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Are Smartphones Speeding Up Gentrification?

Location-based apps like Yelp and Foursquare might be exacerbating housing problems in transitional neighborhoods.

That smartphone in your pocket just might be speeding up the gentrification of urban neighborhoods. Or at least that's the basis of new research from the University of California, Berkeley.

Will Payne, a doctoral candidate in geography and new media, is collecting data to examine how smartphones -- and specifically the location-based apps Yelp and Foursquare -- are impacting transitional and blighted neighborhoods in cities across the country.

By making it easier than ever for people to discover out-of-the-way restaurants and new retail shops, these apps may be encouraging more residents to explore -- and move to -- neighborhoods they once would have avoided.

"In the past, a restaurant would open and maybe in a month or two get a review from The New York Times. That is on hyperdrive now,” says Payne. 

Payne is researching the time between the opening of a new restaurant in a transitional neighborhood and the uptick in housing prices surrounding it. He suspects that with the advent of Yelp and Foursquare, “the lag time between the opening of a restaurant and gentrification is shorter." While those and other review apps aren't causing gentrification, he says, they may be exacerbating it. 

Payne is still collecting his research. But Dillon Mahmoudi, assistant professor of geography and environmental systems at University of Maryland, Baltimore County, says apps like Yelp and Foursquare, along with major tech companies like Google, Apple, Microsoft and Amazon, are absolutely impacting the way neighborhoods are developed.

Mahmoudi points to Seattle, where Vulcan Real Estate, a development firm run by Microsoft co-founder Paul Allen, is using data from mobile devices in its project plans, looking at how and where affluent residents shop in order to help determine which neighborhoods it should focus on. 

“What’s happening in Seattle is there is so much vertical mixed use that there is almost only small boutique shops,” Mahmoudi says. “Developers who collect all this data have an interest in developing vertical mixed use because that’s what their users prefer, and the data shows that.”

Appealing to more affluent residents, according to Mahmoudi, comes at a social cost. His research shows that when cities tilt toward vertical mixed use with an emphasis on small boutique shops, instead of a mix of small and large retail spaces, there are fewer interactions between people from diverse social and economic backgrounds.

Yelp, similarly, is helping to fuel the growth of those types of boutiques, which in turn makes neighborhoods less diverse.

“Yelp has a strong relationship with those small boutiques that rely on Yelp reviews to get their name out. Their core audience is affluent residents who rely on those reviews to know where to spend their money,” Mahmoudi says.

While location-based apps may be speeding gentrification, they can also be used as a tool to level the playing field for existing businesses, especially those owned by minorities, Payne adds. Currently, there's no location app that allows customers to search for minority-owned businesses or worker-owned restaurants. But that kind of filter could be built in to an app, which could bring more diners and shoppers to those businesses.

“You can’t ask [these apps] to change their entire business model, but you can ask them to take other things into consideration when designing their apps," Payne says. "They can’t fix gentrification, but they can help us find businesses to live out our values."

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