Changing food stamp distribution to attract new grocers
Changing when food stamps are distributed could lead to more grocers in low income areas.
With one in four Baltimoreans living in a food desert, city officials have a long road ahead to deliver on promises of healthy, affordable and accessible food options. One of the city's approaches follows a tried-and-true roadmap that involves offering incentives, like tax breaks for locating in underserved areas, to retailers and developers — also known as "fresh food financing." Created over the last decade, these types of incentives work; in Philadelphia, the number of people living in food deserts was cut by 56 percent this way, for example.
There is a simpler, less costly solution under consideration, however: changing when food stamps are distributed.
Stretching the food stamp schedule over a longer period of time gives retailers a steadier, more reliable source of income in low-income neighborhoods. According to the U.S. Department of Agriculture, most participants in the Supplemental Nutrition Assistance Program (SNAP, formerly called food stamps) spend almost all of their benefits two weeks after receiving them. Afterward, food retailers, especially supermarkets, see much less traffic, as customers' monthly food budgets are exhausted. Currently, Maryland, New York and Pennsylvania all distribute food stamps over a 10-day period, but as reported by the Baltimore Business Journal, city and state officials may change that.
As a method to combat food deserts, this is a bold intervention. Considering the fixed costs of operating a supermarket — paying rent, keeping the lights on, compensating employees to stock shelves — monthly periods of weak sales inflict significant economic pain on retailers. Food desert neighborhoods already may face higher costs of development and operation, so the added uncertainty from SNAP fluctuations makes the economics around these stores even more challenging. In neighborhoods where most households rely on SNAP, these effects are amplified.
Changes to SNAP schedules are infrequently discussed as ways to improve food access and seriously considered even less often, though they may be game-changing for food retail. By extending the food stamp distribution schedule, government officials give food retailers major assistance with their business planning and operations. A steadier income stream changes the calculus for opening new stores, perhaps making some projects financially feasible in current food deserts. Paired with other development incentives described by Baltimore officials, the idea of new supermarkets comes into even clearer focus.
If implemented, this change to SNAP will amount to an enormous favor to developers and food retailers. Indeed, setting up shop is more difficult in a food desert than out of one. At the same time, the city is granting unique access to underserved markets, meaning that a retail project, implemented correctly, can capture a large slice of the Baltimore food marketplace for itself. And though it may result in increased opportunity for Baltimoreans in the long term, the short-term will require adjustment by low-income households.
Consider some possible effects of changing food stamp distributions. While SNAP dates might change, paychecks will arrive on the same schedule. Similarly, landlords will still expect rent, and utility companies will look for bills to be paid on time. What if a SNAP participant relies on a neighbor for a ride to a supermarket, but now they have a different distribution dates? Care must be taken to see that forced changes to SNAP distribution do not further complicate the already difficult task of food shopping while poor.
If Baltimore officials ask their constituents to deal with changes to the SNAP schedule — a reform designed to benefit retailers — they should also offer assurances that food desert improvements are on the horizon. Even once projects are in the pipeline, what can residents expect? Before development incentives are distributed, these expectations need to be made explicit. Will communities get full-service supermarkets, or will they get deep-discount chains? Will neighborhood residents be eligible for the jobs new stores create? Will community members have a say in the development process and be able to advocate meaningfully for store features, such as community rooms, pharmacies or banking services?
With a decade of experience in fresh food financing, developers and retailers are able to create innovative and high-quality supermarket projects, even in food deserts. Especially if they are successful in changing food stamp schedules, Baltimore officials should prepare to negotiate for the type of food access their citizens want and deserve.
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