Why are there so few cheap restaurants in Anacostia?

by on August 19, 2010 at 7:41 am in Economics, Food and Drink | Permalink

I had lunch there lately, in the new and excellent Ray's the Steaks, East River edition (superb chili, fried chicken, mac and cheese; recommended).  Yet I drove around the general area for about forty minutes and hardly saw any other restaurants to speak of.  The five or six other times I've been to Anacostia I had similar impressions, even more than in other "ghetto" areas I have visited.  

What might be possible explanations?

1. Poverty: Yet there are other retail establishments and per capita income there is surely not so low.  Plenty of poor countries have plenty of restaurants.

2. Risk and crime: Yet you will see other cash-intensive retail businesses in Anacostia.  Is it so hard to hire a guard?

3. Traffic: It is easy to get in and out of Anacostia, so perhaps residents drive to eat out elsewhere.

4. Diversity:  Perhaps it is the demand for different kinds of food which increases the number of restaurants; yet Anacostia is not so ethnically diverse, as it is heavily African-American.

5. Labor supply: Cheap restaurants rely on low-wage laborers who do not have cars, and it is actually fairly hard to get to, and get around, Anacostia.

6. Proximity to business lunch demand.  Not so much.

7. Fast food: You will find McDonald's and Subway in Anacostia.  Since they serve high volumes, maybe that lowers the total number of restaurants needed.  This is related to #4.

8. Foot traffic: Not so much, although the suburbs deal with this problem just fine.

What do you think are the major factors?  What have I failed to list?

In the 12:30 to 2 lunch slot, the Ray's across the Anacostia river was never more than half full, though a Ray's elsewhere will be quite crowded during those hours.  In all fairness, this Ray's has not been around for long.

I thank Ross Douthat for a useful conversation on this topic.

1 MD August 19, 2010 at 7:49 am

#3 – It is easy to get in and out of Anacostia…

#5 – …it is actually fairly hard to get to, and get around, Anacostia.

What?

2 Steve August 19, 2010 at 8:32 am

I’ve been to the Capital City Diner on 1050 Bladensburg Road NE a few times, and recommend it for the casual environment and traditional fare that it has (no surprises, but they use very good ingredients). (And, it is a real diner — none of this Silver stuff.) It is not in Anacostia, but close enough for me to say that the problem with such restaurants in Anacostia may be 1) unfocused employees (for the money) and 2) unfocused customers, both of which may tend to discourage the repeat serious customer.

3 Ken Rhodes August 19, 2010 at 8:35 am

A minor point: Does the name “Anacostia” really apply to all the territory close to the river on the east side? When I lived in Anacostia on Good Hope Road, that name was used for the smaller area from Suitland Parkway to Mass Avenue.

4 Alvin August 19, 2010 at 8:41 am

Where’s Anacostia? Is it a city or country?

5 james August 19, 2010 at 8:44 am

What are some comparable neighborhoods in other major US cities and how many restaurants do they have?

Here’s a Google Maps search for “Restaurant”, centered around Anacostia: http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Restaurant&sll=38.867647,-76.95528&sspn=0.079792,0.219727&ie=UTF8&hq=Restaurant&hnear=&ll=38.867647,-76.95528&spn=0.079792,0.219727&t=h&z=13

There appears to be a higher concentration of restaurants as you move into PG County along Branch Avenue and Pennsylvania Avenue. Those are generally around large strip malls and shopping centers.

I notice several large parks in SE and I think a lot of that area in DC is residential. Is there just not much in that area that is zoned properly for restaurants?

6 DanC August 19, 2010 at 9:12 am

I don’t know much about Anacosita, but I am told that in other inner cities the cost of business insurance of all types is expensive. In some cases, when street gangs start running protection rackets, businesses close.

Potential African American entrepreneurs have other communities they can invest in, or have taken government jobs.

A growth in the gay community has often been a first step toward gentrification and business diversity in many urban communities. The DC area offers the gay community better options.

Forward looking investors don’t see improvement in the community in the future, perhaps increased decline.

7 Roland August 19, 2010 at 9:26 am

The low business lunch business is a crucial problem, it smooths the weekly gross..

