newal, and actions required for their successful implementation; e. The availability of decent, safe, and standard housing in nonsegregated areas for all persons, including those displaced by urban renewal and other public works;

f. The effect of urban renewal activities on the economic growth and vigor of the community, including small-business establishments displaced by renewal;

g. The factors involved in developing a sense of community in redeveloped areas.

Field studies have been completed in several metropolitan areas and the findings are being tabulated and analyzed by the Institute of Ethics and Society in San Francisco Theological Seminary. The study thus far has given agencies of the United Presbyterian Church U.S.A. a chance for a long hard look at community renewal policies and practices and more important, at their social, economic, and political consequences. Of especial significance to our churches are the involvement of the people affected by urban renewal in determining and influencing the plans for their community, the relocation, rehousing, and rehabilitation of families displaced by renewal, particularly the chronically poor nonwhite families, and the integration of local plans and renewal projects into larger, comprehensive, coordinated regional redevelopment, and the enactment and enforcement of State and Federal fair housing statutes.

For the record we state that the general assembly meeting annually is the highest judicatory of the United Presbyterian Church in the United States. It is a representative body composed of an equal number of ministers and laymen (approximately 950 commissioners) elected by the 194 presbyteries. Its standing committee on church and society brings recommendations about many current issues and problems to the assembly for debate and action. Thus the church attempts to bring its corporate influence upon public policies and the climate of opinion in the churches and in society as a whole.

MARCH 6, 1964.

MARGARET E. KUHN, Office of Church and Society.

ABSTRACT OF STUDY MADE FOR SBA

THE EFFECTS OF DISPLACEMENT AND RELOCATION ON SMALL BUSINESS (By Basil G. Zimmer, Professor of Sociology, Brown University)

The rebuilding of American cities, which is clearly one of the major tasks of the last half of the present century, exacts a heavy economic toll from the small independent businessman. This is one of the findings of the present study which was concerned with what happens to businesses when they are forced to move because of either urban renewal or highway construction programs. It was found that many of the owners of businesses that were displaced from their established sites were in a very real sense substantially subsidizing these public improvement programs. In a large proportion of the cases the very life of the business was placed in serious jeopardy. Many were unable to survive the disruptive effects of the move, yet they received no com

pensation for the loss of their business. In such cases one finds bitter resentment. Apart from the nonsurvivors, some of the businesses that relocated suffered less severe losses through declines in volume of business at the new location while at the same time they experienced rent increases. Here, too, the full burden of the loss was the responsibility of the individual businessman. Ironically the businesses that experienced the largest relative losses were the ones that could least. afford to do so.

These findings likely represent minimal consequences of displacement and relocation since the study was undertaken in the very early stages of the rebuilding program. In actual fact the major developments belong to the future. Thus, the pressure for sites and the problems of relocation will likely become increasingly serious as vacant structures are occupied by previously displaced businesses and additional structures are demolished. Competition for available sites could cause even more serious losses in the future.

The findings of the present study are based on the experiences of nearly 300 business establishments that had been displaced during the 5-year period, 1954 through 1959. Most of the establishments were small. Nearly one-fifth were owner operated with no employees; 8 units out of 10 employed less than 10 workers. The median number for all of the displaced units was only 3.2 employees. The establishments affected were units of long standing, in that more than 90 percent had been in business for more than 5 years and 75 percent for more than 10 years. Actually two-thirds of the units had been in operation in the same neighborhood for more than a decade.

One of the consequences of displacement is that many establishments are unable to continue in business. The loss rate was highest among food-related retail units and lowest among the establishments in the manufacturing, wholesale, and construction category. The smaller establishments had the lowest survival rate. One-third of the nonsurvivors had no employees and more than three out of four had fewer than three workers. But among the survivors only 4 out of 10 were in this size class. Viewed differently, the proportion that did not survive the move ranged from a low of 10 percent among those with 10 or more workers to a high of 40 percent among those with no employees. Thus, it is evident that displacement worked a particular hardship on the smaller establishments.

