During the early 1940s, a city housing authority, Metropolitan, pushed through a plan to revitalize a blighted part of Stuyvesant City. The contract called for the demolition of old buildings and construction of modern apartment buildings. The company secured a tax exemption for 25 years from the city based on the enhanced value of the project. The plan and contract were approved by the city's Board of Estimates and Planning Commission.
Although the city has undergone a dramatic transformation, its strong sense of community has not. The name Bed-Stuy is derived from the merging of two villages, one of which was the first free black community in the US. The city's current population sits at over 182,000. In the late 1990s, the neighborhood was home to nearly three-quarters black residents.
The community's economy has continued to improve, outpacing the city's overall growth. The number of businesses in the area has increased by 73 percent since 2000, compared to a rate of 48 percent for Brooklyn. In addition to the 1,900 businesses, around 27,000 people visit the community every day. Most businesses are small and family-owned, with the exception of a few large corporations. Common business establishments include real estate offices, grocery stores, nonprofit organizations, and personal service establishments. Stuyvesant City also includes 1,318 residential units and sixteen restaurants.
As the racial makeup of the neighborhood shifted over time, many African-American residents became concerned that they would be displaced from the area. The white population was scarce in the eastern parts of the neighborhood, so the white presence in the area seemed tenuous. By the late 1940s, only a handful of White people remained in the community. In addition to the gentrification process, residents were often discriminated against.