Small businesses provide significant community benefits. They boost the local economy, contribute to civil society and help to define the cultural identity of a place — the sense that a neighborhood is unique. Rightly or wrongly, chain stores are perceived as a threat to all of this.
But while Starbucks and Whole Foods are convenient villains in the narrative of neighborhood decline, blocking chain stores alone is not enough to save a community’s small businesses. Armed with a decade’s worth of business directory data, our research team at Hunter College mapped commercial changes in Brooklyn between 2002 and 2012, curious about where and why small businesses were displaced.
Here’s what we found. Although isolated chain stores chip away at mom-and-pop shops, the most substantial displacement of independently owned business occurred in areas that were rezoned by the city and rebuilt by private developers. In these neighborhoods, commercial turnover was less of a “slow burn” than a slash-and-burn.
When the city adds commercial space through rezoning, landlords receive an incentive to redevelop or sell their properties and replace existing commercial tenants. If big commercial storefronts are included in a rezoned area, national chain stores are likely to swoop in.
The city can do something about this as well. The Small Business Jobs Survival Act, currently under consideration by the City Council, would grant commercial tenants more leverage in their negotiations with landlords, extend commercial leases and protect business owners from rent gouging and under the table extortion.