The relationship between average monthly sales and rate of survival was found to be a marked one. Median monthly sales of the survivors prior to the move were 3.5 times higher than the volume of sales of the nonsurvivors. As we pursued our analysis further we found that even though many of the nonsurvivors were operating close to a subsistence level prior to displacement nearly all expressed the opinion that they would have contined in business indefinitely had they not been forced to move. It may well be they could have done so since many had no employees and either owned the building they occupied or paid low rentals. It is worthy of note that 94 percent of the nonsurvivors had been in business for more than 5 years and 91 percent had occupied the same location for 5 years or more. One unit in three that did not survive the move had been at the same location for more than 15 years.

It should be noted that not all nonsurvivals were business failures in the traditional sense. Some used displacement as an opportunity to discontinue in business which they had vague plans to do anyway. However, a majority of the former owners would have preferred to remain in business but did not do so for a variety of reasons.

Following displacement approximately one-fifth of the nonsurvivors entered the ranks of the unemployed. Thus, unemployment was at least a temporary condition in the transition from business to some other position in the labor force. A similar proportion went into retirement after closing down their business. However, this was not always voluntary nor was it without problems. Many went into retirement because they felt that they were too old to start over or to find other employment. Thus, in effect, when they closed down their business they were forced out of the labor market. The harmful effects for the unemployed and to a lesser extent the retired, are readily apparent.

A majority of the nonsurvivors entered the labor market in different functional positions. More than half of those employed entered whitecollar occupations, while one-fourth took jobs at the craftsman level. About one in five entered at the semiskilled operative level. The general socioeconomic level at which the former business owners entered the labor market was closely related to the size of their business prior to displacement. Thus, those who employed three or more workers were nearly five times as likely to enter white-collar occupations as those who had no employees. Conversely, the latter disproportionately entered manual-type jobs or retired. The owners of the smaller establishments were also more likely to enter the ranks of the unemployed. Part of these differences are to differences in age and education.

There was general agreement among the nonsurvivors that they would have been better off if they had not been displaced. They also felt that if the Government is going to force businesses to move that owners who do not relocate should be compensated not only for their property but they should be fully compensated for the "worth of the business" as well. The general feeling among the nonsurvivors was that displacement had deprived them of their source of livelihood, and they should have been compensated accordingly.

Among the units that relocated the central city tended to retain a high disproportionate number of the smaller establishments whereas the larger units were more likely to move to the suburbs. In the suburbanization movement units in the nonfood related retail and those in the manufacturing, wholesale, and construction category were overrepresented. The city, however, disproportionately retained the food-related retail and service establishments.

In general, the proportion of units moving to the suburbs varied directly by size of business. The median-sized business that relocated in the city employed 3.8 workers at the time of the study while those moving to the suburbs averaged 7.2 workers. This, of course, means that the suburbanization of "jobs" far exceeded the suburbanization of establishments. Of particular interest is the fact that the losses to the city through businesses moving to the suburbs following displacement far exceeded the losses due to units going out of business, even though the number of establishments that did not survive the move was nearly

double the number of units that relocated in the suburbs. A comparison of the losses showed that the median size of the units that moved to the suburbs was more than four times larger than the median size of the units that went out of business. The aggregate job opportunities lost through the suburbanization of businesses was more than double the number of jobs lost, including the positions of the owners themselves, through units closing down their business operations. It is noted further that while the nonsurvivors were largely small foodrelated retail, neighborhood-type businesses, the units that move to the suburbs were predominantly those in the manufacturing, wholesale, and construction category.

Unquestionably, units going out of business causes serious losses for the individual owners, but from the point of view of the city, as far as the commercial structure and tax base is concerned, the losses due to suburbanization is of more importance. Although less than one unit in five relocated in the suburbs the movement out was such that the loss to the city of jobs and volume of business far exceeded the proportionate movement of establishments. The significance of this type of loss to the city needs no elaboration.

