Retail Redlining Is Reshaping Communities


Several years ago, when the annual American Planning Association conference visited Chicago in the 1990’s, I slipped into one of the conference sessions.  It was led by two planners from Prince George’s County, Maryland, outside of Washington, DC.  In their session they recounted how a significant demographic transition was taking place in the county at the time — middle income white residents were moving out of the county for places further out, and middle income and upper-middle income African-Americans were replacing them.  In fact, through their research, they were finding that the new residents were bringing in higher household incomes than the ones moving out.

Yet another interesting phenomenon was taking place.  Many PG County retailers recognized the demographic shift as an opportunity to move outward as well, and started to do so.  The PG County planners saw the higher income residents moving in as an opportunity to attract a different type of retailer to the area, but had absolutely no success.  How, they asked, could the numbers work in favor of better quality retail in the county, yet no one would take a chance there?

That was my introduction to retail redlining.

Fast forward to the 2013 APA conference in Chicago, and Village Administrator David Mekarski of Chicago’s south suburban Olympia Fields made a similar presentation, recounted by Emily Badger at CityLab last year:

David Mekarski, the village administrator for the south Chicago suburb of Olympia Fields, told a startling story this week at the American Planning Association’s annual conference about a debate he recently had with a restaurant official. Why, he wanted to know, wouldn’t quality restaurants come to his mixed-race community, where the average annual household income is $77,000, above the county average?

The reply: “Black folks don’t tip, and so managers can’t maintain a quality staff. And if they can’t maintain a quality staff, they can’t maintain a quality restaurant.”

A gasp then rippled through the room in front of Mekarski. “This is one of the most pervasive and insidious forms of racism left in America today,” he says.

Mekarski is right — it’s pervasive, it’s insidious, and for the most part, it’s still legal.

I’d surely felt it long before I understood it.  My parents lived in Chicago’s south suburban South Holland from 1987 to 1997, and were there when that part of the Chicago area underwent a similar transition.  When the phenomenon is applied to a lack of grocery stores in a given area, it’s often given the name “food desert”.  And in the dozens of neighborhood plans I’ve done in South Side and West Side neighborhoods in Chicago, one of the highest priority amenities people want there is a “nice, quality sit-down restaurant like they have on the North Side.”

Is there a technical definition for retail redlining?  A paper entitled “Retail Redlining: Definition, Theory, Typology and Measurement” produced by Denver D’Rozario and Jerome D. Williams for the Journal of Macromarketing in December 2005 defined it this way:

Retail redlining is a spatially discriminatory practice among retailers, of not serving certain areas, based on their ethnic-minority composition, rather than on economic criteria, such as the potential profitability of operating in those areas. Consequently, consumers in these areas often find themselves “vulnerable” because no other retailers will serve them, or they are exploited by other, often smaller, retailers who charge them higher prices and/or offer them inferior goods. 

The second part of the quote above refers to the impact of retail redlining on residents where the practice is implemented.  The vulnerability is actually two-fold: 1) residents of retail-redlined areas have to travel further for goods, and 2) end up paying higher prices for inferior goods for convenience’s sake.  The ramifications?  An acceleration of the cycle of disinvestment.  Poorer health, where differences in food quality are involved.  Less complete communities.

There are many reasons that can be used as justification for retail redlining.  Security is often given as one.  Ill-advised notions like the one David Mekarski refers to above are another.    But what I think it comes down to are the perceptions and biases built into the models that retailers, banks and developers use to make investment decisions.

Retail redlining may be on its last legs, however.  City growth over the last twenty years has caused retailers, banks and developers to revisit the models that made them prosperous in the suburbs and create templates for successful urban development.  But it’s not completely gone.  If minority growth in the suburbs continues to accelerate, we may see the continued withdrawal of retailers from stagnant suburban locales as they try to make a dent in growing urban markets, once again leaving a significant chunk of minority residents with few retail choices.

We’ll know in a couple decades.

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