Modern Day Gentrification: How Accelerates Gentrification

A Research Paper in STS 4600 Presented to The Faculty of the School of Engineering and Applied Science University of Virginia In Partial Fulfillment of the Requirements for the Degree Bachelor of Science in Systems and Information Engineering

By

Tiffany Nguyen

April 10, 2020

On my honor as a University student, I have neither given nor received unauthorized aid on this assignment as defined by the Honor Guidelines for Thesis-Related Assignments

Approved by Prof. Kent Wayland, Department of Engineering & Society

Introduction:

Dramatic change has been occurring in urban neighborhoods throughout America.

Gentrification, the process of renovating and improving an urban district to conform to middle class standards, has been on the rise with around twenty percent of lower income urban neighborhoods experiencing gentrification since 2000 (Maciag, n.d.). Heated debates have revolved around the disruptive nature of gentrification: that it leads to displacement and contributes to segregation while allowing for a richer middle class to move in (Larsen & Hansen,

2008). On the other hand, policy makers assume that it would result in more socially mixed sustainable, and less segregated communities (Lees, 2008).

Recent research has shown that smartphones, particularly location-based apps such as

Yelp, are speeding up gentrification in urban neighborhoods across the United States (Charles,

2018). Yelp is a popular business directory app with 36 million users that allows consumers to discover, connect, and review local businesses (Yelp—Company—Fast Facts, 2019). As the number of users continue to increase, Yelp has become an influential platform that acts as the mediator between consumers and providers. Therefore, my paper will study the effects and mutual shaping of Yelp on gentrification in urban neighborhoods in order to understand how different social groups and communities are affected.

Background/Context of the problem:

Gentrification is typically seen as a movement that converts working-class areas of a city to middle class social norms. In the United States, gentrification is equated to poverty deconcentration with a focus on removing high-density housing projects in low socio-economic neighborhoods and replacing them with socially mixed income communities. Three common

1 policy debates for social mixing that policymakers have are that middle-class people have a greater concern for public resources, mixed neighborhoods have a stronger local economy than areas of poverty, and social mixing will promote social unity and diversity (Lees, 2008).

However, gentrification oftentimes unintentionally disrupts and leaves a negative impact on local neighborhoods. For example, the HOPEVI initiative in Washington, D.C. has been criticized for not facilitating and aiding the local displaced community after gentrification through the tear down of 63,000 units and redevelopment of 20,300 units (Atkinson, 2005). Instead, affordable housing units were reduced and the poor local community was excluded from the newly revitalized neighborhood, allowing wealthier people to move in. This resulted in the displacement of numerous low-income families leaving them in a state worse than they were in before.

There are several forms of gentrification, the major one is the transformation of industrial sites into new build developments. The second form is urban redevelopment, the process of creating more affluent and middle-class housing in low-income neighborhoods. In this case, gentrification is used as a policy tool to create social mixing in order to promote inclusivity of varying incomes, cultures, and lifestyles. Although gentrification is primarily housing-oriented, research has started to focus on other aspects that impact neighborhood transformations.

Commercial gentrification represents the lifestyle and values of residents (Doucet, 2014). As residential demographics change, so might the business landscape because it is based on local demand. Gentrifying neighborhoods might also attract more upscale businesses, shifting the composition of businesses from downscale to upscale (Glaeser et al., n.d.).

Therefore, this paper will focus on commercial gentrification from Yelp, and how local business activity can impact gentrification. Yelp is a popular online directory and app founded in

2

2004 that allows users to discover different types of local businesses. The framework for Yelp was built on a database of 20 million business locations where people could submit unsolicited reviews. Yelp stood out from other directory sites because it encouraged people to share reviews among their social network (Bowman, 2017). These reviews present consumers with information about experience goods that is only available after consumption. Information about a variety of experience products is easily obtained from other consumers (Luca, 2011).

Literature Review:

Current research has shown that online reviews have a systematic problem with a bimodal distribution of extreme and biased views that are over-represented. The majority of Yelp consumers leave either extremely positive or negative reviews but few moderate opinions; many people do not find it worth the time and effort to leave a review if they are not strongly opinionated. The success of local businesses can be greatly impacted as these biased reviews do not accurately reflect the majority opinion on an establishment (Klein et al., 2018). This could impact local neighborhoods and the economy as these biased reviews have the power to increase or decrease consumer traffic, ultimately contributing to commercial gentrification. However, there is currently no research that considers the relationship between biased reviews and gentrifying neighborhoods. Therefore, my research seeks to address the gap in knowledge of whether there is a connection between biased Yelp reviews and gentrifying neighborhoods by analyzing the different factors of biased reviews and evaluating if there is a relationship with gentrification.

3

Data Collection Approach:

My STS research question is, “How is Yelp speeding up gentrification in urban neighborhoods?” In order to address this question, my approach is to analyze content from scholarly articles, news articles, and Yelp to understand the social and economic impact that

Yelp has on gentrification. I select pieces of literature and articles that discuss how Yelp and online restaurant reviews are impacting gentrification and the economy of local neighborhoods.

Furthermore, to address the gap in knowledge of whether there is a connection between biased

Yelp reviews and gentrification, I select scholarly and news articles that addresses who, where, and why people leave biased reviews in order to see if bias reviews have an effect on gentrification. If there is a connection between biased reviews on Yelp and gentrification, then I look at current Yelp policies to illustrate the steps that Yelp is taking to protect businesses and users to reduce gentrification. Ultimately, I will analyze these readings to understand how different social groups and communities are affected by gentrification from Yelp.

Results and Discussion:

Yelp Reviews on Gentrification: Who, Where, and Why?

In order to understand the relationship between Yelp reviews and gentrification, it is important to identify the demographics of reviewers, the areas that are vulnerable to gentrifying from Yelp reviews, and why Yelp has the power to gentrify neighborhoods. The average Yelp users are predominantly middle to upper middle-class college graduates; 51% of Yelp users make $100,000 or more and 64% received some college education (Yelp—Company—Fast

Facts, n.d.). Oftentimes, reviewers and the people attracted by reviews, are not from these neighborhoods; they seek these areas because they are looking for authentic businesses. This is a

4 problem when reviewers judge the “authenticity” of local restaurants by expecting ethnic food to taste a certain way. Unfortunately, these reviews reflect a culture that supports white supremacy and existing racism. When reviewers are seeking authenticity, they are mentally referencing previous experiences or the media, which reflects existing racism and biases. In fact, restaurant owners have changed their menus to cater to positive or negative reviews and suggestions from

Yelp users. (Kay, 2019). As a result, reviewers could impact the local producer and consumer relationship by influencing what type of food or services a business offers.

Furthermore, reviewers tend to focus on the internal aspects of a business but when they do mention the external factors, they tend to judge the safety and ambiance of local neighborhoods. Research on the gentrification of Greenpoint and Bed-Stuy, two gentrifying neighborhoods in Brooklyn New York, has shown the racial biases of Yelp reviewers. Although both are deemed as “up and coming” neighborhoods, Greenpoint, a historically white and Polish neighborhood, was described by many as a mix of old and new cultures that have managed to preserve the Polish culture. Meanwhile Bed-Stuy, a historically African-American and Hispanic neighborhood previously deemed “sketchy” and “ghetto,” is described as a neighborhood that is transitioning from bad to good (Zukin et al., 2017). This contributes to an overarching problem of racial biases that are reflected in Yelp reviews (Bayly, 2015).

Therefore, gentrification can occur in any low-income neighborhood typically with businesses that are rising in popularity on Yelp. The onset of gentrification brings in more mainstream businesses to cater to the change in demographics and local demand. Research has shown that proximity to main stream businesses such as , corresponds to a 1.4 percent increase in housing prices in local neighborhoods (Glaeser et al., n.d.). This poses a concern for economic development since renovations and incoming businesses bring in wealthier, younger,

5 and predominantly white residents that lead to a rise in housing prices. This effects the local community as longtime residents are forced to move out because they can no longer afford to live in the area anymore. Thus, gentrification from Yelp can bolster economic inequality from residential segregation by social status. Unfortunately, gentrification occurs at such a fast rate that policymakers cannot respond in time to protect local residents (Fleisher, 2018).

Why do people use Yelp then if it can contribute to gentrification? Yelp reviewers unintentionally accelerate gentrification by drawing in people who have similar tastes. The average Yelp user is not aware of the potential impact of their actions but rather use Yelp to not only gain feedback on businesses but to gain social influence and a sense of community (Zukin et al., 2017). Yelp presents an altruistic opportunity to join a community with the power of having other people pay attention to a reviewer’s opinions. Users have the sense of giving back to local neighborhoods by bringing in more consumers (Carman, 2018). In order to raise awareness of the impact of Yelp on gentrification, it is important to dive deeper into the nature of

Yelp users and reviews.

