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.