April 27 2011

Julie Gunlock

Reason's Michael Moynihan examines the battle to bring Whole Foods to one gentrifying Boston neighborhood in the Wall Street Journal (read it on Reason.com if you don't have a WSJ account).  Moynihan explains that when the increasingly yuppified neighborhood's only grocery store (a multinational chain called Hi-Lo that stocked staple items and mostly Latin American products) decided to close and lease their space to grocery giant Whole Foods, local community groups objected saying Whole Foods is "keeping multinational chains out," and that the addition of this high-end grocery store will result in higher rents, pushing low-income residents from the neighborhood.

It's a common refrain from these activists who like to act like they're looking out for the little poor guy but in reality, the theory that gentrification leads to higher rents doesn't flesh out.  Moynihan reports: 

[Community Activist] Ms. Pardew admitted that there "isn't a lot of academic research" to back up the claim that stores like Whole Foods destroy low-income, ethnic communities. In fact, evidence points in the opposite direction: "To blame gentrification for rising rents is to get things exactly backwards," says Duke University economist Jacob Vigdor. "Companies like Whole Foods are building in places where the clientele is there already. They follow the customer."

When studying gentrification patterns in Boston, Mr. Vigdor investigated claims that elevated rates of neighborhood departure correlated with rising rents. "Actually, I found that in the gentrifying neighborhoods, the turnover rate among long-term residents was actually lower than it was in other parts of the city," because most residents see changes like lower crime rates and the revivification of derelict buildings as positive developments.

"People think that gentrification is causing prices to rise, when it's actually the reverse. In cities that are popular places to live, where demand exceeds supply, and prices go up all over the place-this leads people to seek out neighborhoods that are less expensive," says Mr. Vigdor.

And Moynihan challenges the idea that the multiethnic grocery store so beloved by the activists was so great; examining what benefits it offered its employees and the quality and prices of the products sold.  

Did Hi-Lo provide health care to its 40 employees? Anti-Whole Foods activist Ms. Pardew admits she doesn't know, adding that "the stories we hear from [Hi-Lo] employees is that they weren't great employers."  

In contrast, last year Whole Foods ranked 18th on Fortune magazine's "100 best companies to work for." The company will provide health care to 70 of the 100 employees in the J.P. store. And while activists complain that the store "is unaffordable to many families in Jamaica Plain," an informal survey by Boston Globe blogger Rob Anderson found that "Comparable pasta, cereal, and soap products were all cheaper at Whole Foods than at Hi-Lo, and the store much vilified as 'whole paycheck' had the cheapest milk of any store in the city.".  

One resident of the neighborhood-a Cuban-American woman (no doubt one of the people the activists feel needs to be protected from the big bad corporate grocery store) doesn't have the same dreamy memories of the Hi-Lo grocery store, saying: 

"I bought my Spanish food at Hi-Lo," said Aida Lopez's daughter Rosa, "but just the Cuban stuff and milk." She wrinkled her nose: "The meat wasn't fresh." All agreed that Jamaica Plain needed more shopping options-chain store or otherwise. 

So what are these activists protecting?  Substandard food?  Higher prices?  Businesses that don't provide their employees health benefits? 

The First Lady loves to bandy about her (incorrect) statistics that 23.5 million Americans live in areas without easy access to healthy food.  She continues to push her $400 million healthy food financing initiative which would hand out millions of dollars in taxpayer money to grocery stores to locate in poorer areas.

It's too bad the First Lady fails to understand that government doesn't need to get involved in this so-called problem as it's clear grocery stores already want to enter poorer urban areas.  Perhaps she might consider a cheaper solution-asking these activists to stand down and stop the promotion of food deserts. 

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