8 bork August 19, 2010 at 9:28 am

Here’s a guess related to diversity. It is based on observation (and probably a bit of stereotyping, apologies) rather than hard data. Perhaps others would like to comment on this speculation.

I wonder if the issue has to do with the culture around eating out. What I know of black American food culture is strongly oriented around home cooking. By contrast, what I know about recent Vietnamese immigrants is that they are strongly accustomed to eating out (small, cheap, family-style food stalls and home-based ‘restaurants’, if you can call them that, are a mainstay of life in smaller Vietnamese towns).

Regulation probably matters, though there’s likely to be an interaction with culture. So, if you ease regulations on food stalls or trucks in an area with a strong Vietnamese population (even a poor one), you’ll see an explosion of new food vendors… but the same eased restrictions in a black neighbourhood is not likely to yield the same profusion of food vendors.

9 IMGoph August 19, 2010 at 9:59 am

holy good night shirt, at it’s closest, anacostia and ray’s are 2.6 miles apart.

all of DC east of the river is not “anacostia.” if you’re going to do that, let’s start calling all of DC west of the river “georgetown.” same difference.

10 Deanwoodenizen August 19, 2010 at 10:13 am

I cosign DG-rad & Imgoph. C’mon, Marginal Revolution, get it together, so there can be a real conversation and discussion!

11 DG-rad August 19, 2010 at 10:27 am

please watch this video about new businesses in ACTUAL Anacostia: new coffee shop, new galleries and photo labs, new restaurant & bar, etc.

http://www.anacostianow.com/2010/08/check-it-summer-youth-produced-awesome.html

12 Nax August 19, 2010 at 10:37 am

One big problem is access to capital for entrepreneurs. A lot of poor neighborhoods are under-banked, which makes it hard to get loans into the area. Larger banks or banks outside the area tend to undercalculate demand and overcalculate risk (from crime, lack of demand, etc.) making restaurants seem less viable on paper than they truly are.

Add to that the fact that restaurants have high rates of failure and you’ll see it’s quite tough for anyone interested in starting a small restaurant in a poor urban neighborhood to convince a bank it’s worth lending to them.

On the other hand someone applying for a loan for a franchise is assumed to have been pre-screened by the parent company and are perceived as less risky, which is why you’ll see fast food (plus fast food outlets are pretty savvy about measuring demand).

That’s my guess.

13 james August 19, 2010 at 10:44 am

“The point is – why are there so few restaurants in certain neighborhoods of DC? (Could be expanded to include all cities of the US….)”

I don’t know if it can be expanded to all cities of the US. Tyler’s initial observation is that there are fewer in Anacostia than “other ghetto areas” he has visited. The problem here could just be with that assumption. I asked earlier what some comparable neighborhoods are. If we can list comparable neighborhoods, then we can find out how many restaurants there are in each and determine if Anacostia has fewer or not.

14 Steve August 19, 2010 at 11:08 am

Man, I went out to George Mason the other day and I saw all these restaurants. It was crazy! It got me thinking: Why are there all these restaurants out here at George Mason? From the ones right outside the Orange line stops in George Mason that you can can walk to so close to DC, to the ones at the big outlet mall along 95 south in George Mason, all the way up to those farms at the edge of George Mason by Harper’s Ferry — they were everywhere!

Though I exhaustively searched George Mason for 40 minutes, from the Potomac to Interstate 95, I didn’t discover the answer to this perplexing question as to why there are so many restaurants in George Mason.

15 DanC August 19, 2010 at 11:35 am

With regard to franchises in “bad” areas. I have seen others argue that large national franchises that want to increase minority franchises will lower start up requirements but also tend to grant franchises in communities that are less desirable. They increase minority participation without losing “better” locations for their businesses. On the upside it allows easier entry for minorities. On the downside it places them into tough markets.

That is, in part, why you see national franchise chains go into “bad” or less desirable communities.

I suppose it may be difficult for a small restaurant to find a successful niche in competition against national chains. Perhaps this implies some homogenizing in taste for the community. i.e. No desire for food from other (former home?) regions. Can view it has national chains doing a good job of meeting most needs of community.

