2006 Study by Community Development Institute Demonstrates Buying Power of East Palo Alto

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East Palo Alto has a great amount of buying power. A custom tabulation for CDI’s Empowerment Research! program, based on data from the Bureau of Labor Statistics, showed that in 2006 East Palo Altans will spend almost $520 million on goods and services. In 2006, EPA residents will outlay $155 million on housing, around 30 percent of the community’s expenditures, approximately $87 million on transportation and $68 million on food. Underlying the strength of these numbers, however, is the fact that a lot of EPA’s dollars do not remain here. A 2003 study, conducted by CDI’s Leadership Training Academy (LTA) and funded by One East Palo Alto, found that the majority of EPA residents spent money outside of the community. The study was carried out by a team of almost 40 young people who were part of the “Buy Local” training and employment program. The youth surveyed 483 EPA residents over several months, hoping to determine the percentage of goods residents purchase in and out of EPA and, ultimately, to acknowledge the need for particular business services within the community. Though over 40% of surveyed residents go to EPA businesses for their general household goods, transportation and electronics, over half of the respondents repeatedly cited four main reasons for patronizing businesses outside of EPA: better quality, lower prices, reliability and nonexistence. In particular, the survey revealed a great need for businesses that offer personal goods, pharmaceutical goods and a grocery/family store. The continual draining of community consumer dollars into other communities, known as consumer leakage, has long been an issue for East Palo Alto. This phenomenon might have been mitigated only slightly by EPA’s development of big box retail, but the City’s dependency on outside businesses continues; the most recent delayed effort to bring a supermarket to East Palo Alto and the imminent closure of the nearest market, Albertson’s in Palo Alto’s Edgewood Plaza, highlights this persistent issue. Several surveyed residents also expressed their concerns about the redevelopment projects that appear to miss the mark in meeting the basic needs of the community. The role of the City in developing EPA is controversial yet essential and needs to be examined and understood. The above data and the community survey have laid the groundwork and revealed and the need for local business development to satisfy those who desire to “buy local.” The Leadership Institute East Palo Alto (LIEP) has held a series of community forums throughout the month of August to educate members on the history of economic development in East Palo Alto and discuss how residents can leverage their resources, partner with foundations, venture capitalists and the City to encourage development that will be of use to residents. Representatives from the Redevelopment Agency and Start Up have presented at these meetings, contributing to a valuable dialogue. For more information about the forums or LIEP, contact Valicia Saucedo at 650-327-5846 ext. 313 or valicia@cdi-usa.org.