Movement to the suburbs seems to have been influenced by the place of residence of the owner. Persons who lived in the suburbs were more than five times as likely to move their business to the suburbs than were those who lived in the city. While the study was limited only to displacements within the city more than half of the owners did not live in the city. Thus the consequences of these programs extend beyond the corporate limits of the city.

Businesses moving to the suburbs seem to occupy more attractive sites than businesses that relocated in the city. At least a larger proportion of the units in the suburbs move to newer, better buildings with more space than they had previously occupied. As compared with those that remained in the city businesses in the suburbs occupied much larger buildings. Also they were more likely to occupy newly constructed structures. Improvements in parking facilities were observed in both areas but such improvements were more marked among the units that moved to the suburbs.

Following relocation, the units that moved to the suburbs seemed to have made a more favorable adjustment than the businesses that remained in the city. This is reflected not only in respect to the economic variables considered but in their general reaction to the new location. When compared with the original location the rent-to-sales ratio in the suburbs declined by 20 percent following the move but increased by 49 percent among the businesses that remained in the city. In short, the suburbs not only attracted the bigger and better establishments but also proved to be an attractive location for such businesses.

Rentals increased substantially at the new location. A point particularly worthy of note is that the relative rent burden exceeded the absolute increase since sales declined after the move. Rent, as a percent of sales, increased by 24 percent. The increased burden varied markedly by a number of subgroups. Service units in particular carried a heavy rent burden in relation to sales even prior to the move, but at the new location the burden increased and the differential was even more marked. Similarly, the small units and those serving predom

inantly neighborhood markets carried a disproportionately heavy rent burden at both locations, but the move worked to their further disadvantage. Although their median rent levels were much lower than for the businesses in other subgroups, the proportionate increase in rentals following the move exceeded the other subcategories.

Considering all of the relocated businesses the adjustment following the move was predominately favorable, even though selected subgroups experienced substantial losses. Thus, when attention was focused on economic variables we found that the relocated businesses fell roughly into three groups as far as changes in volume of business is concerned. Approximately one-third reported more business than prior to the move. An equal proportion reported no change, while the remaining one-third experienced a decline. A less favorable response was reported in respect to changes in income. However, even here a substantial minority (nearly one unit in four) reported an increase, while one-third reported no change. This, of course, means that a majority either held their own or improved their income following the move. But for a substantial number (43 percent) income declined at the new location. This decline, however, was largely due to small neighborhood-type businesses. Declines were reported disproportionately by food-related retail and service establishments. Movement out of an established area proved to be particularly disruptive for such businesses. Many were unable to survive displacement and, of those that did relocate, many experienced rather severe economic losses.

Small businesses encountered much more difficulty in moving to a new location than did the larger establishments. Nearly half experienced a decline in volume of business and a substantial majority (60 percent) reported a decline in income. This is nearly 50 percent higher than the proportion of all businesses. Small units could ill afford such a decline in that their median income at the new location was less than $4,000. However, a distinct majority of the businesses in the median- and large-size categories made a favorable economic adjustment. They were able to either maintain the same volume of business or show an improvement. Similarly, for a majority income remained the same or increased. Approximately one-third of the median and large units were better off after the move than prior to displacement. In many instances the move gave them an opportunity to expand their business which was not possible at the old location. In these instances displacement was to their advantage.

At the time of displacement the reaction seemed to have been predominately negative. Highly emotional and angry responses were frequent. Much of the unfavorable reaction, however, was found to be due to uncertainty as to what would happen to their businesses. Owners were suspicious that the move would be harmful, thus the change was viewed with considerable apprehension. This proved to be justified at least in part, for approximately one-third of the establishments went out of business. There was general consensus among these owners that they had been badly handled. The reaction of the nonsurvivors to the whole displacement program was distinctly negative. Clearly, displacement worked a real hardship for this group.