Local retail is a crucial to a community’s economic health and vitality. Local stores invest more of every dollar they receive back into their neighborhood. They also increase the perception that a block is less vulnerable to crime and, as result, boost safety, says Sarah Filley, the founder of Popuphood, a startup that incubates small businesses in empty storefronts.
Popuphood aims to revitalize local communities, block by block, by encouraging retailers to set up temporary “popup” shops with hopes of enticing them to stay. “It’s the best way to kickstart neighborhood development,” says Filley.
It’s an idea that’s catching on, especially as rising real estate prices and changing neighborhood dynamics have contributed to vacant storefronts and turnover. In New York, for example, a social venture called miLES transforms unused storefronts into popup shops. Since miLES began working in New York’s Lower East Side in 2013, it’s enabled more than 100 popups, ranging in length from one day to six months, in four cities.
Filley’s story begins in 2011, when she was looking for a way to boost the economy in downtown Oakland, Calif. During that post-Great Recession time, it had been largely abandoned for daytime retail use, says Filley. Yet a monthly arts festival held downtown drew crowds of as many as 30,000 each month, indicating the potential for more retail demand.
That led to an idea: tap the creativity in the area by taking advantage of the many vacancies and turning them into an economic development booster and business incubator. With its many trees and 1800’s architecture, the four-block downtown seemed to be the perfect place. Retailers could set up shop temporarily for free, with the option of extending the lease if they hit certain milestones. “We would incubate unique retail tenants to catalyze local development,” she says.
At the same time, the co-founders were invited by city and community groups to participate in brainstorming a redevelopment project, with funding from the state of California. The idea was a hit and got approval.
Three months later, they started what they called the Pop-up to Permanent Program with a 750-square foot storage unit they converted into retail property. Ultimately they fixed up another four 1,000 to 1,500-square foot spaces in three buildings on two blocks. As word spread, the project’s popularity grew and Filley started an application process for retailers from other areas. Since then, she estimates that 11 lease-holders and many more vendors, trunk shows and others have worked there. At the moment, the area has three long-term lease-holders with several more to open up shop soon, with no vacancies.
Scaling the Model
Kerri Johnson runs Marion + Rose’s Workshop (pictured, above), one of the first five retailers and a seller of handcrafted goods. According to Johnson, who had run a gallery in the neighborhood, getting the six-months free rent made it possible to start her store. It gave her enough time to get going and see whether her business had any legs. “Without the project my shop wouldn’t have been able to survive here on it own,” she says. What’s more, the project received a lot of media attention when the stores opened, providing a free promotional bonanza.
Filley soon realized the approach could be exported to other places. “If we can do it there, we can do it anywhere,” she says. She’s now working in other Oakland neighborhoods, plus Hayward and Marysville, Calif. Popuphood is open to working with cities, Community Benefits districts, Business Improvement Districts, property owners and developers, as well as local businesses.
For example, it recently partnered with the developer Avalon Bay to open an empty pop-up space in the ground floor of a new residential building. Filley hopes that partnership will be the first step in working with more developers.
She’s also talking to the European Union’s network of creative hubs and coworking spaces about applying her model to address the influx of refugees living in camps in the area. “There are thousands of vacancies in apartments and commercial real estate and they’re trying to come up with possible solutions,” she says. Pop-up to permanent stores just might be one of them.
Photo credit for Marion + Rose’s Workshop in Oakland: Abbey Wilcox
Anne Field is a New York-based journalist who writes about social enterprise and impact investing. A version of this article originally appeared on her Not Only For Profit blog on Forbes.com.