On Gentrification

I received this email from Gregg Warren, President of DHIC, Raleigh’s premier developer of affordable housing. He asked that we share his message.

Good evening—

I hope that you had a wonderful and fulfilling Mother’s Day. Below is an Op-Ed that I recently sent to the N&O. Apparently, the editorial staff chose not to publish it. So, I’m putting it out there for anyone to share. There is much mis-information regarding the changes that are occurring in our neighborhoods that adjoin downtown Raleigh so I thought I would offer my perspective having worked at DHIC for 30+ years.

Feel free to post this elsewhere if you find it helpful.
Gregg Warren
President
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Subject: Let’s not debate whether gentrification is good or bad – it’s action that counts

Downtown Raleigh recently made the front page of the New York Times as an exemplar of gentrification – the process that dislocates traditional low-income residents, typically people of color, and changes the social fabric of a neighborhood. South Park, the historically black Raleigh neighborhood near Shaw University, was cited for its steep increase in higher income white residents in the past five years and the resulting fears of longtime black residents that their neighborhood will become both unaffordable and unrecognizable. 

In response, the N&O weighed in with Ned Barnett’s opinion piece, wondering whether gentrification is indeed a “bad thing”. True, our gentrifying neighborhoods make it possible for younger, mostly white professionals to live near downtown and to walk/bike to work and for a vibrant food and entertainment scene. Gentrification can also be a boon for existing homeowners, Black families that have lived in southeast Raleigh for generations who are willing to cash out on their appreciating properties and move out of downtown. That’s if they get a fair purchase offer.

But Barnett makes no mention of the many low-income renters near Raleigh’s downtown who see no upside to gentrification. They are losing their lower cost rentals to the high-priced homes that gentrification ushers in. Given Wake County’s shortage of affordable housing – a gap estimated at 56,000 units – their search for affordable replacement rentals will be difficult indeed.

If we want to get serious about tackling the downsides of rapidly changing communities in and around downtown, we need to understand the challenges and talk about what we are doing to make sure that longtime, low-income renters and homeowners (almost entirely people of color) can afford to remain in their homes and neighborhoods.

The City and County have made creating and preserving affordable housing a priority and have created dedicated sources of funds to make their actions count. Raleigh City Council increased the property tax rate by 1 cent to generate about $5.7 million a year for affordable housing and the Wake County also increased the tax rate by 1 cent, generating about $15 million a year for affordable housing.

Both the City and County invested in the preservation of Washington Terrace, located in east Raleigh where gentrification is rapidly changing the face of the neighborhood. Originally built in 1950 as Raleigh’s first rental community for middle class Black families (who were denied access to predominantly white neighborhoods), Washington Terrace fell into disrepair and was in foreclosure when DHIC bought it in 2014. Today, following a year-long community planning process, the 23-acre property is newly redeveloped with 234 permanently affordable rental units for both families and seniors. More importantly, the redevelopment of Washington Terrace took place without displacement of the original residents.

The City and County are also helping to fund Beacon Ridge, 120 units of affordable rental apartments, at the new YMCA and Southeast Raleigh Elementary School site off Rock Quarry Road, partnering with the Southeast Raleigh Promise and DHIC. After years of worry about what will happen with the affordable Sir Walter Apartments on Fayetteville Street, firm plans are now in place to renovate and preserve these rental homes for seniors, with the help of low-cost City financing.

The City and its partners are also making an effort to mitigate the negative impact of gentrification on renters in the South Park neighborhood so prominently featured in the New York Times.  Last Tuesday, the City Council approve $5 million in low cost loans that will produce 354 units of affordable apartments just a few blocks away from the South Park neighborhood featured in the NYTimes article.

To be clear, more needs to be done to ensure that all residents enjoy the economic and real estate boom around downtown Raleigh, and that starts with not just a theoretical debate on the merits or downsides of gentrification but a real commitment to making sure that longtime neighborhood residents most likely to be hurt by this change have the opportunity to stay in homes they can afford.

Gregg Warren is President of DHIC, Inc, a non-profit developer of affordable housing. With over 2,500 apartments under its ownership, DHIC is the Triangle’s largest owner of affordable rental housing.