The Approach

On this page:
Why this approach?
Creating and retaining jobs
Making the best use of human capital
Preserving cultural vitality and economic diversity
Maintaining community engagement through a sense of place
What are the risks or arguments against this approach?

Why This Approach to Tackling Commercial Gentrification?
Seattle’s Comprehensive Plan names three core values of equitable development: Community, Economic Opportunity and Security, and Social Equity.[1Creating and maintaining permanently affordable commercial space advances all three of these values, while also empowering historically disadvantaged communities to control the direction of community development in their neighborhood.

This approach creates and retains jobs in the community, makes the best use of current and future human capital, preserves cultural vitality and economic diversity, and maintains community engagement through a sense of “place” for residents.

These four motivations for using this approach are briefly discussed below.

Creating and Retaining Jobs
The two groups that will most directly benefit from permanent commercial affordability are entrepreneurs looking to start a business and existing business owners. Permanently affordable commercial space preserves small business ownership as an employment pathway – a pathway that provides flexibility and asset building opportunities. This approach embodies a main goal of Seattle’s Economic Development Commission (EDC), which is to “preserve the entrepreneurial spirit and openness to new ideas that allows people to think and act in ways that challenge convention.”[2]

Making the Best Use of Current and Future Human Capital in the Community
By allowing successful local businesses to remain in their communities, this approach taps into the talent and expertise already present in the area. In the same way, providing entrepreneurial opportunities to community members allows those people well-suited for this role to succeed and contribute to preserving the community’s unique identity. Because a central objective of economic development is to “provide quality jobs for the current population”[3], local policies should take advantage of existing knowledge and labor capacity within a community.

Preserving Cultural Vitality and Economic Diversity
As mentioned before, high rents prevent the entry of potential local entrepreneurs into the market and force out existing businesses. Especially concerning is the displacement of “anchor businesses” which can have meaningful ties to community residents and act as cultural centers.[4] Cultural vitality and economic diversity, as well as equity and social justice, can be thought about as “public goods” that are under-produced in the market system. Using this framework, small businesses in culturally diverse area facing gentrification can be seen as “producers” of two things: 1) the actual goods or services sold, and 2) their contribution to the maintenance of a diverse and culturally rich area that provides a sense of place to residents. Because this second kind of good is not reflected in the price of actual goods sold, the demand for these public goods is not fully accounted for. Through intervention, we can increase the viability of these businesses that provide the public goods of diversity and cultural vitality.

Maintaining Community Engagement and a Sense of “Place”
Encouraging the long-term stability of businesses results in a greater sense of community identity. To take this a step further, the loss of local businesses may actually hasten residential gentrification. As community members’ ties to a neighborhood, such as their churches or ethnic grocery stores, are further weakened by displacement, community members may be more likely to move to another area, which then leads to even more cultural displacement. There may also be negative individual consequences in the form of health outcomes[5] and emotional well-being[6] from people being uprooted. In other words, when people feel less connected to and supported in the place they live, there are real changes to the health of the person and the community. Ultimately, permanently affordable commercial space, together with community-based commercial leasing, is a way to empower historically disadvantaged communities.

What are the Risks or Arguments Against this Approach?
This approach of preserving or creating permanently affordable commercial space has some risks and may face opposition. Below are a few arguments that may be made against this approach, as well as counter-arguments that support permanently affordable commercial space.

  • Argument: This approach prevents land from being used for its highest and best use, as defined by unregulated market economics.
    Counter-Argument: Intervention in the market is necessary to ensure equitable development. Permanently affordable commercial space can create public benefits that may not be measured by simple supply and demand economics. We suggest using a Quadruple Bottom Line (QBL) framework to evaluate these alternative public benefits.
  • Argument: This approach exercises too much control over the market, allowing decision-makers to influence the existence of businesses. Market demand is being overlooked for the purpose of designing a community around one group’s idea of what should exist. There is a fine line between ensuring opportunity and diversity and a strict proscription of the types of businesses each neighborhood “should” have. As decision-making power is concentrated into fewer and fewer hands, fairness of implementation becomes a major concern.
    Counter-Argument: Many tools within this approach call for community engagement to be held as a high priority in the decision-making process. Decision-makers, particularly those coming from outside the community (e.g. citywide elected officials, non-profit or city staff), should take great care to make sure that the broad community’s needs and desires are considered throughout the decision-making process and beyond.
  • Argument: This approach may support businesses that do not run effectively or no longer meet the demands of the population.
    Counter-Argument: A few tools within this approach can be used to ensure currently inefficiently-run, but high-demand businesses are given technical assistance and financial resources, so that they can become more efficient and profitable. As for those businesses that no longer meet the demands of the population, other tools within this approach may provide entrepreneurial opportunities for business owners to adapt their businesses to changing demands, or find new markets altogether (as with mobile vending).
  • Argument: Public funds should not be used to support individual, private companies.
    Counter-Argument: While this is a valid concern, when community values in neighborhood plans place high importance on supporting locally owned and culturally appropriate businesses, investment of public funds in permanently affordable commercial space may be warranted. While Washington restricts using public funds for private benefit, there is precedent for providing public funds to private firms if the “poor or infirm” are the primary beneficiaries, or in cases where the public benefit is much larger than any to a private firm.[7]

Sources

[1] City of Seattle Department of Planning and Development. “City of Seattle Comprehensive Plan.” January 2005.

[2] City of Seattle Economic Development Commission. “Executive Summary.” 2014.

[3] Blakely, Edward and Nancey Green Leigh. Planning Local Economic Development: Theory and Practice 5th Edition. 2013. Thousand Oaks, CA: Sage Publications.

[4]  Initiative for a Competitive Inner City. “Anchor Institutions and Urban Economic Development: From Community Benefit to Shared Value.” 2011.

[5] Keene, Danya E. and Arline T. Geronimus. “‘Weathering’ Hope VI: The Importance of Evaluating the Population Health Impact of Public Housing Demolition and Displacement.” Journal of Urban Health. June 2011; 88(3): 417-435.

[6] Ferreira, Rosemary. “‘Bushwick was Mine,’ ‘Bushwick es Mio:’ Gentrification and the Emotional Displacement of Latinas.” Bard Digital Commons. 2014

[7] Pittman, Kenny, WA House of Representatives. “Constitutional restraints on economic development incentives in Washington state.” Housing and Trade Committee on Economic Development. Oct 2000.

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