Transformation of a City

Abstract

Gentrification changes the landscape and the cultural makeup of a city by increasing property values and changing consumption patterns. Since the late 1980s, gentrification has challenged the residential and small business community of Harlem, New York. Guided by the rent gap theory and the consumption-side theory, the purpose of this case study was to explore how small business leaders can compete with demographical changes brought by gentrification. A purposive sample of 20 Harlem small business owners operating during the city’s gentrification participated in interviews. Interview interpretations were triangulated with government documents and periodicals to bolster the trustworthiness of the final report. These findings may contribute to positive social change by informing the strategies employed by small business owners who are currently facing gentrification.

Introduction and Background

Gentrification is a social and economic process where individual homeowners and renters and private capital (real estate firms, developers) reinvest in fiscally abandoned neighborhoods (Perez, 2004). Gentrification has had a strong impact on many cities around the globe (Lees, Slater, & Wyly, 2008). When a city undergoes gentrification, changes in the demographic landscape of the city and economic changes take place (Lees et al., 2008). The reinvestment in fiscally abandoned neighborhoods occurs through housing rehabilitation, loft conversions, and the construction of new housing stock (Perez, 2004). The arrival of new residents often brings different opportunities and income levels, which change the atmosphere of urban neighborhoods. The more affluent new residents are better educated and characteristically vote in higher percentages than poorer residents vote (City Mayors, 2011).

The new residents brought by gentrification can influence community budgets. Mayors of poor cities often need to choose between spending on bicycle lanes and dog parks for new residents or affordable housing and job training for the old residents (City Mayors, 2011). Often gentrification can lead to displacement for residents and small business owners who lived or operated a business in that city. Gentrification usually implies a progression where outsiders move into an area where once attractive properties have now declined because of disinvestment. The increased demand results in an increase in property values (Godsil, 2013). Gentrification modifies the neighborhood and family environments in which children are socialized (Formoso, Weber, & Atkins, 2010). The issue of gentrification reconfigures a neighborhood landscape. The reconfiguration of a neighborhood affects not only people that live in those neighborhoods undergoing gentrification but also those that operate businesses in that area. When a city undergoes gentrification, gentrification affects the customer base and day-to-day operations of small businesses operating in the community (Zukin, 2010).

Background of the Problem

Gentrification changes the demographics of many cities in the United States and around the world (Lees et al., 2008). The issue of gentrification captures many economic and political causes. Gentrification is the lens for both social movements. Low-income communities that were previously subject to gentrification are now suffering. The low-income communities suffer from both higher rates of homeowner foreclosures and investor foreclosures leading to homeowner and tenant evictions (Maeckelbergh, 2012). The results of gentrification include rises in residential density and population rises in demand for retail facilities, rises in median family income, increases in disposable income, and a rise in property values (Austin Revitalization Authority, 2005).

During gentrification, neighborhoods with the older, middle- to lower-class residents remain labeled as being a unique place to live. As urban living has become attractive, people that are more affluent began putting money into these areas for new developments. Houses and small businesses received demonization to make way for luxury condominiums (Lees et al., 2008). People who are living and operating businesses in the areas that undergo gentrification often struggle to cope with the changes occurring from gentrification. Small businesses operating in areas undergoing gentrification often face the challenge of how to cope with the changes in the demographics (Sutton, 2010). Small businesses operating in areas undergoing gentrification need to implement strategies to survive the changes occurring in the city. The issue of gentrification is significant because it affects not only the residents living in the community undergoing the process of gentrification but also the small businesses that operate in the community. When exploring the issue of gentrification, the perceptions of business owners on gentrification need exploration. A purposive sample of 20 Harlem small business owners helped uncover how gentrification affected the small business community of Harlem.

Problem Statement

Gentrification causes increases in rental property, housing prices, and property taxes that home dwellers and business owners cannot afford to pay (Godsil, 2013). The process transforms socially marginal and working class areas of the central city to a wealthier residential area. From 1990 to 2000 in the United States, nearly 15% of all central city tracts experienced gentrification, which caused massive demographical changes based on diminishing capital and buying power (McKinnish, Walsh, & White, 2010). The general problem is small businesses are going out of business when faced with the issue of gentrification (Zukin, 2011b). The specific problem is small business leaders lack the knowledge of how to adapt when faced with the issue of gentrification.

Purpose of Study

The purpose of this qualitative case study was to explore how small business leaders can compete with demographical changes brought by gentrification. The targeted population comprised of small business owners in Harlem, New York. 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 demographical changes brought by gentrification challenged how the 20 small business owners of Harlem interviewed for this study operated their business. Using these findings, strategies may help small business owners who are currently facing gentrification. The results of the study may contribute to social change by providing specific guidelines to help small business owners survive the changes caused by gentrification.