Is it a supply problem or a demand problem. Is the current market clearing price for meals below the price needed to attract diverse restaurants. Do the people who have the skill and resources to open a restaurant have better options nearby. Is a crime a tax on businesses (hard to recruit talent etc) that deters investment.

16 Sherrie August 19, 2010 at 12:13 pm

Rays the Steaks-East River is closer to Capitol Hill than it is to Anacostia! Get your facts straight before you start blogging uninformed, inaccurate information.

17 Nonny August 19, 2010 at 12:51 pm

It seems to me that the lack of restaurants is caused by a host of factors.

1. There are no restaurants currently in place which leads to people not going there. Restaurants in DC tend to open in places with a lot of foot traffic. It also seems that restaurants do better when there are other restaurants in place. Capital City Diner on Bladensburg is not too far from H Street NE which is gentrifying and already has a bunch of restaurants with more on the horizon. When Joe Englert opened his first bar there, he planned to open more than one so he could generate foot traffic.

2. DCRA’ regulatory hurdles. It took them months to get the Capital City Diner open and it takes several months to get the paperwork in place to open up a restaurant in the District. This means that you need to be relatively well funded to make it happen which tends to limit opening a new restaurant in DC to someone who already owns restaurants and all other things being equal will go to a location which can generate more income.

3. East of the River tends to be car centric. There are Metro stations and buses but most people with disposable money tend to have cars because there aren’t many grocery stores and other amenities conveniently located. If you have to drive to buy groceries, you may eat out while you are there. Most of the restaurants I’ve seen in the suburbs are located near shopping centers or other commercial ventures. They aren’t stand alone businesses in an otherwise residential sector. As others have noticed, it isn’t just the lack of restaurants but also the lack of grocery stores, furniture stores, electronic stores, etc. Those neighborhoods tend to lack a lot of commerce with the exception of nail salons, corner stores, and fast food, or takeout shops.

18 IMGoph August 19, 2010 at 1:37 pm

so, tyler, is it ok if i say that george mason is in arlington? many of us who live here in DC call everything west of the potomac arlington. equivalency, right?

19 Ed August 19, 2010 at 1:48 pm

“Tyler, that’s great, but what you call *Anacostia* is not really Anacostia. It’s disrespectful to the people who live and work there to use the wrong identifiers. Call it River East if you mean the whole area east of the Anacostia River.”

What about Greater Anacostia?

20 jason August 19, 2010 at 1:51 pm

I’m surprised only a single commenter brought up the racial issue. While I doubt a small business loan officer at the national HQ of a bank (in Charlotte or New York perhaps) is saying “I hate black people so I won’t give a loan to a business that wants to open east of the river”, I can certainly imagine them saying “Black people are poor and have no discretionary income, so I won’t give a loan to a business that wants to open east of the river”.

I live in downtown DC by the Verizon Center, and it has been very difficult to convince developers/retailers to open real “neighborhood” amenities like a grocery store, wine shop, or diner because the 10-year-old census data shows that nobody lives there (and those who do are Chinese are poor). As a result nearly all new businesses cater to the tourists and office workers, as if there’s not 10,000-15,000 relatively well-off new residents who are dying for a grocery store or a place to grab breakfast under $20.

Loan officers don’t get paid to take risks, and based on the “data” they’re looking at from afar (along with their own preconceptions about African American communities), the area east of the river looks quite risky.

21 Bill Harshaw August 19, 2010 at 2:29 pm

I wonder what’s the history of these things? As a 34-year resident of Reston I’ve watched many restaurants come and go over the years. Given its planned design, the village center malls have always had places for restaurants and parking, but very few restaurants lasted in the 70’s, and 80’s. So barriers to entry were relatively low, zoning and bank loans weren’t a problem, but the likelihood of success was also low. I’ve the impression that only in the last few years has Reston had a number of long term successful restaurants. Whether that’s simply the result of evolution or we reached a tipping point in terms of numbers/wealth/appetite for dining out, who knows?

So, east of the river did the coming of chains kill old style family restaurants? Didn’t George Pelecanos write about Greeks owning restaurants or bars in the old days?

Assuming, perhaps wrongly, that the proportion of single-parent households is high, is there a difference in patronage of restaurants by families with two parents or one?