Biased Yelp Reviews and Gentrification

Research has shown that Yelp reviews have a bimodal distribution of over-represented extreme and biased reviews (Klein et al., 2018). Do these bias reviews contribute to gentrification then? The nature of biased reviews has to be understood first in order to evaluate this relationship; who is leaving these biased yelp reviews, where is this prone to occurring, and why are people leaving biased reviews.

The majority of Yelp consumers are likely to leave reviews after extreme experiences.

Here, bias is defined as a disproportionately extreme opinion for or against an establishment.

6

Research has shown that consumers give reviews if they either really loved an experience/product or absolutely hated it. Reviewers with moderate satisfaction are less likely to leave a review, finding it not worth the effort (Klein et al., 2018). This creates an inherent bias that makes it difficult to trust the quality of reviews and can impact the success of different establishments. Crowd-source platforms such as Yelp rely on the integrity of reviews, but consumers should be aware of bias and extreme reviews while businesses should be aware that negative reviews could come from competitors. Furthermore, these biased and negative reviews could incentivize businesses with predominantly negative online reputations to try to balance the biased negative reviews by using fraudulent reviews. As a result, these fraudulent reviews are false advertisements that pose a threat to the trustworthiness of the Yelp platform altogether

(Seligson, 2013).

Biased Yelp reviews have a greater impact in small towns where businesses receive a small number of reviews. Biased reviews have a greater effect here because businesses would have to wait longer for more reviews to balance out the biased ones; however, not all businesses are equally affected. Research has shown that chain restaurants are unaffected by the reviews, while independent restaurants are greatly affected. Since chain restaurants and businesses have consistent reputations, consumers are more focused on obtaining information about local neighborhood businesses (Blanding, 2011). Why do small businesses in small towns use Yelp then? They want to increase consumer traffic and bring in revenue. In fact, research has shown that an extra star on Yelp increases revenue by 5 to 10 percent. Consumers can decrease the negative impacts of bias reviews by consistently writing reviews while encouraging others to do the same because more reviews will increase Yelp’s trustworthiness (Seligson, 2013).

7

Therefore, there is another layer between Yelp reviews and gentrification as extremely biased Yelp reviews are able to impact the economy and demographics of local neighborhoods.

These biased reviews are not an accurate representation of the majority opinion on local businesses; however, they can accelerate gentrification by increasing consumer traffic. If an establishment receives a majority of extremely positive reviews, the number of consumers will increase and can act as a catalyst to a change in local demographics. This could accelerate gentrification and impact the local communities. Gentrification is not inherently “bad,” however it would be morally unethical for the process to be accelerated by misjudgment and an inaccurate representation of the majority opinion. Thus, the following section evaluates what Yelp has done and can do to reduce gentrification through anti-bias policies.

Analysis of Yelps’ Current Initiatives

First and foremost, Yelp needs to continue to build trust with its users to counteract biased reviews in order to reduce gentrification. Yelp has taken several steps to ensure the authenticity of reviews. The “Don’t Ask” Policy penalizes businesses that actively ask their customers for reviews by moving down their pages in the search results (Erskine, 2017). This is because Yelp believes that when businesses ask for reviews, they target predominantly satisfied customers which leads to biased reviews (Don’t Ask for Reviews | Support Center | Yelp, n.d.).

However, many business owners have stated that there is a negative review bias on Yelp where dissatisfied customers are more likely to write reviews than satisfied customers. Therefore, the most effective form of biased reviews is not solicited, but ones that come from dissatisfied customers. Thus, most businesses ask their customers for reviews with the intention of balancing out negative reviewer biases. Why would Yelp enforce the “Don’t Ask” policy if soliciting reviews reduces overall reviewer bias? Josh Rubin, a managing partner of Post Modern

8

Marketing, thinks it’s because Yelp could profit from the negative reviews, which indirectly encourages businesses to become paid advertisers. These advertisers receive an increase in the number of visitors to a Yelp page, receive assistance with their page, and receive help with flagging fake reviews (Erskine, 2017).