Conceptual Framework

Gentrification causes many changes that affect people living in the community and those that operate a small business in that community (Lees et al., 2008). These changes include displacement through rent, price increases, and demographical changes. The theories that relate to issue of gentrification and its impact on small business owners are the rent gap theory (Smith, 1987) and the consumption-side theory (Ley, 1994).

Under the rent gap theory, the issue of gentrification remains as the product of investment and disinvestment (Lees et al., 2008). The rent gap is a gap between the rent a property presently grosses and the rent that the property can receive if put to its best use (Smith, 1987). When the rent gap is wide enough, developers and property owners can see the potential profit in reinvesting in inner-city properties and redeveloping these inner-city properties for new residents (Smith, 1987). The rent gap closes when a city redevelops with an increase in rental property, leasing rates, and mortgages. Under the consumption-side theory for gentrification, the consumption pattern of those living in the area changes along with the demographical change caused by gentrification. The consumption theory is the emergence of a new middle class and their cultural and consumption requirements as an essential element to gentrification (Ley, 1994).

Literature Review

The demographical landscape of a community drastically changes when gentrification comes to a community (Lees et al., 2008). Sometimes these changes progress slowly over time or sometimes without notice. These changes in the landscape of the community have a positive or negative effect on the small business owners that operate in the community. The changes in the demographical landscape alter the consumption and buying patterns of those that live in the city. The changes in the demographical landscape have people considering how to adapt to these changes, and the direction to adjust to these changes (Zukin, 2011b). Regularly, the term gentrification reflects a negative view. The reason for the negative views of gentrification is the rise in rent prices brought on by property owners. The rise in rent prices force people out of their homes (Lees et al., 2008). Many feel that the issue of gentrification harshly affects those long-term individuals that live and operate a business, prior to gentrification, coming to the city.

Many researchers have explored the issue of gentrification; however, few looked at how gentrification affected the small business owners in the communities. To gain a better understanding concerning the issue of gentrification, textbooks, books, and journal articles written on the issue of gentrification provided insight. Different topics associated with the issue of gentrification materialized. Some topics associated with the issue of gentrification were redevelopment, housing, urban renewal, displacement, and demographical change.

The issue of gentrification has social and cultural impacts on a community. Gentrification culturally affects commercial developments. With gentrification, concerns exist of social and cultural displacement from commercial gentrification (Ocejo, 2011). Gentrification can unfairly define what should reflect as a normal and positive stage in the life cycle of cities. In this life cycle, cities are neighborhoods rising, declining, and being reborn over many years. The increased property values that associate with gentrification are increased tax revenue for schools, parks, and other social services (Kiplinger, 2011). A connection exists between gentrification and public policies in the neighborhoods of Prenzlauer Berg, Berlin, and Harlem, New York. The connection exists between the difficulties of gentrification and public policies (Bernt, 2012).

Harlem, New York, is changing because of gentrification (McKnight, 2011). The city of Harlem is the historic capital of Black America. During the 1920s, Harlem became the center of the struggle for flourishing culture and art. The city also struggled with civil and economic equality (New York State Museum, n.d.). Since gentrification began in this city, the Black population has declined. Where a rundown dwelling housing existed because of a critical lack of substructure and services now stands expensive new condominiums and a variety of upscale urban amenities. The population of Harlem is becoming progressively wealthier and mainstream (Rottenberg, 2010). New residents continue to move to the area while previous residents find themselves moving out as housing prices and the cost of living go through the ceiling.

Gentrification brings change to property values and new development services. The atmosphere of the community changes when new residents come to a city because of gentrification (Horowitz, 2012). Through gentrification, Harlem, New York, experienced demographical change in its communities. Considering the changes that have been occurring in Harlem, community leaders and public officials faced the challenge of not displacing long-term residents. The officials had to make sure the long-term residents of Harlem benefit from the changes occurring from gentrification. The culture, sense of connection with its residences, and the history of Harlem entice many to come to the city. The views on the gentrification of Harlem are mixed. The influx of coffee shops, boutiques, retail stores, and restaurants bring diversity and create jobs in the community. The new residents of Harlem are a part of the evolution in the city. Several articles discuss the issue of gentrification in Harlem, New York.

