Using Data-Driven Insights to Help Revive a Historic New Orleans Neighborhood
Historic Claiborne Corridor in New Orleans boasts cultural roots dating back to the Mardi Gras Indians and slavery era artisans. “It was the cradle of jazz,” said Jonn E. Hankins, former executive director of New Orleans African American Museum, and like Oretha Castle Haley Boulevard, was a mecca of black-owned businesses that some say rivaled the Harlem Renaissance.
The building of Interstate 10 in the 1960s would tear the community apart, however. Three-fourths of the businesses closed after the freeway cut through the neighborhood, and hundreds of homes were razed along with the canopy of oak trees lining the corridor.
By the time Hurricane Katrina hit in 2005, concentrated poverty (more than 40 percent of residents living in poverty) was common in neighborhoods along the freeway, and life expectancy is 20-25 years shorter than in some nearby neighborhoods.
Yet as the hurricane’s flood waters receded, plans to rebuild in the Livable Claiborne Corridor (LCC) were already beginning to circulate. After a decade of study and community input, the 19-block Claiborne Corridor Cultural Innovation District (CID) was launched in 2017 to jumpstart businesses and retain cultural traditions “under the bridge,” referring to the I-10 overpass. Today, signs of renewal are starting to become evident. The CID has drawn pop-up retail, food vendors, and other small merchants as well as a coworking space, business coaching and supports.
In addition to the CID plan—whose official kickoff was in April 2018—the area has benefited from additional investments in recent years. In fall 2017, the US Department of Commerce gave the CID an $820,000 grant for a green marketplace, with plans for 50 small and micro-businesses and eight anchor businesses. Philanthropic and community development financial institutions (CDFIs) have begun to invest to support new businesses and build affordable housing to revitalize the neighborhood while preserving its cultural heritage.
“The CID district is helping to redevelop the social fabric of the neighborhood,” said Norman Barnum, chief financial officer for the New Orleans Business Alliance and project lead for development of the 25 Qualified Opportunity Zones in New Orleans, La (NOLA). The Business Alliance is a public-private partnership and serves as the City of New Orleans official economic development organization. Barnum states further that “While you can’t take away the 50 years lost by the community because of the Interstate, the CID was put into place to recognize a wrong and create opportunity for a new right.”
However, if the LCC and CID are to continue to grow and support new businesses, particularly minority-owned businesses, investors need good data on the areas' strengths. The Mastercard Center for Inclusive Growth data fellows program is leveraging public and private data-driven insights to help create a more complete picture of spending power in low- and middle-income neighborhoods.
Deep dive reveals retail business strength
In February 2019, the Center gathered more than 60 Mastercard data scientists in a 36-hour “Datathon” to do a deep dive to support inclusive growth in New Orleans. The focus areas and research questions of the Datathon were shaped directly by city government, local experts at the Data Center, community organizers, and regional economic development experts. Our initial findings focused on business growth in the Livable Claiborne Corridor, a larger 3.9 mile stretch spanning nine neighborhoods along Claiborne Avenue including the CID. The initial findings on consumer spending and store openings preview what these insights can ultimately do—help local communities make the case for investment that supports inclusive growth.
Analyzing Mastercard’s aggregated and anonymized transaction data from a limited time period in the three distinct areas in New Orleans—the CID, the LCC, and the city as a whole—we identified trends in consumer spending. Publicly-available socioeconomic data and local knowledge were also incorporated to support the Mastercard data-driven insights.
Between 2015 and 2018, the CID appears to have experienced a dramatic rise in consumer spending as compared with the rest of the city. From 2015 to 2018, the indexed consumer spending at CID retail businesses was 12 times greater than spending growth in Greater New Orleans. In the larger LCC, consumer spending grew by 16 percent.
"The data-driven insights are validating," said Asali DeVan Ecclesiastes, director of strategic neighborhood development for the New Orleans Business Alliance and co-creator of the Cultural Innovation District. The growth that the data reveal “is astounding,” she said. “While I firmly believed there was growth, I didn’t imagine those numbers. That bird’s eye view, which the insights reflect, lets us increase our vision and our scope.”
Ecclesiastes said that the insights can help make the business case for investing in the neighborhood. “Investors don’t have to feel like they’re just doing good. They can know that you can do good and make money.”
Andreanecia Morris, HousingNOLA executive director, also thinks the spike in spending is encouraging. “This is talking about the strength of businesses in the corridor. It’s an argument for the neighborhood getting stronger.” HousingNOLA is a ten-year public-private partnership focused on affordable housing and community development.
Store openings pick up
Both the CID and the larger LCC area have seen strong growth in new retail businesses. In the LCC, place-based development efforts have created new housing and green spaces, improved transit service, made the area more environmentally sustainable and improved community services.
Although not as robust as consumer spending increases, store openings in the LCC have outpaced the rest of the city, 93 percent to 56 percent citywide between 2015 and 2018.
Many of the new stores appear to follow the streetcar line expansion in 2018 along St. Claude Avenue, said Morris, along with spreading gentrification. "Even Sweet Lorraine’s, a long-time African American club, is surrounded by hipster coffee shops now,” she said, "along with clubs that cater to new residents and restaurants that neither attract nor employ long-time residents."
With looming concerns over gentrification and the displacement of long-time residents, the data-driven insights will help make the case that “there’s still room and opportunity for local, minority-owned businesses in the corridor,” said Morris. "The insights could also convince the city to create a lending pool for minority-owned businesses," she said, "and it can help level the playing field for entrepreneurs."
The new University Medical Center, which replaced the shuttered Charity Hospital, is also likely contributing to the sales and business growth, said Ecclesiastes. She and the team developing the CID made sure that the new hospital staff were aware of all the restaurants for lunch, car repair shops, dry cleaners and more in the neighborhood.
Barnum says the insights can help local advocates fight the battle of perceptions in the developer and investor communities. “It gives you the confidence to repel some of the perceptions of what was,” he said. “These insights are not for what [the community] was, but for what can be. It allows us to forecast a better life in these communities.”
That confidence may be contagious. “There’s a level of excitement and vibrance and independence that the residents are feeling about their own empowerment through entrepreneurship and capitalism,” Barnum said.
"The economic health of the area will have another effect," said Ecclesiastes. "It can help reduce those life expectancy gaps and lower the poverty rates in the neighborhood that followed in the footsteps of the I-10." She suggests that economic opportunity is what neighbors wanted to tackle first, and rightly so. Ecclesiastes further states that “If we can move these economic numbers exponentially, I can’t wait to see their effect on the health outcomes, education and all those things that matter to a prosperous life.”
Vaughn Fauria, president and CEO of NewCorp, a local community development financial institution (CDFI), thinks “the value of the data-driven insights will be more readily realized as we probe more deeply into the community's participation.” The Center's Data for Good philanthropy program has been a catalyst for a deeper engagement in NOLA beginning with the Datathon. We will continue to explore new ways to share insights with the next research report focusing on Qualified Opportunity Zones in New Orleans. The Qualified Opportunity Zones program is a 2017 US tax program for long-term investments in underdeveloped areas. Both the CID and a large part of the LCC are in designated Qualified Opportunity Zones. The insights can help potential investors better understand how Opportunity Zones can bring benefits to those who live in the community.