Inevitable—that’s the word many Hammell Drive occupants use to describe the slow and devastating transformation of their working-class neighborhood into a multimillion-dollar apartment complex.
The gentrification of Raleigh seems inevitable to many living in formerly affordable houses. But that knowledge didn’t soften the blow when residents and business owners near Dix Park were told to abandon their homes and offices within 30 days.
“Right now, my partner and I, we’re technically homeless,” says Francisco Ceron-Sagastume, who was forced to move out after Christmas. “We’re living in a hotel until we find housing.”
Ceron-Sagastume and his partner, Migel Saldana, lived at their home overlooking the Raleigh skyline for two years before receiving a 30-day notice from new property owner SLI Capital in December stating their lease wouldn’t be renewed.
The Raleigh-based real estate investment firm bought 7.5 acres of open space plus existing homes and businesses at the corner of South Saunders Street and Hammell Drive with plans to turn the property into a high-end apartment complex. The first phase of the project will result in two 20-story towers containing hundreds of apartments. The company also plans to build new commercial and office space.
A city under construction
Development around Dix Park has spiked in the past year, especially as the Raleigh City Council moves forward with an ambitious plan to turn the oft-underused green space into the city’s best public park. The first phase of the project is already under way, with landscape architects drawing up plans for a new plaza—complete with waterfall, playground, and picnic grove—just across the street from the Hammell Drive development.
Near the east corner of the park, off South Saunders Street, Kane Realty Corporation will soon start construction on a 10-story apartment complex with businesses on the ground floor, dubbed Park City South. A few blocks south, 145 acres on either side of South Saunders Street are reserved for more 12- and 20-story mixed-use developments.
The rezonings, which were approved last year, would add more than 1,400 apartments to the city’s housing supply, all along a major transportation corridor, with many within walking distance of the bus system and farmers’ market. But with so much housing demand, the units are unlikely to be affordable for those who previously lived along South Saunders Street.
Moving out
Ceron-Sagastume and Saldana weren’t the only ones pushed out by the Raleigh development. Another four families, who were subleasing homes from a nearby business owner, were also displaced, Ceron-Sagastume says.
“It’s not OK that people are displaced and pushed out so easily,” he says. “All these developers are just buying out all these homes in magnitude.”
The couple is now looking for another place to live in Raleigh, but like many, they’re having trouble finding a home they can afford in such a competitive market.
“The prices of rent are nearly the same for a mortgage, so we might as well own. [But] the market is crazy—it’s horrible,” Ceron-Sagastume says. “We’ve submitted multiple offers—no luck there.”
Businesses on Hammell Drive are having similar trouble, although the developer has given most an extra month to move after facing backlash.
“It’s just been hard in this market to find something,” says Johanna Fernandez, owner of building supply store Sun HS Warehouse. “I’m trying to look for a place around here, but I haven’t found anything. [There’s] not much available.”
Even if Fernandez does find a new location, moving will hurt her business, she says. She’s been at her current location for 10 years and has built up a good customer base.
“It’s terrible,” Fernandez says. “I’m gonna lose a lot of clients, and my business is gonna suffer.”
And that’s the best-case scenario. If Fernandez isn’t able to find another space for her business, “I gotta close,” she says ruefully.
Likewise, Dennis Carter, owner of Anything With a Plug Recycling, is having trouble finding a new space.
“I’ve had a broker helping me figure it out, but places he comes up with are either too far away, too big, too small, and everything’s expensive as hell,” Carter says. “The rent I have, I’ll never find that again.”
In the worst-case scenario, Carter will have to move his recycling business to another property he rents as he keeps looking for a permanent home. Overall, he doesn’t mind seeing new development, he says.
“Everybody enjoys that,” Carter says. “But you have to look at what the cost is to the people that are here. It makes [prices] go through the roof.”
Is there hope for tenants?
When it comes to moving, more time is always better. