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As NYC’s gentrifying neighborhoods boom, some business owners are left behind

Business growth skyrocketed in gentrifying neighborhoods, but hasn’t benefited everyone

Courtesy Comptroller Stringer

Comptroller Scott Stringer has released a neighborhood-by-neighborhood report that tracks the evolution of the city’s economy since 2000, as well as the changing business landscape in each neighborhood. Called The New Geography of Jobs: A Blueprint for Strengthening Our Neighborhoods, the report highlights one of the major issues of gentrification: tremendous business growth in neighborhoods is often not broadly distributed among its residents.

Business activity was used to track neighborhood change between 2000 and 2015. Overall, the report found, the number of businesses in the city’s 15 gentrifying neighborhoods grew from 29,132 in 2000 to 42,261 in 2015, a 45 percent jump. The neighborhoods with the highest growth were Central Harlem (90 percent), Crown Heights North and Prospect Heights (84 percent), Crown Heights South, Prospect Lefferts and Wingate (67 percent), and Greenpoint and Williamsburg (64 percent).

As businesses in 22 of New York’s lower-income neighborhoods boomed, the share of businesses located in the Downtown and Midtown Central Business Districts fell from 39 percent to 31 percent. Overall, those 22 low-income neighborhoods experienced a 41 percent increase in business establishments from 2000 to 2010, far outpacing the 12 percent jump in the city’s 33 higher-income neighborhoods.

But despite that business growth, the report finds that, unsurprisingly, there is a large amount of inequality between white residents and residents of color in lower-income neighborhoods. In gentrifying neighborhoods, 21 percent of Black and Hispanic youth (from age 18 to 24) are out of school and out of work, compared to just 12 percent of white youth. Ten percent of Black and nine percent of Hispanic adults (age 25 to 65) are unemployed, versus 3 percent of white people.

And though minorities own 34 percent of all city businesses with employees, these establishments account for only 21 percent of business employment and 16 percent of revenue.

Black-owned businesses, in particular, have declined from 2007 to 2012 as many gentrifying communities have undergone rapid economic changes. According to the report, in 2007 African Americans owned 13 percent of all businesses in the Bronx and five percent in Queens. But by 2012, those figures were down to six percent and three percent, respectively. Among the 25 largest cities in the U.S. with over 500 Black-owned businesses, New York is one of just three to see a decline in black-owned businesses.

The comptroller lays out some recommendations for addressing this economic inequality. Those include establishing a “local network coordinator” to strengthen the connections between local businesses and residents; improving access to job counseling, training, entrepreneurship and placement services; helping entrepreneurs open storefronts; and assisting with business succession for retiring business-owners.

As Comptroller Stringer says in a statement, “We need an economy built on fairness. The increasing rents and economic distress that accompany gentrification are challenges that we as a city must confront … As business activity accelerates across the city, we have to do far more to connect local residents to career pathways and entrepreneurship opportunities.”

The full report is worth reading here. You can also download the economic snapshot of every borough and every Community Board district in the city, also issued by the comptroller, here.