Atlanta, Houston, and New York City Top List of Cities With Large Number Of Black Businesses Opening During Pandemic

In respect to small business owners, several recent reports have shown that Black entrepreneurs were rethe hardest hit by the COVID-19 pandemic.

Yet a new analysis disputes those findings to a degree, suggesting that there were several areas nationally where Black Americans opened businesses briskly despite the crisis.

Relatively fresh research from university economists disclosed that several cities with predominantly Black populations saw their rate of new businesses take off during the pandemic, occurring more so than cities with lower Black populations, CBS.news.com reported.

The discovery came as black businesses have been walloped by the crisis. Many of those firms continue to face ongoing challenges of raising capital and operating with less revenue than generated before the pandemic.

Among their findings, researchers learned that major cities including Atlanta, New York City, Miami, and Houston led other cities in entrepreneurial growth, often in ZIP codes with Black populations earning higher than the average U.S. income. Startup growth in those neighborhoods topped their statewide averages and occurred when the nation faced extensive joblessness and tumbling corporate profits.

The research showed new businesses in Atlanta grew 56% relative to 2019, mainly in predominantly Black neighborhoods of College Park and East Point. In that timeframe, Georgia’s overall rate grew 36%, based on U.S. Census data including all ethnicities.

In the nation’s fourth-largest city, Houston, startup rates rose by 32% in the Black neighborhoods of Sunnyside, Missouri City, South Acres, and Kashmere Gardens. In comparison, the Texas rate was 10%.

A 45% growth in business registrations in New York City in July 2020 from the year-earlier period was led by the minority-majority boroughs of the Bronx and Queens, where new businesses rose by 32% and 26% respectively. The state’s growth rate was 10% in 2020 and entrepreneurship in predominantly White Manhattan declined that year.

CBSnews.com reported one of the study’s authors, Boston University business professor Catherine Fazio, said it’s unclear why there was such a boom in entrepreneurship last year, particularly in wealthier minority neighborhoods. She added her best guess is some Americans living in communities of color used the stimulus payments from Congress last year to file business-formation paperwork, choosing to do versus paying bills.

“Many people lost their jobs in the wake of the initial lockdown, so they turned to other avenues, which included starting new businesses.”

The growing number of new businesses started by people of color came as the Black Lives Matter movement and cases of police brutality drew national attention to Black-owned businesses, researchers noted. Fazio said it’s likely that even more new companies than her research captured were started in 2020, as some entrepreneurs may not have filed business formation documents in their state.

While the study did not precisely state what type of new businesses are being opened, CBSnews.com reported Black entrepreneurs nationwide are starting up establishments ranging from restaurants to data science firms.