The Impact
The businesses most often affected by commercial displacement are small and minority businesses, particularly those in the retail and service sector. As these businesses cater to the local market, they are sensitive to a change in customer base. When the neighborhoods experience housing redevelopment and/or price increases (i.e., residential displacement), the local business community is impacted as well.
Furthermore, many do not own the properties in which they are located, leaving them vulnerable to rent increases and often lack the expertise in real estate negotiation. Businesses that reflect the local demographic are referred to as cultural businesses while businesses that have been in existence in those locations are called legacy businesses. Certainly, there are cultural legacy businesses that have shaped the neighborhood business community in many areas.
These existing small businesses fulfill the needs of the residents for goods and services ranging from grocery stores and gas stations to specialty food/beverage and home furnishings to banks, pharmacies, and laundromats to clothing and other goods. These small, locally owned businesses add more than goods and services.
They can add to the neighborhood’s unique character and cultural identity, with products and services geared to the needs, tastes, and desires of residents; provide local employment opportunities; create generational wealth for the business owners; and give back through neighborhood programs and other investments. Arguably, they serve a social function as well – where owners and customers build relationships and trust, create specialized buyer and supplier networks, and the locations become ad hoc community spaces.