William Downey has had an unwanted front-row seat to the astronomical – but in many ways typical – transformation of the real estate market in one US city. A decade ago, as his neighborhood in Durham, North Carolina, was just beginning to gentrify, his landlord sold the apartment Downey had occupied for more than 30 years.
Downey, a Black man now retired from his job as a supervisor in a chemical plant, had to move. But he landed on his feet, winding up across town on East Geer Street. Located near downtown, the area had a history of gun violence and was less desirable to outsiders, and Downey was able to afford his own home. “I love it here,” he said.
Gradually, however, nearby communities began to change: decades-old houses were flipped or demolished and replaced with Craftsman-style bungalows selling for $500,000 and up. But that stretch of East Geer Street, dotted with modest homes and duplexes, remained an anomaly. Almost 70% of its residents are renters, and most are working people: overnight stockers at Target, school cafeteria workers, Uber drivers.
Now gentrification has come to this corridor, too. In 2018, the owner of the house nextdoor to Downey’s – a one-story, 1940s-era home, much like his own – sold the property to a developer, displacing the family that had been renting it. The builder tore down the house, together with two others on the block.
Today, in their places stand three modernist homes with multiple roof decks that rise three stories above the street. Last year, one of them sold for close to $1m. Boxy and clad in white stucco, the houses wouldn’t look out of place in southern California, and neighbors have nicknamed them the “robot houses” and “desert palaces”. Many view them as harbingers of what’s to come for Durham.
Like many US cities, Durham is experiencing an existential crisis spurred by high housing prices and the displacement of lower-income residents. The big question is how to avoid that fate, and it has led to a fervid local debate that echoes a national conversation.
Is the solution fewer zoning restrictions in order to juice supply, or should cities prioritize thoughtful growth paired with robust policies to stabilize housing at the lower end of the spectrum? As cities attempt different approaches, some answers are emerging.
Metropolises like Washington DC and San Francisco began grappling with intense development and displacement over a decade ago. But for many smaller Sunbelt cities like Durham, Austin and Nashville, it’s a newer phenomenon.
Durham and neighboring Raleigh are among the nation’s fastest-growing cities, and the pace of growth here may pick up further: Apple, Meta and Microsoft have all announced plans to open offices or expand existing presences in the region.
The county’s population, now 333,000, has grown 20% since 2010. Newcomers are often young, wealthier professionals from New York, DC and California who are drawn to the region’s blossoming tech and healthcare sectors and to housing prices that seem reasonable compared with where they last lived.
They are relatively reasonable – according to Zillow, the city’s median home sale price in February was $373,000. But that’s an increase of 67% over the past five years. The housing market has cooled down somewhat since a high last summer, but realtors say inventory still moves quickly.
Very few of the units are affordable to lower-income residents – those earning 80% of the area median income or less. Most seem to be priced for new residents.
Locals from disinvested neighborhoods that once regularly experienced drug-related violence now complain about being deluged with postcards and calls from developers hoping to buy their homes. Construction seems to be happening everywhere: in and around downtown, within older residential areas, and in vast swaths of former forests and farmlands throughout the county’s more suburban sections.
Race is part of the discussion about what is happening. A former textile and tobacco processing hub with a large Black population, Durham was home to its own groundbreaking “Black Wall Street”, a critical mass of business, civic and educational institutions led by and designed for Black residents during the first half of the 20th century. Later the city suffered from disinvestment as a result of suburbanization, white flight and disastrous urban renewal policies. But the city retained a strong Black middle class and, over the past few decades, developed a reputation for progressivism and racial diversity.
Today, however, advocates say that legacy is under threat from unbalanced economic growth. Low-income residents in central Durham tend to be Black, and they’re the ones most affected by the city’s current transformation.
“Durham is turning into something different from what it’s always been, which is a place where Black people could be able to thrive,” said Camryn Smith, executive director of Communities in Partnership, a grassroots organization based in East Durham. “People think it’s so progressive, but at the end of the day, we Black and brown people own very little. We’re locked out of a system of access and resources.”
It’s possible that the remaining working-class residents on East Geer Street and other communities will eventually be forced out of Durham altogether as their homes are replaced by more expensive options.
One consequence of the increased housing pressure has been a loss of naturally occurring affordable housing: unassuming apartments that have long been available to lower-income people, like the duplexes along East Geer Street. The number of homeless Durhamites has increased almost 300% since 2016, according to the local group Housing for New Hope.
Census data made available by the non-profit DataWorks NC shows that between 2016 and 2021, the Black population decreased in just about every neighborhood in central Durham; in the community around the East Geer Street block, it was almost halved. (Neither the developer of the three new East Geer homes nor his contractor responded to the Guardian’s request for comment.)