Additionally, Yelp uses a private filtering software that identifies and removes fake and suspicious reviews. A study from the University of Chicago Illinois, found that Yelp has a 67.8% accuracy of identifying fake reviews. How does Yelp filter reviews then? Researchers think that

Yelp could be using behavioral features for filtering such as IP addresses, geolocations, social network interactions between users on Yelp, session logs, and click behaviors (Mukherjee et al., n.d.). Yelp also has a recommendation software that acts as a removal process for bias reviews.

This software evaluates every Yelp review based on quality, reliability, and user activity. Most of the useful reviews are from active users on Yelp in order to minimize the effects of biased reviews (What is Yelp’s recommendation software? | Support Center | Yelp, n.d.).

Although Yelp has several measures in place to counteract bias reviews such as a filtering software and a recommendation software, it has to do more to extensively promote unbiased reviews and build trust with its users (Blanding, 2011). Yelp should eliminate the “Don’t Ask” policy and instead encourage all users to consistently leave reviews. This would balance out the inherent biases from extreme reviews and decrease overall reviewer bias. Additionally, other types of information should be incorporated to mitigate personal and racial bias. Yelp could identify and promote reviews from locals and also incentivize the locals to review establishments in their area by partnering with businesses to offer discounts. This would balance out racial biases from users who are not from the area, who are more likely to judge the external factors of a neighborhood such as safety or whether a business is “authentic.”

9

Conclusion and Policy Implications

Gentrification is a controversial topic where some argue that it is beneficial to communities because of an increase in development and a rise in the local economy.

Unfortunately, gentrification usually leads to forced displacement, discriminatory behavior, and development of spaces that exclude the original low-income residents (Chong, 2017). Yelp plays a role as reviewers unintentionally accelerate gentrification by appealing to people who have similar tastes. The average Yelp user is not aware of the potential consequences of their actions but use Yelp to receive feedback on businesses and gain social influence with a sense of community.

Bias in this paper is defined as a disproportionately extreme opinion for or against an establishment. Yelp reviews are a bimodal distribution of extremely biased reviews that exploit and perpetuate the impact of Yelp on commercial gentrification. These reviews are not accurate representations of the majority opinion on local businesses; however, they have the ability to change the local economy and shape the demographics of local neighborhoods by increasing consumer traffic. Furthermore, businesses that have a majority of extremely negative reviews are incentivized to purchase fraudulent reviews to balance them out. As a result, neighborhoods could gentrify from reviews that might not even be real or credible; something as small as businesses purchasing fake reviews to counteract biased reviews could increase traffic and ultimately contribute to gentrification.

Gentrification from Yelp contributes to both urban redevelopment and commercial gentrification. While consumers shape the demographics of communities, it is normal for urban redevelopment to occur to shift to the demands of the people. However, it is crucial to consider

10 that the lifestyle, values, and needs of users can affect gentrification (Doucet, 2014). This is why

Yelp should take the necessary steps to minimize bias reviews, so that gentrification reflects the actual needs of the majority of consumers. Although gentrification is ongoing and there are many other contributors aside from Yelp, if locals agree to work together with gentrifiers to shape redevelopment, they can alleviate the consequences (Curran, 2018). Local communities can be minimally disrupted from Yelp if locals are encouraged to consistently leave reviews for local businesses to offset the number of biased and fraudulent ones. This would result in a more accurate representation of what the majority values and needs which will ultimately affect how gentrification occurs and shapes communities.

11

References

Atkinson, R. and Blandy, S. (Eds) (2006) Gated Communities. London: Routledge.

Bayly, L. (2015, November 13). Yelp Reviews Colored by Racism, Could Impact Gentrification:

Study. NBC News. https://www.nbcnews.com/business/consumer/yelp-reviews-colored-

racism-could-impact-gentrification-study-n463086

Blanding, M. (2011, October 24). The Yelp Factor: Are Consumer Reviews Good for Business?

HBS Working Knowledge. http://hbswk.hbs.edu/item/the-yelp-factor-are-consumer-

reviews-good-for-business

Bowman, J. (2017, December 5). Building Yelp. Medium. https://medium.com/swlh/building-

yelp-bc4e62c4db3b

Brown, J. (2019, September 16). How to Identify and Deal with Fake Yelp Reviews.

