By Perry Luckett, CoffeeMan 1

There’s an ongoing controversy about how high-end coffee shops affect gentrification in neighborhoods—the process by which poor urban areas change in character when wealthier people move in, improve housing, and attract new businesses. Usually, the area’s original working class population is gradually displaced by a middle-class, young-professional population. It often begins with these professionals being priced out of the city center itself and looking for housing to areas just outside, which tend to be more affordable. [GD]

Some studies suggest coffee shops drive change

Because the growth of upscale coffee shops seems to correlate with gentrification, many people believe the shops themselves are engines of change. They suggest that, once a high-end coffee shop arrives in a cozy low-income neighborhood, residents can say goodbye to manageable rents and a lasting local culture.

Certain studies seem to bear them out. For example, in a 2014 study of the Pilsen neighborhood in Chicago, Illinois, consumption patterns for high-end coffee were clearly those of a new middle class that had grown up around the shops. Pilsen had more art, and coffee shops were “hip”—continuing to direct their décor and products to the generally more educated new residents. [EBO]

Independent researchers have mapped the relationship between rent prices and coffee shops in several urban areas and concluded that many of the shops they located predated a spike in housing prices. In other words, high-end coffee shops may have induced more young professionals to cozy up to the surrounding areas, and the resulting gentrification drove up housing costs. [KK]

Similarly, two researchers at online real-estate company Zillow found homes closest to Starbucks locations appreciated at a four percent higher rate than those farther away. Of course, further investigation would be necessary to ensure this correlation showed Starbucks’ shops drove the increase rather than just accompanying rising economic levels in their surrounding neighborhoods. [KK]

Some owners of recently installed coffee shops have recognized this correlation and worked to reverse it in their own spaces. A major example is Philadelphia, where owners across the city have gone out of their way to welcome ethnic residents rather than seeking outsiders. Shops such as Uncle Bobbie’s, Franny Lou’s, and Kayuh arrange their cultural programming and their vibes to attract customers who usually are excluded. Some, such as Quaker City and The Monkey & The Elephant, work from the other side by employing Philly’s most vulnerable populations. [KK] But these efforts can be costly, and business is often chancy for individual owners who don’t have the deep pockets of corporate chains to sustain them.

Gentrification around coffee shops isn’t new—it covers centuries

Although coffee-shop culture dates back to at least the 15th century in Constantinople, Britain became history's next haven for coffee shops in the 17th-century. A trade boom throughout the 1650s left the British people with more disposable income, which made coffee houses in London and elsewhere more profitable. As with today's "third-wave" cafés, the shops spread quickly throughout the city. The first opened in 1652 and, by 1700, more than 2,000 coffee houses had appeared in London alone, inhabiting more retail space and paying higher rent than any other trade at the time.

These shops quickly became a hub for political discussion and debate at a time when dissidents were concerned about the state of the nation following the death of Lord General Oliver Cromwell and during the Restoration of Charles II. They were called "penny universities": Just one penny, the saying suggested, would buy a cup of joe and the stimulating intellectual discussion that accompanied it. Of course, a "penny" wasn't as cheap then as it sounds today. It was still an obstacle to unskilled laborers, for example, who earned just eight pence a day. [KK]

Merchants who missed London's booming coffee-house culture established North America's first models in the colony town of Boston late in the 17th century. Coffee became more popular after the Boston Tea Party and a subsequent resolution against tea drinking by the Continental Congress. America's consumption of coffee rose throughout the first half of the 1800s—some Civil War soldiers even carried coffee with them in the buttstocks of their guns.

