FAQs Archive - Page 4 of 5 - Small Business Anti-Displacement Network (SBAN)

Q: What is gentrification? Where does it happen?

Gentrification is a process of neighborhood change in which higher-income, more highly educated residents move into historically disinvested, lower-income neighborhoods. Gentrifying neighborhoods experience rapid new private and public investments that transform them with higher-end residential and commercial construction. Given their long history of segregation and disinvestment, urban neighborhoods that are home to communities of color and immigrants are those most likely to gentrify. For established residents and small businesses, gentrification can result in physical or cultural displacement. Residents and businesses are physically displaced when they can no longer afford rising rents or property taxes, or their customers disappear, and they must move out of the area or close. They are culturally displaced when cultural practices, social norms, and political power of longer-term residents or businesses are displaced or suppressed by those of newcomers -- often White residents and larger commercial chains. Gentrification is reshaping cities across the United States and internationally, displacing vulnerable residents and small businesses and changing the character of communities. High levels of gentrification are evident in rapidly growing metropolitan areas such as Washington, D.C., San Francisco, and Chicago. For more on gentrification, see our Research .

Q: What is commercial gentrification and small business displacement? Who is most affected?

Commercial gentrification refers to the process by which long-term businesses that provide products and services to established residents are forced to move or close and are replaced by establishments that cater to more affluent consumers. When neighborhoods gentrify, existing small businesses face rising rents and taxes and changing clientele. Small businesses owned by immigrants and people of color (POC) in gentrifying neighborhoods are particularly vulnerable to displacement because they do not have the same resources or privilege as incoming businesses, which are often larger and White-owned. POC- and immigrant-owned businesses face greater lending discrimination, landlord exploitation, and have less bargaining power than White-owned businesses. They have fewer capital resources and are often highly affected by economic downturns because of credit constraints and narrow operating margins. They have less access to training and technical resources and are often unaware of or face various barriers to accessing local, state, or federal resources. Due to historic and ongoing discrimination, they also tend to have less personal wealth that they can leverage to maintain or grow their businesses. For more on commercial gentrification, see our Research .

Q: What is a “small” business?

Small business is a broad term, often defined as a firm employing up to 500 people. There are approximately 32 million small businesses in the United States that fall under this definition, of which one in five are owned by people of color. Among all small businesses, 89 percent have fewer than 20 employees and generate almost all of the nation’s economic activity. Approximately four million “micro-businesses” with fewer than 10 employees make up three-fourths of the nation’s private-sector employers. SBAN’s focus is on neighborhood small businesses, which typically range from one to 20 employees and are most vulnerable to displacement. For more on small businesses, see our Research .

Q: What can be done to stop or slow commercial gentrification and small businesses displacement?

In diverse cities across the United States and internationally, small businesses and their advocates are developing innovative ways to address the challenges and vulnerabilities associated with gentrification. There are many strategies that can help prevent commercial gentrification and small business displacement, including small business tax credits, zoning reforms, commercial tenant protections, local entrepreneurship support, community ownership, and preservation of stores and cultural landmarks. SBAN is working to identify and promote promising anti-displacement policies and practices in the communities where our network members work. We have developed an anti-displacement toolkit as a resource for small business leaders, including advocates, policymakers, and technical assistance providers. Read more about anti-displacement strategies , how they work, and the tools and stakeholders needed to advance these strategies. For guidance tailored to your needs, visit our interactive toolkit .

Q: How are neighborhoods impacted when small businesses close or move?

Small businesses are vital to the social, cultural, and economic health of neighborhoods, particularly low-income communities of color. They foster community connectedness, provide local employment opportunities, connect residents to local goods and services, and allow a community’s dollars to remain in and improve their neighborhood. When established neighborhood small businesses are displaced, it affects residents who have relied on them for goods, services, employment, gathering spaces, cultural amenities, and social capital. Small businesses such as bodegas, restaurants, nail salons, and pharmacies also support community cohesion by participating in local charities, organizations, and schools through donations and sponsorships. They cultivate relationships among customers, employees, and neighborhood residents. In low-income neighborhoods, small businesses tend to be independent or family-owned and are more inclined to employ local residents. Small business owners are often strongly committed to the neighborhood, often helping to revitalize areas that have experienced significant disinvestment. For more on neighborhood impacts, see our Research .