22 The Advoc8te August 19, 2010 at 4:01 pm

If Tyler could have done any of the following I am sure we could “leave it alone”
1) acknoweledge the mistake and apologize
2) educate himself on the basics of simple geography like the fact that the Anacostia neighborhood is 3 miles away from Rays the Steaks
3) Correct the headline and the post!

I am sure all of us residents who actaully live in River East (Wards 7 and 8)would love to “lay off” if it wasn’t for the fact that it is such a hassle and a struggle to get a cab, a pizza delivered, our friends to visit us, someome to purchase a great home in a wonderful neighborhood because of all these negative and vague comments about someplace we don’t even live. Anacostia is a wonderful neighorhood. It has beautiful houses, art galleries, a coffee shop, Historic Estates (Cedar Hill) and a brand new library. The residents are friendly, new businesses are opening every day – including a another sit down restaurant.

What burns our $%#$% is when someone writes negative things about somewhere else entirely and because either they don’t know (as is the case here) or they don’t care (still trying to figure that one out) and we — those of us who live here — are left to pick up the pieces and go around correct other people who read this inaccurate posts and keep perpetuating the ignorance.

It may be a small thing to you – but its a big thing to us. Its where we live. You may think it is a “ghetto” so not worth the simple respect of getting the name right to us its our home so yes we are going to take that very seriously.

23 thehova August 19, 2010 at 4:06 pm

I’ve only been to DC a few time. I immediately knew what Tyler was referring to (west of the river). Indeed, if Tyler would have referred to the area as ward 7 and ward 8, those largely unfamiliar with the DC area like myself would have been confused.

I wouldn’t downplay safety (or perceived safety). Most people intuitively understand shopping malls in suburbia as safe areas. The same can’t be said for dense, inner city neighborhoods.

24 false_cause August 19, 2010 at 4:31 pm

I think the commentary from residents says a lot in response to the initial question.

25 Patrick L August 19, 2010 at 6:06 pm

Most business owners decide on a location by driving around and finding a spot they like. If most potential resteraunt owners do not drive through Anacostia, they won’t think of it as a potential spot for a resteraunt.

This fact is the proof for why Super Markets are located in poor locations and money is being left on the table through their under representation in poor locations. I believe this blog or another posted a link to a paper on the subject a year or two back.

26 Ilaine August 19, 2010 at 10:42 pm

Actually George Mason IS in Arlington, not just Fairfax. That is to say, the law school is, and various think tanks like the Mercatus Insitute.

And there are far more wonderful restaurants in that area than the Fairfax campus.

Why? Not money, I think probably the average disposable income around the Fairfax campus exceeds that around the Arlington campus. I think it’s because more working people are in the neighborhood for lunch and dinner before heading home, vs. the opposite for Fairfax.

I wish we could discuss this with civility.

27 Wayne August 20, 2010 at 9:24 am

Reputation? If you’ve lived in the DC area for a long time, Anacostia was once synonymous with “drugs and murder”. If there was drug-related violence on the nightly news, your first guess would be “Anacostia”.

A lot has changed since then, but the association — rightly or wrongly created back in the day — probably lingers in many minds. Which would tend to bias a lot of suburban diners (including lunch for commuters).

And, as others have said, most restaurants need to either be in a place that is a nightlife destination, or in a place that has businesses around that create a good lunch traffic. Traditionally, Anacostia has had neither.

28 DG-rad August 20, 2010 at 3:51 pm

Rich,

Actually, it is to protect the reputation of Anacostia, which is a unique neighborhood. If you call everything “Anacostia” it waters down what makes ANACOSTIA unique: home of Frederick Douglass, closest community to the Navy Yard, a historic district, home of the only coffee shop east of the river, etc etc.

When someone says “shooting in Anacostia” but really they mean Washington Highlands, then it hurts Anacostia. It’s laughable to say that Rays the Steaks is in Anacostia. Nothing but laughable.

29 Bill Harshaw September 1, 2010 at 1:27 pm

I saw that New Orleans now has 300 more restaurants than before Katrina. How’d that happen and what does it mean for east of the Anacostia?

Comments on this entry are closed.

Previous post:

Next post: