If you want to know where gentrification is happening most dramatically in Durham, just pull out an old map from the 1930s.
The map, which would have been created by the government-sponsored Home Owners’ Loan Corporation (HOLC), highlights in red the neighborhoods that have seen skyrocketing prices and house flipping in the past five years or so — as revitalization of downtown Durham has sparked interest in its surrounding neighborhoods.
It’s a map of what neighborhoods were redlined by the federal government, a term that labeled certain neighborhoods as risky places for banks and mortgage companies to extend credit. In practice, this meant banks would usually only lend to white people in white neighborhoods.
The redlined neighborhoods were all African-American ones — mainly to the east and southeast of downtown — and a lack of credit prevented many from becoming homeowners and denied some the financial security and generational wealth building that home ownership provided.
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“Loans simply were not being made to black people, and when they were, they were at a higher interest payment for a shorter term,” Mel Norton of Bull City 150 told The Herald-Sun earlier this year. Bull City 150, which works out of Duke University, has created public history exhibitions around the foundations of housing inequality in Durham.
Black residents were prevented from moving into some neighborhoods and steered into others by real estate agents, Norton said.
And now, as a new study from the North Carolina Poverty Research Fund puts it, there’s a “land grab” going on in those same redlined neighborhoods. Places like Southside, East Durham and Old North Durham have all seen skyrocketing home prices and an influx of new, whiter residents since Durham has recovered from and thrived after the Great Recession.
It’s striking “just how neatly the redline tracts (from the ‘30s) and the poorest tracts (of today) overlap,” said Heather Hunt, a research associate at the N.C. Poverty Research Fund, in an interview.
Hunt co-wrote the study on Durham with Allison De Marco, as part of a series on disadvantaged census tracts across the state. The study references recent reporting done by The Herald-Sun on gentrification in Durham.
“Even now,” she added, “when some of the effects of gentrification started to appear, it’s interesting how perfectly they overlay” with those old maps.
Redlining was the first domino
As the study puts it: “Past race-based policies on the federal, state and local level undergird economic disparities and gentrification today.”
The census tracts that were historically redlined — and are still largely African-American or Hispanic — are some of the “most chronically distressed in Durham today,” with even the least poor redlined tract having “a poverty rate 31 percent higher than the city overall,” the study says.
But it wasn’t just redlining. Many of the neighborhoods also suffered devastating setbacks starting in the 1950s, when they were designated slums as part of urban renewal programs.
In Durham, infamously, it resulted in the construction of the Durham Freeway through the Hayti neighborhood. The area had been the “epicenter” of a thriving black community, but by the 1950s, city officials considered it “deteriorated,” the study says. Many residents, the study notes, struggled with the upkeep of their homes because they were renters who lacked the incentive or means to improve them, or if they did own them lacked the credit to repair them.
More than 4,000 households and 500 businesses were forced to relocate or close — and many of these residents ended up eventually living in public housing in the redlined parts of town, the study adds.
Historically redlined neighborhoods were also especially vulnerable in the years leading up to the Great Recession, where they saw some of the hottest subprime lending in the country. Those loans often came with high interest rates.
Some of the highest foreclosure start rates in Durham County were in historically redlined tracts, according to earlier research by the N.C. Poverty Research Fund.
But, if nothing else, the destabilization caused by “multiple foreclosures in close proximity created an environment ripe for investors/flippers to zoom in,” Hunt said.
Where it’s happening
The study identified three neighborhoods, all of which had historically been redlined, as loci of gentrification. All are near or next to downtown, an area where the median residential sale price has nearly doubled, from $180,000 in March 2012 to $350,000 in March 2018, the study states.
The attractiveness of a resurging Durham has pushed developers and prospective home buyers toward “formerly overlooked neighborhoods bordering downtown ... (which) include redlined tracts to the south and east of the city center.”
These bordering neighborhoods’ affordability, diversity and historic architecture make them attractive to buyers, “even as their high rental rates and poverty make them susceptible to gentrification ... defined as the influx of higher income residents into underinvested and predominantly poor communities,” the study says.
Those neighborhoods and their residents, many of which are renters, aren’t prepared to handle a sudden influx of cash because of years of systemic underinvestment, Tia Hall of Bull City 150 told The Herald-Sun earlier this year.
“We are not talking about individual acts of meanness,” Hall said of the transformations of neighborhoods. “You have to look at the forces that created what you see.”
An influx of new residents can lead to the displacement of former residents, who sometimes see their rental unit converted into a single-family home or sell their own homes for cash rather than make costly repairs.
In some of the redlined census tracts east of downtown, the study says, that change is well underway, with a majority of home loan applicants in 2016 being white. “Since about 90 percent of residents in these tracts are black and Hispanic, the disproportionate number of white home buyers indicates changing neighborhood demographics,” the study adds.
And with that new interest, prices have skyrocketed. This was especially true in Southside, a former section of the Hayti neighborhood.
In Southside, which was the focus of city-led revitalization project, the median price per square foot for homes sold there jumped from $18 in January 2014 to $133 by September 2014, the study found. And by February 2018, it stood at $164 — an 803 percent increase from six years earlier.
And while many homes were built at affordable prices, as part of the city’s revitalization project, “private market construction is selling for $450,000 and more,” the study adds.
“Southside ... saw most of the worst of the recession,” Hunt said in an interview. As well as “the worst or the best — I am not sure which word to use — of the gentrification. It had the quickest turnaround in a way.”
The eviction rates in the redlined tracts, especially around Southside, is higher than the rest of Durham County. Tracts 13.01 and 23 (around Southside) had the second highest eviction rates in the county in 2016, according to the study. “So many eviction motions were filed that nearly a third of all renters in these two tracts could have been affected (although some renters may have experienced multiple filings),” the study adds, noting that in total, 500 evictions took place in formerly redlined tracts in 2016.
Not every eviction filing results in an eviction. With a current rate of 900 eviction filings every month in Durham, however, city leaders have declared the issue a “crisis” for Durham, The Herald-Sun reported. The City Council voted in May to provide $200,000 to help fund a new eviction diversion program that was started by the Duke Law School Civil Justice Clinic.
One African-American homeowner, who had lived in Southside since 1958, told the authors of the study that the Southside is becoming increasingly white, a stark departure from its past. “‘Basically, this part of South Street, everybody is white,’” the homeowner is quoted anonymously as saying.“‘It’s a shame that in the ‘50s they didn’t want to be around us. Now, all of a sudden they want to be around us. They want to be in our neighborhoods. I wish they felt the same way back then because I’m sure this would be a better place to be (if that had been the case.)”
To a lesser extent than Southside, East Durham and Old North Durham also have seen dramatic changes.
From February 2012 to February 2018, the median price per square foot for homes sold in East Durham increased from $37 to $122, a 230 percent increase. A lot of that price increase has occurred in the past two years, the study says. And while the median sales price in East Durham is still below the citywide median, the difference has narrowed from $150,000 in April 2016 to $41,000 in March 2018, the study adds.
And in Old North Durham, an area that has many “historically significant homes,” the median sales price in March 2018 was $405,000 — up 938 percent from six years earlier, according to the study.
A hard question
The report from the N.C. Poverty Research Center doesn’t offer any policy suggestions, but Hunt, the co-author, said that the city of Durham is already wrestling hard with the question.
But there’s not an easy answer, she added.
“This is an example of a cycle that once it starts going, it is really hard to stop. Once that momentum builds it’s hard to divert that,” Hunt said. “How do you stop private market forces at work? What role does a local government have in stepping in and either softening that blow or finding alternative housing?
“I think those are really, really hard questions, and true for cities all across the United States.”