“Our theory is that we’re either on the verge of mass displacement or are already experiencing it,” said Russell Pierce, Housing for New Hope’s executive director. “There’s no part of Durham that’s perceived as undesirable at this point.”
The dispute between those who believe the solution is less zoning to allow for increased, unfettered development and others who say cities need to better wield the tools they have is playing out here in real time.
Some local housing advocates, as well as several members of the city council, say more housing units are needed to accommodate the new residents flowing into the city. “Restricted supply raises prices,” said Mark-Anthony Middleton, the council’s mayor pro tempore. “When you have motivated buyers who come here, who’ve decided already that they’ll live in Durham – if we’re not increasing supply somewhere in the city, they’ll enter the market and compete with who’s already here.”
In 2019, the city council voted to amend single-family zoning rules in some neighborhoods to allow for more density. Over the past year, the fruits of that change have become apparent: supply is increasing, but prices aren’t going down. On some lots in popular communities near downtown, three brand-new homes priced at $400,000 each now stand where there was once a single $300,000 house. Indeed, a recent Urban Institute study of over 1,000 cities around the country found no association between loosened land-use restrictions and lower housing prices.
That outcome doesn’t mean the policy has been a failure, said Dan Levine, director of real estate at the Durham-based Self-Help Credit Union, which does real estate development throughout the state. “It’s still serving more families, so I think that’s a positive,” he explained. “It proves that there’s demand at all levels.”
The city government is now considering taking the supply argument even further. A local developer recently submitted an amendment to Durham’s zoning and land-use regulations that would reduce restrictions on builders even more. According to opponents, however, it would open the door to a flood of upscale housing throughout the city and more displacement of poor and working-class residents.
“The development community is driving that conversation,” said Bonita Green, president of the InterNeighborhood Council of Durham, which has deeply analyzed the new legislation. “There’s no conversation about what is our current inventory at different area median income [levels] and where do we need to fill in the gaps. It’s just: ‘We need to build.’”
What’s being lost, she and others say, is the reality that in a booming market, lower-priced housing won’t happen without incentives or subsidies: new construction will be priced at whatever level the market will bear. Even if affordability does trickle down as supply is increased, that process could take a decade or more. It won’t do much for residents who need assistance now.
To their credit, Durham’s leaders have been working to build and preserve more low-cost housing and to protect threatened residents. In 2019, voters approved a $95m bond for affordable housing, the state’s largest. The city government has also dedicated land and funds to affordable housing efforts. But currently, only a few hundred affordable units are being created every year.
Some housing advocates believe that instead of reducing zoning and other restrictions, the city should actually wield its regulatory power more forcefully to increase the stock of reasonably priced homes. “Cities can shape things,” said Nate Baker, an urban planner and member of the city’s planning commission who declared his candidacy for Durham city council in late April.
Officials could offer perks to developers – for example allowing them to build on smaller lots – in exchange for the inclusion of some affordable units.
In Austin, Texas, where housing prices have increased by 50% over the past five years, officials have worked to strengthen land-use regulations in order to incentivize more affordable housing, while also utilizing many other tools available to them as a municipality. It has issued four affordable housing bonds totaling $720m over the past 17 years; the money helps developers build affordable housing, assists residents in buying and maintaining their own homes, and is used to purchase vacant land around Austin where the city government can build its own housing developments – units that will remain affordable forever. The city also runs a community land trust that sells lower-priced homes.
For a metropolitan region that has experienced a deluge of residents and tech sector investment over the past few years, it’s not enough: Austin has its own significant displacement problem. But housing officials say they’re doing everything they can, as creatively as possible – “To the best of our ability, with limited resources,” said Mandy DeMayo, deputy director of Austin’s housing and planning department.
The reality is that in a nation with deep income inequality and growing construction costs, there may be no way to fully rein in runaway housing prices. Cities such as Durham that are experiencing major growth will need to use every weapon in their arsenal if they want to protect vulnerable residents.
“The free market is great, but it’s not for everybody. As long as we recognize that, we can put in place policies that can help those who the market can’t help,” said Roberto Quercia, a professor of city and regional planning at the University of North Carolina at Chapel Hill. “It’s such a complex problem; the best solution is ‘all of the above’. There’s no silver bullet.”
Along East Geer Street, some of William Downey’s working-class neighbors have no idea where they would go if their landlord sells the property. Many would probably have to leave the city for good. Meanwhile they look on, bemused.
When the “desert palaces” emerged, “I was like, what the hell?” said Koketa, a renter and mother of two who asked not to give her last name.
“There are a lot of new faces around here,” said Josh, an Uber driver who also only wanted to give his first name. East Geer Street still feels familiar to him – for now. “This is the only place that hasn’t changed.”
