5. The retail gap
Porter brought attention to untapped spending
power of urban neighborhoods in 1995
Potential overlooked by traditional market analysis
Higher density and concentrated buying power
Inner cities represent a $122 billion retail market
1/3 of retail spending ($40 billion) spent out of area
9. Who benefits from
retail growth?
Or help them by creating jobs, and economic
opportunities and promoting more mixed income
neighborhoods
Increased retail activity could
harm low-income residents by
contributing to displacement
10. How might retail
benefit residents?
Improved access to goods and services
More jobs
Strengthened social norms and networks
Improved self-perception/identity
Increased neighborhood competitiveness
Changed neighborhood residential composition
11. Meeting basic needs
Improved access to retail
goods and services is a
frequent goal for low-income
residents
Freeman showed that low-
income residents saw new
stores as a benefit even in in the
face of rising rents and
displacement
12. There must be more
to it than jobs!
Retail generally
does not offer
great jobs
13. People vs. Place
People: Neighborhood
economic development may be
irrelevant because participation
in the regional economy matters
more
Place: Neighborhood development creates social
norms and networks key to success in regional
economy
14. Retail as anti-poverty
strategy
Seidman: Commercial revitalization
addresses poverty by:
Creating a more positive environment
Improving social interaction
Changing resident self-perceptions
and norms
15. The “excluded
consumer”
Individuals are aware of social exclusion when they
can’t purchase basic goods
Even whose who can afford goods experience
exclusion based on the mode through which they
purchase
16. New retail can alleviate this sense of exclusion
New retail can alleviate this sense of exclusion
23. Residential
Composition: Chicken
or Egg?
More higher income residents, improve spending
power and should support more stores
Residents with economic options may prefer to
locate in neighborhoods with more retail
opportunities
24. Does population
growth drive retail
growth?
Koebel and Immergluck found that growth in
neighborhood spending power didn’t explain retail
growth
Non economic factors had a bigger impact
25. Does retail growth
drive residential
change?
Retail growth may change who
chooses to live in a neighborhood
Retail development can be a tool to
influence the character of changing
neighborhoods
26. Mixed income
neighborhoods
Potential benefits for low-income residents
Improved resources and services
Better mechanisms for informal social control
Social interaction with higher income residents
could lead to improved economic opportunities
27. The difficult bind
If we make the place better, won’t wealthier people
outbid existing residents for the right to live here?
Doesn’t any improvement
eventually contribute to
displacement?
28. There is more than
one kind of change
Low income growth
Middle income growth
Upper income growth
“Bi-polar” growth (Galster)
“Gentrification” (Freeman)
31. Defining success
Retail as a route to revitalization
1. Do programs lead to retail growth?
2. Do residents receive direct economic benefits?
3. Do perceptions of the neighborhood change?
4. Does other investment follow?
5. Does neighborhood composition change?
6. How does population change impact residents?
33. Public led
commercial
developmentAttempt to “catalyze” market activity by subsidizing
new real estate projects
Projects developed by Community Development
Corporations or private developers
Key funding provided by local government
34. New Horizons
Center
• MBD Development Corporation – The Bronx
• 134,000 square foot shopping center
Pathmark Supermarket
Athlete's Foot
Blockbuster Video
Paramount Home Decorators
Radio Shack
Rent-A-Center
35. New Horizons Center
Outcomes
400 jobs; 85% neighborhood hires
Most hires through MBD Job Center
22 national and regional credit tenants
No local small businesses
Access to healthy food
Brought back life on the street
36. Sources of public
capital
Urban Development Action Grants
Community Development Block Grants
Tax Increment Financing
EZ/EC Programs
Historic Preservation Tax Credits
New Markets Tax Credits
37. Public led
commercial
development•Job creation
Jobs in construction andoperations
May require higher subsidy per
job than other job programs
No data on multiplier effects
•Vacancy rate
No evidence
•Tax revenue
Direct impact of new stores
Little tracking of indirect
impact
Investment
High leverage of
private investment in
projects
No data on investment
in surrounding areas
Crime and safetyNo data
Community identityNo data
38. “Market led”