BrightLocal. https://www.brightlocal.com/learn/how-to-identify-and-deal-with-fake-yelp-

reviews/

Carman, A. (2018, April 10). Why do you leave restaurant reviews? The Verge.

https://www.theverge.com/2018/4/10/17215784/whyd-you-push-that-button-yelp-

tripadvisor-reviews-restaurant

Charles, B. (2018, August 1). Are Smartphones Speeding Up Gentrification?

https://www.governing.com/topics/urban/gov-smartphones-gentrification-yelp-

foursquare-lc.html

Chong, E. (2017, September 17). Examining the Negative Impacts of Gentrification.

https://www.law.georgetown.edu/poverty-journal/blog/examining-the-negative-impacts-of-

gentrification/

12

Curran, W. (2018, July 26). Gentrification is relentless, but not inevitable if locals are able to

help shape redevelopment. USAPP.

https://blogs.lse.ac.uk/usappblog/2018/07/26/gentrification-is-relentless-but-not-inevitable-

if-locals-are-able-to-help-shape-redevelopment/

Don’t Ask for Reviews | Support Center | Yelp. (n.d.). Retrieved April 2, 2020, from

https://www.yelp-support.com/article/Don-t-Ask-for-Reviews?l=en_US

Doucet, B. (2014). A Process of Change and a Changing Process: Introduction to the Special

Issue on Contemporary Gentrification. Tijdschrift Voor Economische En Sociale Geografie,

105(2), 125–139. https://doi.org/10.1111/tesg.12075

Erskine, R. (2017, November 16). Yelp’s “Don’t Ask” Policy Is Bad For Everyone... Including

Yelp. Forbes. https://www.forbes.com/sites/ryanerskine/2017/11/16/yelps-dont-ask-policy-

is-bad-for-everyone-including-yelp/

Fleisher, C. (2018, June 11). There goes the neighborhood.

https://www.aeaweb.org/research/yelp-data-gentrification-starbucks-nowcasting

Glaeser, E. L., Kim, H., & Luca, M. (n.d.). Nowcasting Gentrification: Using Yelp Data to

Quantify Neighborhood Change. 13. https://doi.org/10.1257/pandp.20181034

Kay, S. (2019, January 18). Opinion: Yelp Reviewers’ Authenticity Fetish Is White Supremacy in

Action. Eater NY. https://ny.eater.com/2019/1/18/18183973/authenticity-yelp-reviews-

white-supremacy-trap

Klein, N., Marinescu, I., Chamberlain, A., & Smart, M. (2018, March 6). Online Reviews Are

Biased. Here’s How to Fix Them. Harvard Business Review.

https://hbr.org/2018/03/online-reviews-are-biased-heres-how-to-fix-them

13

Lees, L. (2008). Gentrification and Social Mixing: Towards an Inclusive Urban Renaissance?

Urban Studies, 45(12), 2449–2470. https://doi.org/10.1177/0042098008097099

Luca, M. (2011). Reviews, Reputation, and Revenue: The Case of Yelp.Com. SSRN Electronic

Journal. https://doi.org/10.2139/ssrn.1928601

Maciag, M. (2015, February). Gentrification in America Report. Retrieved from

https://www.governing.com/gov-data/census/gentrification-in-cities-governing-

report.html.

Mukherjee, A., Venkataraman, V., Liu, B., & Glance, N. (2013). In International AAAI

Conference on Web and Social Media. Retrieved

from https://www.aaai.org/ocs/index.php/ICWSM/ICWSM13/paper/view/6006/6380

Seligson, S. (2013, November 4). Yelp Reviews: Can You Trust Them? | BU Today. Boston

University. https://www.bu.edu/articles/2013/yelp-reviews-can-you-trust-them/

What is Yelp’s recommendation software? | Support Center | Yelp. (n.d.). Retrieved April 2,

2020, from https://www.yelp-support.com/article/What-is-Yelp-s-recommendation-

software?l=en_US

Yelp—Company—Fast Facts. (2019, December 31). https://www.yelp-press.com/company/fast-

facts/default.aspx

Zukin, S., Lindeman, S., & Hurson, L. (2017). The omnivore’s neighborhood? Online restaurant

reviews, race, and gentrification. Journal of Consumer Culture, 17(3), 459–479.

https://doi.org/10.1177/1469540515611203

14