Over the last decade, Harlem has become the new development frontier. The city leaders helped create the transformation, reducing crime and rezoning important arteries such as 125th Street to make Harlem developer-friendly. A positive change came to Harlem because of the redevelopment brought to the city of Harlem, New York (McKnight, 2011). The commercial gentrification affected the culture of Harlem (Zukin, 2011a). The process of gentrification in the 1980s began to affect the majority of large and moderately sized urban areas (Schaffer & Smith, 1986). In 1986, scholars predicted that if gentrification were to proceed in Harlem, a displacement would affect African Americans that live in the area.

Low-income New York residents need a permanent place to live because of the price poor residents pay for displacement into other areas (Zukin, 2010). Local businesses depend on local customers, usually lost in such moves. Gentrification produces economic forces that drive locals to move elsewhere. Business improvement districts (BIDs) offer funding from business owners to enact controls over the use of public space to eliminate unwanted behavior.

Many redeveloped or gentrified communities are stating sustainable development as a main goal when improving older urban spaces. Some wonder whether the benefits of redevelopment projects work with the original members of the community (Dale & Newman, 2009). The significance of an urban location to small-scale manufacturers and the importance of small-scale manufacturers are essential to an urban economy. The flexibility, creativity, and innovation considered symbols of the new creative economy are present in traditional manufacturing districts (Curran, 2010). The rezoning of a community affects businesses in those areas. The discourse around urban redevelopment has assisted in cookie-cutter urban policies that present gentrification creative clusters and the attraction of the creative class as the best practice scenarios. These scenarios are recurring across scales and geographies.

Gentrification affects the BIDs in a community. The BIDs disbands public–private dichotomies to create new hybrid capacities for equally valuable community and business development (Grossman, 2008). The strategy is self-assessment districts initiated and governed by property or business owners. State laws empower the BIDs. Local governments approve BIDs to offer public services in designated urban and suburban areas (Morçöl & Wolf, 2010). BID movement provides new tools for labeling public entrepreneurship in public administration to bridge special interests and express sustainable social and economic networks in the community. Many redevelopment agencies and the local government used commercial-retail development approach to create lively and revitalized downtown areas (Steinmann, 2009).

Method

Research Design

The qualitative research reality is fluid, incomprehensible, and shaped and influenced by social relations. Qualitative researchers pursue meaning from participants’ understanding (Arghode, 2012). The case study research design method facilitates a deep examination of the real-world perspective for a researcher in its natural environment (Yin, 2012). Case study research brings an understanding of a complex issue and extends experiences. Case study research helps in understanding real-life circumstances when gathering and examining data collected from complex research questions answered by the participants of the research study. The case study design allowed the exploration of the why and how of the influence gentrification has on a small business owner, while the other research methods would not allow an opportunity to look at the issue of gentrification and small business owners at a demographical standpoint.

Sampling and Procedures

The selections of these small business owners for interviewing exist on the belief that small business owners possess the relevant insights that are sought from the study. The criteria for selecting participants considered regional and racial representation. The participants operated a business at least 5 years, prior to gentrification coming to their community, and are still operating in the area. The small business owners, affected by the issue of gentrification, could provide insights on the changes caused by gentrification.

In a study, qualitative samples must provide enough participants to guarantee that most or all of the insights are important for the research. If the sample size in the study is too big, the data become repetitive and, ultimately, superfluous (Mason, 2010). The participants for the study came by way of the purposive sampling. Purposive sampling focuses on certain characteristics of a population of interest. Purposive sampling allows the researcher to select participants that serve as a specific purpose consistent with the study’s main objective (Collingridge & Gantt, 2008). The eligibility criteria for the study participants are (a) operating a business in Harlem, New York, prior to gentrification coming; (b) operating a business during the gentrification of Harlem between 2001 and 2012; and (c) insight on gentrification’s impact on small businesses. Selecting small business owners that operated businesses prior to gentrification allowed an understanding of how businesses operated prior to gentrification.

Data Collection and Analysis

Instruments

The selection of the instruments used in the study came from analytical and reflective thinking. The instrumentation strategy of the study involved semistructured interviews of business owners operating in the community of Harlem, New York, while it is undergoing gentrification. The main objective in the semistructured interview is to explore in-depth experiences of research participants, and the meanings they attribute to these experiences (Adams, 2010). The information obtained from interviews can assist in the research to extract views from the participants and collect interview data from the small business owners operating in the community of Harlem, New York. The results of the interviews may discover the issue of gentrification through the eyes of the participants.

The data collection process of the study included face-to-face semistructured interviews that use open-ended questions. A semistructured interview has a set of open-ended questions that permit spontaneous and in-depth responses from small business owners interviewed for the study (Ryan, Coughlan, & Cronin, 2009). The semistructured interview results may include forum-planned exchanges found in everyday conversations. The process is in accordance with the interview guide, which follows themes related to the research questions for this study.