business attraction
“Creating a favorable environment for business” in
place of direct government involvement
Research to document the real
spending power/market opportunity
in urban neighborhoods
Social Compact and MetroEdge
39. Retail Chicago
Program of City of Chicago
Assists retailers with finding sites and developing
new retail in targeted neighborhoods
Neighborhood economic profiles
New metrics to identify untapped spending
power
41. “Market led” business
attraction
•Job creation
Anecdotal evidence of private projects creating jobs
No data on multiplier effects
•Vacancy rate
No data
•Tax revenue
No data
•Investment
Anecdotal evidence of privately financed projects
Often accompanied by significant public investment
No data on investment in surrounding areas
•Crime and safety
44. Fruitvale Main Street
Established in 1996
LISC pilot site
CDC led
Committee Structure
Design
Promotion
Safety and Cleanliness
• Economic Restructuring
45. Fruitvale Main Street
Design Façade Improvements
•Matching Grants
•Design Assistance
Public Improvements
•Fruitvale Plaza Park
•Cultural Arts Banners
•Antique Street Lights
•Bus Shelters
•Historic Preservation
•Historic Markers
46. Fruitvale Main Street
Promotion •Special Events
• Dia de los
Muertos Fruitvale
Festival
•Image Enhancement
• Business
Directory
•Retail Events
• Christmas
Posada
48. Fruitvale Main Street
Safety and
Cleanliness
Cleanliness
•Anti-Litter Campaign
•Improved Trash Cans
•Ambassadors
Safety
•Relationship with
Police
•Pay phones ordinance
49. Fruitvale Main Street
Results – First 5
Years
• 140+ participants on Main Street committees
• 133 net new jobs
• 51 new business start-ups, 8 expansions
• 110 facades completed
• $2.7 million private sector investment
• $2.1 million public sector investment
• Adopted Business Improvement District
51. Revitalization
programs
•Job creation
•Average program generates steady job growth
•Wide variation between programs
•High percentage filled by residents
•Vacancy rate
•Documented declines in vacancy rates
•Tax revenue
•Documented increases faster than citywide average
•Investment
•Limited public investment leverages private capital
•Most neighborhoods experience increased public investment
•Crime and safety
•Documented declines in crime rates
•May relocate to nearby areas
52. Defining success
Retail as a route to revitalization
1. Do programs lead to retail growth?
2. Do residents receive direct economic benefits?
3. Do perceptions of the neighborhood change?
4. Does other investment follow?
5. Does neighborhood composition change?
6. How does population change impact residents?
53. Researching link between retail
and neighborhood revitalization
• Overall picture
• Effects of specific programs
54. Data and methodology
• Data to measure revitalization
• Geolytics
• National Establishment Time Series (D&B)
• Units of analysis: tracts and zips
• Defining neighborhood change types based on
income categories (Berube & Tiffany)
55. Diversity Index = 1
< 50% 50-80% 80-100% 100-120% 120-150% 150% +
AREA MEDIAN INCOME
PERFECT DIVERSITY
56. Neighborhood Change Types
• More low income
• Share in bottom two groups
• 2000 > 1990
• > 25% by 2000
• More middle income
• Share in middle two groups
• 2000 > 1990
• > 25% by 2000
• More upper income
• Share in highest two groups
• 2000 > 1990
• > 25% by 2000
57. Methodology: Increasing Bipolarity
• Bipolarity index measuring income distribution and
diversity (1990-2000) (Galster & Booza, 2007)
• Nominal entropy index (0 to 1)
• Ordinal entropy index (1 if bimodal)
• Ratio of nominal/ordinal (>1 = bipolar)
59. • Housing price appreciation > regional average
• Increase in educational attainment > regional average
• Income at 40th
percentile in starting year; and
• Central city location
Gentrification:
Modified Freeman
(2005) Definition
66. Neighborhood Case Studies
• Increasing bipolarity: Menlo Park
• Gentrifying: Tenderloin, SF
• Becoming more low-income: Richmond
• Becoming more upper-income: Berkeley
• Becoming more middle-income: Alameda vs. San
Leandro
67. Increasing Bipolarity:
El Camino Real, Menlo Park
• Income diversity declined while bipolarity increased
• In 1990 18% <50% AMI, 36% >150% AMI
• In 2000 18% <50% AMI, 44% > 150%
• 5% increase in estabs 1990-2005 (vs.18% in region)
• 5% increase in sales (vs. 34% in region)
• -3% change in employment (vs. +12% regionwide)
• 10% chains (vs. 12% in region)
• 5% startups (vs. 10% in region)
68.
69.
70.
71.
72.
73. Gentrifying:
Tenderloin, San Francisco
• Gain in income diversity by losing low-income
• <80% AMI decreases from 57% to 50%
• Median home price increase above regional average,
educational attainment increase above regional
average
• 1% decrease in estabs 1990-2005 (vs. 18% in
region)
• 7% increase in sales (vs. 34% in region)
• 11% decrease in employment (vs. +12% regionwide)
• 10% chains (vs. 12% in region)
• 4% startups (vs. 10% in region)
74.
75.
76.
77.
78.
79.
80.
81. Becoming more low income:
MacDonald Avenue, Richmond
• Low income diversity with gain in low-income
• <80% AMI increases from 65% to 69%
• 16% increase in estabs 1990-2005 (vs. 18% in
region)
• 65% increase in sales (vs. 34% in region)
• 23% increase in employment (vs. +12% regionwide)
• 6% chains (vs. 12% in region)
• 8% startups (vs. 10% in region)
82.
83.
84.
85.
86.
87.
88. Becoming more upper income:
Gourmet Ghetto, Berkeley
• Declining income diversity with gain in upper-income
• >120% AMI increases from 25% to 30%
• Stable establishments, employment, sales 1990-2005
• 6% chains (vs. 12% in region)
• 8% startups (vs. 10% in region)
89.
90.
91.
92. Becoming more middle income:
Park Street, Alameda
• Increasing income diversity with gain in middle-
income
– 80%-120% AMI increases from 20% to 25%
• 18% increase in estabs 1990-2005 (vs. 18% in
region)
• 7% increase in sales (vs. 34% in region)
• 0% increase in employment (vs. +12% regionwide)
• 7% chains (vs. 12% in region)
• 7% startups (vs. 10% in region)
93.
94.
95.
96.
97. Becoming more middle income:
San Leandro
• Increasing income diversity with gain in middle-
income
• 80%-120% AMI increases from 25% to 28%
• 1% decrease in estabs 1990-2005 (vs. 18% in
region)
• 37% increase in sales (vs. 34% in region)
• 2% increase in employment (vs. +12% regionwide)
• 16% chains (vs. 12% in region)
• 9% startups (vs. 10% in region)
98.
99.
100.
101.
102.
103. Conclusions and Next Steps
• Different strategies different impacts
• Commercial district revitalization most demonstrable
impact on neighborhood revitalization
• Neighborhood composition matters:
• Retail revitalization associated with increase in
middle income groups
• Retail composition matters:
• Chains stores may help fortify income diversity
• Further research on chicken/egg question needed
![[Photo of Richmond]
IRON TRIANGLE, RICHMOND, CA](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)