention and disruption. Overall, Rachel found that most businesses stay in place, and displacement is no more prevalent in the typical gentrifying neighborhood than in non-gentrifying areas.  Trujillo mentioned that the share of traditional local stores and services has greatly declined. The media, state, and quasi-public organizations all value of boutiques, which they see symbols and agents of revitalization. However, he argues that new retail investors—many, in Harlem, from the new black middle class—are actively changing the social class and ethnic character of the neighborhoods. (Trujillo, 61-62)  To sum up, urban renewal (gentrification) has affected Harlem’s economy negatively because it forced small business owners to close their enterprises and it also made the residents, especially the African American residents feel that their cultural identity is being taken away.

Urban Renewal and its’ Positive Factor

Commercial Gentrification, are certain types of upscale restaurants, cafés, and stores that have emerged as unmistakable signs of gentrification in cities worldwide since the 1970s. (Zukin, 47) It helped the economy flourish—the role of new stores and services (i.e., boutiques) as agents of change in New York City.  These social dynamics should not be differentiated from the complex problems of social status, cultural capital, and race, as well as the challenges they present to the development of identity and culture. Boutiques tend to serve wealthier and satisfies residents interests. In addition, Trujillo claims that there are certain types of upscale restaurants, cafés, and stores that have emerged as highly visible signs of gentrification in cities all over the world since the 1970s. By taking Harlem as a field sites, he explores and analyze how the role of the new stores and services (“boutiques”) can be an agent of changes in New York City. Through data on changing composition of retail and services. By interviewing new store owners and analyzing a discursive analysis of print media. Trujillo claims that since the 1990s, the share of boutiques, including those owned by small local chains has dramatically increased, while the share of corporate capital (large chain stores) has increased somewhat. Boutique stores calls attention to displacement of local retail stores and services on which long-term, lower class residents rely and to the state’s failure to take responsibility for their retention, especially in a time of economic crisis. In my opinion landscape plays a big role in growing the economy because it helps a capitalist produce more project and infrastructure for commercial purposes that will benefit them and help the economy grow as well. Today, same valid reasonings of the real estate industry.

Conclusion

Gentrification is a complicated problem that brings out many sentiments from those who are concerned by the problem of displacement and changes in growth. On the topic of gentrification, perspectives and views differ. Some people see the good things that come with gentrification as a way to make the city better (i.e., restoration of empty buildings and new tenants).  However, the topic of gentrification is seen by some as a way to displace current inhabitants. In Harlem, gentrification has had a huge impact on both the tenants and the small business owners. As a result of gentrification, the arrival of retail giants brought the downfall of many shops and forced others to relocate. 

Works Cited

Williams, Needham. “Transformation of a City: Gentrification’s Influence on the Small Business

Owners of Harlem, New York.” SAGE Open, vol. 6, no. 4, SAGE Publications, Oct. 2016, p. 215824401667363–, doi:10.1177/215824401667363

Godsil, R. D. “The gentrification trigger: Autonomy, mobility, and affirmatively furthering fair

housing.” Brooklyn Law Review, 2013, 78, 319-338.

Meltzer, Rachel. “Gentrification and Small Business: Threat or Opportunity?” Cityscape, vol. 18,

3, 2016, pp. 57–86. JSTOR, www.jstor.org/stable/26328273. Accessed 11 Nov. 2020.

Zukin, Trujillo. “New Retail Capital and Neighborhood Change: Boutiques and Gentrification in

New York City.” City & community, vol. 8, no. 1, Wiley, Mar. 2009, pp. 47–64, doi:10.1111/j.1540-6040.2009.01269.

Meltzer, Ghorbani. “Does Gentrification Increase Employment Opportunities in Low-Income

Neighborhoods?” Regional Science and Urban Economics, vol. 66, Elsevier B. V, Sept. 2017, pp. 52–73, doi:10.1016/j. regsciurbeco2017.06.002.

Chinyelu, Mamadou. “Harlem Ain’t Nothin’ but a Third World Country: The Global Economy, Empowerment Zones and the Colonial Status of Africans in America.” Bookdepository.com, Mustard Seed Pr, 1 Dec. 1999, www.bookdepository.com/Harlem-Aint-Nothin-but-Third-World-Country-Mamadou-Chinyelu/9780965266437.