The South Bronx is a cross section of everything wrong with America

The horizon is made hazy with dusty air—a consequence of high levels of pollution. New high-rise housing properties—with their sleek steel metal frames and vivid pops of color demanding $3,000 per month on average, which are cropping up along the neighborhood’s waterfront—stick out like sore thumbs against the backdrop of longtime staples like laundromats, bodegas, and vacant buildings. 

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The South Bronx faces many of the same challenges that scorn the rest of the country, namely too little financial funding for small and local businesses, unaffordable housing, rampant inflation, and insufficient neighborhood safety. Decades of redlining and disinvestment, combined with a historical legacy of environmental racism in the area has created a perfect storm of poverty. The community, though, is much more than a cross section of consequences of the country’s poorest policy decisions, which are now so dire the majority of Americans feel intense stress and uncertainty about their ability to buy homes and even keep food on the table.

While the South Bronx has been hit hard, it’s learned resilience as well. Fortune spoke to several South Bronx entrepreneurs who have set their sights on making it: doing what they love in their home borough, and creating business models built around improving the neighborhood’s core issues. 

The journeys people take to become business owners in the South Bronx is as diverse as the people who live there, a largely Hispanic and Black population of roughly 727,000. There’s Carlos Cortes, who crossed the ocean from Puerto Rico to bring a branch of his family’s 94-year-old chocolate company to the Big Apple; Omar Canales, who manages internal technology at his cousin’s family-owned restaurant, which specializes in the cuisines of the six regions neighboring Mexico in Central America (and is also one of the only sit-down restaurants for miles in the neighborhood); and there’s Eric Kelly, a former U.S. national boxing champion who opened a gym to help South Bronxites—from children to the young and addicted—indulge in a healthier outlet for their stresses, which he believes was instrumental for himself growing up in Brooklyn.

But you cannot understand the story of the South Bronx without delving into the policies and decisions that now fuel its residents’ disproportionate stresses. As the poorest congressional district in the country, the South Bronx has long lacked resources like recreational options for youth, funding for schools and access to internet, access to healthy food, commercial investment, and banking relationships. Then there’s the construction of several major highways and bridges, which reports cite as examples of environmental racism, or designing cities such that communities of minorities or people of color experience the most detrimental health effects, like polluted air and few green spaces. 

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Several expressways, including four major highways and bridges, crosshatch right through the center of the South Bronx to service food-distribution centers, waste-management facilities, and factories, resulting in at least 15,000 trucks passing through the South Bronx daily. Its residents make up just 6.5% of the city’s population, yet host two-thirds of the city’s waste sites, incinerators, and factories. As a result, the borough’s asthma-related complications are sky-high compared to the rest of the city. According to city data from 2021, Bronx children under age 17 experienced six times the amount of emergency room visits for air pollution-related asthma than any other borough.

Leveling with so many historic challenges, South Bronxites seem to have leaned into the ‘small but mighty’ mentality. Small businesses have played an oversized role in the South Bronx economy for decades due to cheaper start-up costs and reluctance from larger enterprises to invest there. The average business employs just four employees, and nearly 95% of business owners rent their space, according to a 2022 study by the New York City’s Small Business Services. 

Nearly half of businesses don’t have a website. A look at the neighborhood’s retail landscape reveals the majority of storefronts—about 9.5% in the neighborhood—are delis or bodegas, followed by restaurants (8.3%) and those that are vacant (also 8.3%). In Mott Haven, located along the Harlem River on 138th Street and bordered by the Melrose, Port Morris, and Hunts Point neighborhoods, the average age of a business is 11 years, and one in six businesses have been operating for more than 20 years. 

The challenges these business owners face—like securing financial and government support, dealing with city regulations, and inflation—are much the same as the rest of the country, but with an important differentiating factor: The immense level of poverty has remained largely unchanged for decades. 

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That worry is top of mind for Omar Canales, who has spent the last 12 years helping operate his cousin’s Central American restaurant, Seis Vecinos (which translates to Six Neighbors, representing the Central American countries alongside Mexico). Canales, who received his master’s degree in business management at Pace University, told Fortune, “the most nerve-wracking thing at the top of everyone’s list right now is inflation.”

“No one wants to sacrifice quality because that’s the reason why people come back. It’s the never ending topic of the cost of goods for everyone going up,” he said, “while the poverty line remains the same.”  

Canales grew up in what he described as “the projects,” in Soundview—and at around age 14, moved roughly three miles west to the South Bronx neighborhood of Morrisania in 2000, where he still lives now. 

Between 2011 and 2021, the share of South Bronx households below the federal poverty line declined from about 39.7% to 36.3%, according to a New York State Comptroller report on the South Bronx economy, while major expenses, like housing, have been rising disproportionately. The report found the area’s median income rose by about 30% within the decade, while median rents increased by over 40%, leading to more renters spending over a third of their income on rent by 2021, too. 