To ensure the accuracy of capturing the significant points, the responses of the participants received audiotaping and transcriptions. Data collection process included the review of public documents relating to gentrification and small business owners. Using the interview questions selected for this study may create responses that offer insights into the main research question. The participants shared knowledge and expertise, which provided rich descriptions of their experiences with gentrification.

Data Analysis

The data analysis and interpretation process is a participatory process involving both the researcher and participants (Bradbury-Jones, Irvine, & Sambrook, 2010). The data collected for this study is significant materials, past and present, serving as foundations for the study and the analysis. Participatory analysis and interpretation is an interactive form of feedback and reflection that moves back and forth between the understanding of the researcher and the reality of participants (Bradbury-Jones et al., 2010). The process follows a multi-step procedure for qualitative analysis and interpretation developed by Smith (as cited in Wesson, 2005). The process started with carefully reviewing the recorded interviews and journal notes of the research to gain an initial understanding of the responses. The next step involves organizing and coding the data received while extracting key words and meaningful statements from the interviews. The third step is grouping themes and meanings from the data. The fourth step is the formulation of preliminary interpretations. Discussions between the participants follow the researcher’s preliminary interpretation (Wesson, 2005). These discussions ensure the reliability and validity of the researcher’s understandings of the research conducted (Wesson, 2005). During this stage, changes occur or expansion of the initial interpretations if needed. Next, use the themes and meaning to form a holistic interpretation of the data. Return to participants for further validating of the interpretations. Then the researcher must perform a final write-up (Wesson, 2005).

In exploring how gentrification influences small business owners, 16 interview questions were designed to ask small business owners concerning their business and experience with the issue of gentrification. The respondent perspective codes explain the questions that relate to how gentrification affects small business owners. The list of codes design is within the context established by the case study qualitative research. The important statements received grouping in meaningful statements or themes occurring with gentrification and its impact on small business owners. A code in qualitative inquiry is a word or short phrase that symbolically assigns a comprehensive, significant, and evocative attribute for a portion of language-based data (Saldaña, 2009). The data consisted of interview transcripts and participant observation notes. These themes should relate to gentrification and small businesses. The questions asked in this study are designed to address the theories used in this case study. The theories used in this study are the rent gap theory and the consumption-side theory. The responses from the participants uncovered the rise in property prices, and the change in the consumption patterns affects the small business owners of Harlem.

Reliability and Validity

Reliability is a precursor to validity, because anything not reliable is not valid (McManus, Ferguson, Wakefor, Powis, & James, 2011). Reliability in qualitative research is a connection between what the researcher records as data and what occurred in the natural setting (Oluwatayo, 2012). To increase the reliability of the research, the researcher needs to explain clearly the different processes and phases of the inquiry. A researcher should elaborate on every phase of the study. The researcher should describe in detail the rationale of the study, design of the study, and the subjects (Zohrabi, 2013). Participant feedback brings validity, reliability, and credibility to the interpretation process.

Validity receives evaluations in relations of how well the research tools measure the phenomenon that is under investigation (Punch, 1998). Validity states the strength or accuracy of the research (Trochim, 2006). Validity, in the context of a qualitative study, defines validity as the extent to which data are plausible, credible, and trustworthy and defended when challenged (Venkatesh, Brown, & Bala, 2013). To broaden and strengthen the researchers’ understanding of the research conducted in this study, the validation strategy of triangulation not only helps to establish the validation within the study. Triangulation permits collected data corroborated with the use of cross-verifying information from two or more sources. Triangulation assures to individuals the reliability and credibility collected from the data in the study. Applying the principles of triangulation to the gathered data aids in utilizing the method of analyzing and presenting the importance of understanding how gentrification affects small business owners (Foster, 2012; Rennie, Venville, & Wallace, 2011).

Findings

The primary research question was as follows: How can small business leaders adapt with demographical changes brought by gentrification? The findings of the investigation revealed the redevelopment of a community caused by gentrification affected how small business owners operated their businesses. Many of the business owners in the small business community were forced to relocate or go out of business because of the rise in the prices because of gentrification and the entrance of big chain stores in Harlem, New York.

The participants’ responses to the interview questions revealed the issue of gentrification has an impact on those that live and operate a business in the community undergoing gentrification. Literature written on the issue of gentrification stated that gentrification displaces those living and operating a business in the gentrifying community (Lees et al., 2008). The participants’ responses illustrated how gentrification changes the landscape of the community impacts the residents and small business owners of the gentrifying community.

