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Why do retailers, restaurants and grocery stores stay out of communities that can afford (and want) them?

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.

There's a term for the phenomenon he's describing: retail redlining. The practice is a more recent and less studied variation on redlining as it's been historically recognized in the housing sector. In the context of retail, grocery stores, and restaurants, redlining refers to the "spatially discriminatory practice" of not serving certain communities because of their ethnic or racial composition, rather than their economic prospects.

It's a newer phenomenon in part because there are more upper-income minority communities in America today. Households that can afford the same stores and restaurants as comparable white communities now want to know where the retailers are. The practice is tricky to study, though, because these types of communities are still relatively few in number (with hard-to-find comparison communities), and because it's difficult to distinguish a retailer's "unconscious racism" from its legitimate business reasons for locating a store or a restaurant.

Olympia Fields and three adjacent south suburbs wanted to better understand this phenomenon (and if it really existed). So they undertook a quarter-of-a-million dollar, multi-year study in conjunction with researchers at the University of Illinois. In the 1960s, these four suburbs had almost no black residents.

By 2010, 72 percent of the population was black, with three of the communities having above-average income levels for the county. These are among the most racially mixed higher-income communities in the region. Collectively, they spend an estimated $780 million a year on retail goods and services – and because much of that is spent elsewhere, that also means these communities don't fully benefit from sales tax receipts.

"What we’re dealing with essentially is attitudes, behaviors, cultural bias," Mekarski says. "This is not simply a study about the convenience of shopping. Retail in America is about community, it’s about a sense of place, it’s about quality of life."

The researchers tried to approach a seemingly immeasurable question (is there racial bias here?) by examining case studies of retail outlets that had recently left these communities; by studying stores that one would expect to find in these places based on their buying power; and by comparing the quality and variety of merchandise in stores in this area compared to identical brands elsewhere.

The researchers concluded that the location decisions of businesses were so complicated (involving varied property tax rates, the co-location of related retail, and the presence of daytime workers) that their demographic and survey data was inconclusive. "However," the researchers wrote, "findings do suggest that race may be a driver or mitigating factor in some retail decisions."

In conversations with regional developers, Mekarski says, it's apparent that many of them fail to distinguish these upper-income minority communities from poorer minority areas to the north.

"In our community, we are trying to change the perception of what it means to be in a black community," he says. To demonstrate his point, he often asks people to close their eyes and picture a black community, and then a white one. "Contrast the juxtaposition of those two communities," he says. "That’s what we’re fighting. We’re fighting with a national retailer sitting in Atlanta, or L.A., and when they think African American, they think 'poor, uneducated, high shrinkage, high crime.' They're thinking it’s going to be a poor investment, and they move on."

The study's ultimate conclusions don't necessarily fault retailers but charge places like Olympia Fields with better marketing themselves (as well as having an open conversation about race in retail).

"We’re trying to say our money's not black, our money’s not white," Mekarski says. "It’s green."

Top image: Ibooo7/Shutterstock

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