When it comes to keeping up with the cost of goods, Canales said, you win some and lose some. Some factors, like his neighborhood’s two-mile vicinity to the Hunts Point Cooperative Market—the largest food distribution center in the world that generates about $2 billion in annual revenue and services supermarkets, restaurants, hotels, and country clubs in the tri-state area—certainly helps keep costs low. Price hikes on imported ingredients required for certain Honduran specialties, however—like cheeses, seafood, and spices—are harder to deal with. 

“We can offer traditional items within the five- to eight-dollar range, at most ten. But then we do have our soups and extravagant dishes that you can easily spend $30 to $40 per person, and for the South Bronx, that is expensive. If we’re talking Manhattan prices, that’s just very normal.” 

“We raise prices,” he warned, “people notice.”

Another challenge many small businesses face includes accessing state and city financial funding meant to aid small local businesses. Audits by City Comptroller Brad Lander, released in December 2022, reveal that city small-business grants underserved the Bronx as a whole. During the pandemic, businesses in the Bronx received only 7% of the $25 billion in federal Paycheck Protection Program loan funds that were distributed city-wide, and received less than 2.3% of pandemic-era city loans and grants, the audit found. 

The reasons why the Bronx typically receives a smaller share of city funds, according to Lisa Sorin, the president of the Bronx Chamber of Commerce, is largely due to its historically negative reputation, which lowers incentives for economic investment, and inadequate communication between city agencies and Bronx business owners. 

“The historic perception of the South Bronx was that it’s not the best place to do business,” Sorin told Fortune, adding that development—like housing around Mott Haven—has changed some of that perception. “Especially on the waterfront, businesses realized that there were opportunities that weren’t there before.” 

Addressing communication issues, she said, is also critical—and involves bridging the language barrier with Spanish-speaking business owners as the borough has a majority Hispanic and Black demographic. “The government in general does not do enough to get information out to minority communities,” Sorin told Fortune.

Another challenge: Requirements for low-income loans often include high credit scores and the ability to show years of tax return records, which are often difficult for small businesses that operate in cash to provide. 

“When you own mom-and-pop stores, accounting is a very loose thing,” Sorin explained. “All these things are taken into account when you’re applying for massive grants, so it was a matter of finding banks that were willing to help them clean up their books so they can access these financial resources.”  

Sorin began partnerships with the few banks that service the neighborhood, namely TD Bank and Ponce Bank, to help entrepreneurs with their applications. 

This tendency of oversight, however, combined with lack of access to legal help, has left many business owners jaded and cynical of the city’s ability to support them. 

Canales told Fortune that applying to city grants “just felt kind of like a raffle.”

“Inconsistent coordination and communication between government agencies and local community organizations causes reluctance among merchants to participate in initiatives designed to support the commercial district,” concluded a 2022 report from the Bronx Chamber of Commerce and the city’s Small Business Services agency. 

More opportunities to apply for loans did come later, in August 2023, when New York Empowerment Zone Corporation announced the allocation of $10 million in loans of $5,000 to $350,000 for small Bronx businesses, to be administered by the Bronx Economic Development Corporation.

While the new loans are a step in the right direction, Sorin cautioned that many Bronx business owners are not out of the woods yet. Since the pandemic, she said, “businesses have not gone completely back to what I consider normal.” For instance, many businesses that were once open 24-hours are now open until midnight. In general, she said, “people are still very cautious as to where they spend their money.” 

Then there’s the topic that, in Canales’ words, “could suck the air out of any room,” and is also another issue made tougher due to the neighborhood’s disproportionate poverty: unaffordable housing. 

According to a May report by StreetEasy, rental inventory increased the most in Mott Haven in the South Bronx than anywhere else in the city, up more than 85% from the same time last year. The median asking rent in the neighborhood was $3,050. Meanwhile, the average South Bronxite earns $2,100 per month, while the median household income is $3,500 per month, according to data from the U.S Census. While some new housing buildings recently opened in the South Bronx, including market-rate and income-restricted units meant to service low- to middle-income households, they can still contribute to pricing people out of the neighborhood, or staying vacant due to lack of interest.  

Carlos Cortes, who settled in the South Bronx in 2021 to open a branch of his family’s chocolate manufacturing company, founded 95 years ago in Puerto Rico. He made the move with the help of a New York State initiative aimed to bolster business partnerships with the island territory. 

But the years since have not been without their troubles. With many of the new apartment buildings still not filled, restaurant owners like Cortes are seeing less foot traffic, which, as his primary source of income, is his biggest challenge. 

“Companies are building out all these developments nearby, and we’re depending on that traffic to eventually manifest,” Cortes told Fortune. “At the same time, it feels as though they’re not also investing back into the community so the neighborhood is clean and safe.”

