Displacing the poor: Durham's market-driven revitalization

Gentrification, by any other name:

Kielhurn says these stories of dilapidated, unsafe, unsanitary rentals are fairly common. And the poor condition of some of the housing stock in poorer neighborhoods is what allows her, and other buyers, to grab up properties for such low prices. She’s bought many of her properties for under $50,000 and spends the bulk of her funds on renovations. When she rents them out again, she charges what she feels is a fair price for all the work she’s put in, and for the fact that she’ll be more attentive than previous landlords. So prices escalate to $800, $900, or $1,200 a month.

For muni and metro governments, who are already struggling with budget concerns, the idea of allowing the private sector a free hand in revitalization is an alluring one. Costs to the taxpayers are minimized, and the increase in property values ensures a nice tax bonus a few years down the road. But it's also irresponsible, because it exposes a portion of the citizenry to economic hardship that can (and does) result in homelessness and despair. Creating an affordable housing program (that works) is a complicated and costly venture, but it is a critical responsibility that must be pursued:

The need for affordable housing is evident, but while many cities have programs that offer tax incentives or density bonuses for including affordable housing, Durham doesn’t have a concrete affordable-housing plan. And Kielhurn says that while many of her tenants are low-income, the Section 8 voucher program can be a hassle. The waiting list is long, and for landlords, the paperwork is daunting, and the entire process can be length. While they wait for everything to check out, owners aren’t collecting rent on the unit, she says.

“We’re seeing displacement and there doesn’t seem to be a point where this is going to stop unless we do something about it,” says Jillian Johnson, a city councilwoman. “It seems like the natural market curve prices a huge number of people out of Durham very quickly, and I think the process is accelerating.”

Right now, the city is ill-equipped to handle the housing problem. Durham doesn’t have a robust affordable-housing program or the ability to incentivize—or force—builders to make housing affordable in the way that other cities going through similar changes do. The city, for instance, doesn’t have inclusionary zoning laws, which would require that developers building new housing or doing big rehabilitations on old buildings make a portion of the new units affordable. And Johnson says that Durham also lacks strong rent-control regulation, which would prevent the cost of a unit from climbing astronomically over a short period of time. The result is a massive amount of demand for a dwindling supply of lower-priced housing. “We’re finding that for folks at 50 percent or below of the area median income that there’s a severe shortage of affordable housing,” Johnson says. “This is something that we allow to happen by having very few checks on the market for real estate.”

Of course, pursuing more density via multi-family housing projects, either partially subsidized or wholly owned by government, will have to be part of the solution. But it's likely the City Council will have to be dragged kicking and screaming down that road.