A century later, small coffee shops sprouted again in the United States during the 1950s and 60s, similar to how they're spreading in Boyle Heights (Los Angeles) and Crown Heights (Brooklyn) today. Many of these cafés started in immigrant neighborhoods. Teenagers with disposable cash and leisure time flocked to Italian neighborhoods, such as New York's Greenwich Village, San Francisco's North Beach, and Boston's North End. There, they tried espresso drinks—then a novelty—and hung out with countercultural artists, writers, and musicians. [KK]

In the 1990s, Starbucks expanded the American consumer base for brews with foreign names. At first, they opened stores exclusively in downtown areas, but high profits in two suburban stores in New York state convinced company executives to expand past city limits. Starbucks created the concept of a “third place” between home and work where people can relax, enjoy a cup of coffee and experience the inviting ambience. Now they are the main representative of the United States' second wave of coffee culture. As of early 2020, the company operated more than 30,000 locations in 70 or more countries.

Starbucks led the way for high-end, non-franchised stores to follow in the so-called third wave, which builds on the gentrification trends of past coffee fads. This third wave emphasizes cosmopolitan surroundings while offering a relatively inexpensive space to spend time thinking, as in 17th-century Britain. At the same time, it gives outsiders a reason to visit ethnically diverse neighborhoods, as coffee also did in the 1950s and 60s. But the newer coffee shops often cater to foodies, remote workers, and others with the incomes to pay up to $16 for a cup of specialty coffee. They still accompany urban change but also create spaces distinct from the lower-income neighborhoods around them. By offering ever more specialized coffee drinks and cultural experiences, they appeal mainly to people who have the expendable time and money to indulge.

Coffee shops are cozy respites for gentrified flexible workers

Coffee shops go hand in hand with a global increase in remote and flexible working, especially with the rise of wireless technology. In fact, studies show about 54% of the world’s workers say they work outside of the main office for at least two or three days per week. This trend is more evident in certain countries, some of which may surprise you. For example, part of China’s rapid increase in coffee shops has been to accommodate the 65% of their workers who toil away from corporate offices—the highest percentage in the world. India, Mexico, South Africa, France, and Japan are also noticeably above the global average. [GD]

Studies also report remote workers still tend to work in city centers, rather than staying at home. Coffee shops attract their fair share of these workers by offering social interaction and community often lost when working at home. In some cases, these spaces can become an “office outside the office” that keeps employees motivated, whereas working at home can sometimes be distracting and unproductive.

Coffee shops also offer a cozy, informal space for meetings and interviews. Although some companies may find it hard to operate this way, others discover benefits from holding certain meetings in a more relaxed location away from the office.

My personal experience in teaching business writing seminars and consulting with individual writers supports this theory. I’ve held hundreds of half-hour sessions in coffee shops near corporate and government offices to review writers’ business-letter, email, or report samples. People were always more at ease discussing their writing’s strengths and flaws in the coffee shop’s neutral space than they would have been in a corporate office.

The global upsurge in coffee shops offers three key takeaways

• Coffee shops are a sign of changing working populations, often correlating with the rise of young professionals in a certain neighborhood, suburb, or city.

• These shops also correlate with a rise in flexible working habits. Coffee shops provide comfortable environments in which remote workers can feel both socially connected and focused.

• Finally, they offer alternative meeting places for important business activities. Taking a meeting or interview out of the office can relax participants and foster more honesty, creativity, and engagement with the topics at hand. [GD]

Although shops in Philadelphia may offer a counter narrative, the trend toward gentrification—and the tensions surrounding it—appear to be here to stay.

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Resources

Eva Bouw and others, “Coffee Shops and Gentrification - A study on Pilsen, Chicago and Parkdale, Toronto.” https://bit.ly/3uZlAYP, June 2014.  [EBO]

Jerome Campbell, “Coffee shops in gentrifying neighborhoods: Why design matters.” https://kcrw.co/3wej8xO, Jan. 14, 2020.  [JC]

Gavin Dow, “The rise in the coffee shop: what gentrification means for global business.” https://bit.ly/33WfBbm, May 20, 2018.  [GD]

Dina Gerdeman, “How To Know If Your Neighborhood Is Being Gentrified.” https://bit.ly/3bzYq3m, May 29, 2018.  [DG]

Katie Kilkenny, “A Brief History of the Coffee Shop As a Symbol for Gentrification.” https://bit.ly/33X2VAQ, July 25, 2017.  [KK]