The issue of gentrification affects everyone in the community. Each person that experienced the issue of gentrification has an emotional tie to gentrification whether it is good or bad. Some have a positive view while others have a negative view on the gentrification issue. Some viewpoints on the issue of gentrification describe gentrification’s influence on the community as a benefit for the community. Other viewpoints associate gentrification directly with the displacement of existing residents and small business owners. The participants who had positive viewpoints on the issue of gentrification stated gentrification brought positive changes to the community. The participants who had negative viewpoints on the issue of gentrification saw gentrification as the demise of small businesses and having a heavy influence on their customer base. Many of the participants explained the displacement of customers and the displacement of other small businesses in Harlem because of gentrification. Each of the participants had strong feelings toward the issue of gentrification and expressed the impact of gentrification throughout the community.

The changes in demographics caused by gentrification have an influence on how small business owners operate their businesses. Often time, small business owners cannot compete with the changes in the demographics brought by gentrification. The participants stated that the change in demographics had an influence on how they operated their business. The outcome of changes in the demographics was the same. The change in demographics affected their customer base. Some participants saw a decline in their customer base while others saw an increase.

Gentrification has had a strong impact on the small business community. Gentrification caused many small business owners in the community to close or relocate their business because of displacement and rises in rent prices. Unsustainable increases in rent prices led to change in the landscape of the small business community through closures and relocations of small business.

In regard to getting governmental assistance to help adapt to gentrification, the participant responses revealed that some help is available for small business owners. Some participants stated they were not involved with gaining governmental assistance. A few stated the government is reason for gentrification. There was not much trust in the local government. The small business community of Harlem is in need of assistance to help withstand the pressures brought by gentrification. The assistance for the small business owners is limited. The assistance programs to help businesses have many requirements to qualify for the assistance. Many small business owners do not meet the requirements.

Summary and Implications

The results from the case analysis revealed that the issue of gentrification does affect how small business owners operate their business. Gentrification affects not only the longtime residents of Harlem but also the small business community. The small business community in Harlem, New York, has a high level of displacement. The findings from the interviews identified how deep an impact the issue of gentrification has on the small business community. When small businesses close because of gentrification, jobs are lost.

Gentrification caused many small businesses to relocate or close because of the rise in rents and forced relocation from failed lease renewals with property owners (Freeman, 2006). Gentrification has many residents and small business owners asking themselves how are they going to afford the rises in the rent prices and adjust to the changes brought by gentrification. The implication of many current and former small business owners and residents is that property owners are forcing small business owners to move by raising the rental prices. A high level of business closings exists in Harlem, New York, while new businesses and stakeholders are developing.

Gentrification brings changes in development and the structuring of a community (Tatem, Gething, Smith, & Hay, 2013). From the responses of the participants in the study, the changes brought by gentrification may not benefit the longtime residents and the small business owners. The need for better policies to help small business owners adapt to changes and protect them from the changes brought by gentrification is evident in the finding. Many small business owners are going out of business because of the demographical changes caused by gentrification (Curran, 2010). Some of these small businesses struggle to adapt to the changes caused by demographical change (Zukin, 2010). With the implementation of gentrification, the livelihood of many small business owners is threatened.

Gentrification is a complex issue that brings out many emotions from those affected by the issue of displacement and developmental changes. The viewpoints and opinions vary on the issue of gentrification. Some people see the positives that come with gentrification (i.e., new residents and remodeling abandoned buildings) as a way to make the community safer. Others see the issue of gentrification as a way to displace existing residents. Gentrification has had a significant effect on both the residents and the small business owners in Harlem, New York. The arrival of retail giants because of gentrification brought the demise of many mom and pop stores and forced some to relocate. Gentrification forces many small business owners into survival mode. In survival mode, the small business owners and residents must determine how to adapt and adjust to avoid displacement.

The specific problem is small business leaders lack the knowledge of how to adapt when faced with the issue of gentrification. Upon interviewing the participants, some participants did not have a strategy set in place to help them adjust to the demographical changes that might occur when a community redevelops. When creating a business plan or strategy, business owners need a plan in place that will help them adjust to the changes that might occur to their customer base. The strategy should consist of plan that helps the small business owner adjust to unexpected circumstances. Many of the participants were not prepared for the redevelopment or the gentrification of Harlem. Being unprepared and not planning for the unexpected can have an impact on a business. The issue of gentrification is something that many do not expect to occur in a city. However, a small business owner must have an adaptable plan in place to help adjust to the unexpected changes in the community brought by the issue of gentrification.