Small Business, Big Dreams

If you have noticed that one of your local "mom and pop" stores has disappeared recently, you're not alone: in many areas, retail rents are rising, driving small businesses out of the communities they serve. Gentrification and competition from large chains exacerbate this challenge, displacing neighborhood businesses and making it more difficult for new entrepreneurs to find affordable retail spaces.

Vibrant neighborhoods are built and run on small businesses. When local businesses close, residents lose access to critical goods, services and jobs. These tangible impacts do not even reflect a broader loss of culturally and ethnically diverse commercial corridors, which have preserved the unique character and fabric of neighborhoods for generations. This increasingly rare and valuable cultural and ethnic diversity promotes social connections and cohesion among residents and visitors alike.

For the roughly 2 million Asian American and Pacific Islander (AAPI)-owned businesses in the U.S. today, entrepreneurship is an important wealth-building pathway. AAPI immigrants start businesses at a higher rate than the general U.S. population, yet they faces significant obstacles to business growth, including language barriers and limited access to capital. Across six major urban markets, more Asian business owners of color (41,988) are approaching retirement than Black (5,362) or Latino (22,051) proprietors.

The National Coalition for Asian Pacific American Community Development (National CAPACD), a member of the Asset Building Policy Network (ABPN) – a network founded and supported by Citi Community Development – is an advocacy organization that advances the economic empowerment of the AAPI community. These efforts to follow trends among AAPI small business owners have led us to take a closer look at the impacts on communities of wealth loss and the need to support and preserve local small businesses. Small Business, Big Dreams, a report by National CAPACD and supported by Citi, highlights how entrepreneurship is a critical asset-building pathway for many members of the AAPI community.

The study explores a variety of policy and practice solutions aimed at the retention and preservation of greater numbers of small, culturally-relevant businesses as community cornerstones vital to the growth of local economies. Combining analyses of federal data with primary data collected from seven regions across the country, stakeholder interviews and client surveys, the report makes a significant contribution to our understanding of how small businesses provide opportunities to the entire AAPI community. Such data is key to supporting the growth, preservation and affordability of the countless small businesses that remain socio-economic pillars of AAPI and other immigrant communities, as well as communities of color.

This spring, Citi and National CAPACD joined local and federal representatives and advocacy organizations at a policy roundtable to explore the findings of the report and discuss solutions. Congresswoman Grace Meng (D-NY) participated and shared how the research and conversation align with her policy priorities. "Small business is a priority for me because I represent a vibrant district built by small businesses. Reports like these are so important for policy makers because we are not the experts, and we look to you for critical data." The event took place in Flushing, Queens, where approximately two-thirds of the population is foreign-born. The neighborhood is well-known for its thriving business sector comprised of many restaurants, bakeries and specialty stores owned by members of the AAPI community.

Citi's and the National CAPACD's shared goal is to help retain and preserve those businesses, especially those in lower-income neighborhoods, which face the constant threat of displacement. One proven way for businesses to avoid that undesirable outcome is by promoting business enterprises that are owned and governed by their employees. This is why Citi supports numerous nonprofits that provide technical assistance and lending nationally to small businesses and their owners determined to stay in operation and ultimately become employee-owned.

Because challenges of this scale are far too big and complex for any one organization to take on alone, we need to work across sectors on practical and effective solutions to the negative impacts of gentrification on local small businesses and their communities. This recent convening was an important first step on a collaborative path toward building more inclusive and vital communities.