Additional challenges he faces include sanitation and safety, as incidents of petty crime make broken streetlights or looted cars a frequent sight. His own shop was broken into four times in October 2023. 

Dealing with the pandemic as a small business in the food industry, he said, has also left him with “a lot of loans to pay off.” He tried to make several improvements to his storefront, like requesting permission from the city to paint a mural on the underpass of the bridge nearby and to relocate a Citibike stand so he could install outdoor seating on his storefront’s portion of the sidewalk. 

“Two years, I’d been asking for that,” Cortes told Fortune, adding that after several months of emails that went unanswered, the Department of Transportation refused his request. “It’s red tape everywhere. I’m trying to help the community in terms of making the neighborhood feel alive, lived in and safer. I feel abandoned sometimes.”

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Bringing more vitality and life to the neighborhood is also the main inspiration of another neighborhood entrepreneur, 41-year-old Michael Eagan, who also goes by his stage name DJ Spynfo. Eagan, a Mount Eden-native, established his venue and performance space, called Sankofa Haus, in early 2021, and has hosted events from financial-advice panels to private graduation and birthday parties, group yoga, and dance parties ever since. 

His goal, he told Fortune, is “creating a safe space in the South Bronx for burgeoning entrepreneurs.” 

His performance space is a multi-use facility that primarily focuses on private events, but also offers free community events with themes like Women’s History Month and spoken-word open mics. Eagan, who studied communications and business at St. John’s University in Queens, told Fortune the idea behind the space starts with its name, Sankofa Haus, an African proverb that means ‘go back and get it.’ 

Often, Eagan said, Bronxites gain “access to education and information, and they may travel and find better job opportunities. With this project, I am trying to find creative ways to bring information back through events.” 

He believes many of the neighborhood’s biggest issues, like break-ins and street violence, trace back to inadequate investments in schools and mental-health resources. 

“Those are all stemming from lack of self-esteem and mental-health problems, whether they know it or not,” he said. “The city should focus on the pervasive mental health crisis that’s taking place, and find the tools, like music and medicine, that would help mitigate it as the number one thing in order for all businesses out here to flourish.” 

The impulse to take care of the community, starting with its youngest members, is not lost on other entrepreneurs, too. Eric Kelly, a 42-year-old Florida-native who grew up in Brooklyn, is a four-time national boxing champion and former member of the U.S Olympic Team who co-founded a gym, called South Box, with his business partner Andrew Roth in 2017. 

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Kelly’s father introduced him to the sport when he was “just a little kid,” he told Fortune, and he instantly fell in love with it. Winning fights built his confidence, he said, and “through that I just found a joy and love for teaching.” 

Kelly’s gym, which opened in June 2017, employs three full-time staff and relies on a personal network of private trainers hired on contract to connect aspiring athletes with professional trainers at affordable prices. The bulk of the gym’s clientele, Kelly said, are young adults in their twenties who are looking to compete, but also includes children as young as age 6. The main goals for the space, the duo said, is to offer a healthy outlet for anybody from children to adults to express their rage and aggression. 

That goal came to life last spring, when the boxing gym partnered with Bronx Community Justice Center to train formerly kids who’ve been arrested or served time in juvenile detention for two months through twice weekly classes. The gym also partners with local charter schools and community programs to offer youth lessons.

“You need to have an outlet so that it doesn’t destroy your life,” Kelly said.

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Roth agreed, adding, “It’s a very interesting alchemy that happens at the gym.” 

To improve the community, you need early investments

The importance of caring for the community’s needs—both physical and spiritual—is something many entrepreneurs seem to intuitively understand. 

“The lack of respect for people’s property is a problem when it comes to running a business,” Eagan of Sankofa Haus said, but he also recognized that many of the people who cause petty crime “might just be trying to survive.” 

The community’s intense poverty, he said, is not just a challenge to respond to, but a window for empathy that you could open, should you choose. 

“When someone turns over my garbage and rips through it to get some food, they’re not thinking about me, clearly. They’re thinking about putting something in their belly,” he described. “It can be very challenging, but I know what we’re doing in the South Bronx right now is going to inspire another generation, my son, and it’s going to inspire his friends.” 

Sorin, who has been closely observing the state of Bronx businesses as the chamber of commerce’s president and member of several New York City council boards, feels optimistic about the business climate despite the hardships. 

“Sankofa Haus now offering such a beautiful space for events would not have been the case 10 years ago because there was nothing but unused warehouses,” she said, adding “opportunities have opened up because of the development and pricing in general.”

But as most Bronxites could tell you, the real value of the neighborhood lies far deeper than the market price of new housing developments and revitalized waterfronts.

Sorin told Fortune, “I happen to believe the Bronx was always that gem, and that people just didn’t realize how fabulous it is until they were forced to look at us in another way.”