Planning for the growing wealth of diversity in the United States

As the United States gets more diverse, ethnic and racial minorities are controlling more wealth.  That has some significant implications for placebuilding in the 21^st century.

A multicultural shopping district along Roosevelt Avenue in Queens, New York. (Image found through Creative Commons search.  Photo credit: Vidiot)

According to The Multicultural Economy 2010 by the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business, ethnic and racial minorities together hold about $2.6 trillion in buying power, or 23% of the $11.1 trillion in buying power in the United States.  Buying power in “multicultural economy,” as the report calls it, is growing rapidly.  In 2000, the report estimated, African-Americans, Asian Americans, Hispanics, Native Americans and people of mixed races held about 19.7% of the nation’s buying power.  The group with the biggest rise in buying power is Latinos.  In real dollars, the buying power of Latinos rose from $633 billion in 2000 to $1 trillion in 2010.

These trends could have a significant impact in how placebuilders approach such issues as place-based economic development, cultural heritage tourism, housing and circulation planning, and community building. In addition to creating new opportunities, the rise of the multicultural economy can also challenge placebuilders to change their practices.

For example: Ethnically-based economic development strategies can help revitalize commercial districts that are seeing more empty spaces as more people shop online.   Attracting businesses that cater to members of a large or growing ethnic group in the area can create a more loyal shopping base.  Eventually, as with so many Little Italys or Chinatowns, successful business districts can attract cultural visitors, whose wealth would attract more businesses.

Sounds easy? It’s not.  Small, independent businesses tend to be more fragile than established chains and franchises.  Expect to get tense responses from businesses and residents from other communities, especially those that are losing political or economic power in the community.   And the new ethnic communities will want their values and aesthetics represented.  The design guidelines meant to make the town square look like a Norman Rockwell painting may need to be revisited – or scrapped.

So if you’re a placebuilder in this community, you might be doing more business assistance than pro formas, more conflict management than market analysis, and rethinking the ideas about prescriptive urban design.

Placebuilders should also work to avoid ethnic pride becoming ethnic exclusion.  With a few exceptions, most ethnic commercial districts probably would not prosper in the long-term if they are perceived to be hostile to outsiders.  Many businesses rely on at least some revenue coming from outside of the area.   Those that don’t benefit from having neighbors that get good foot traffic.   From a community development perspective, these ethnic districts will work better if they work more as gateways among cultures than as barriers. 

In most parts of the country, African-Americans and Latinos tend to have lower median household incomes than Non-Hispanic Whites and Asian-Americans.  So a strategy to build on African-American or Latino wealth could mean increasing housing densities and managing greater demands on roads and public transportation. 

While there are a number of successful African-American and Latino commercial districts geared to working-class communities, the growing number of high-earning minority households creates opportunities to build more upscale ethnic districts.  There are restaurants, boutiques and other businesses that serve these markets, and could help anchor these districts.

Another strong anchor is a set of public art, stores, restaurants and services (such as a music school) that is rooted in the arts and culture of the communities being celebrated.

But here again there are challenges.  The strategy will probably work best in areas with large ethnic or cultural populations with struggling commercial areas.  But it would likely involve gentrification of some streets, which could make placebuilders vulnerable to charges of elitism.

But there’s a good community building argument for having some wealthy ethnic districts.  What message do low-income African-Americans, Latinos or other ethnic minorities get when they see wealth exclusively in what they would call “White” neighborhoods?  Does this message help build the confidence and pride that lead residents to want to strengthen their neighborhoods?  Or does the message encourage those most capable to leave – and take their financial, social and creative capital with them?   

New Jersey is one of several states that are getting both wealthier and more diverse – and much of the growing wealth is due to diversity.  According to the Selig Center, total buying power (in real dollars) grew 19% between 2000 and 2010.  Only 7% of that was due to the growing wealth of non-Hispanic Whites.   Ethnic minorities in 2010 have about 27% of the state’s $399 billion in buying power.

At least 32 of the state’s 566 municipalities are potential ethnic or multi-cultural power centers.  These communities are either “majority-minority” or are have no predominant ethnic group.  With the exception of major urban centers like Newark, Jersey City or Camden, many of these municipalities are caught in the middle between large centers that have more resources and get more attention from decisionmakers and suburban areas that have more wealth.   These power centers can benefit from ethnic-oriented economic and community development that could attract attention and dollars.

--Leonardo Vazquez, AICP/PP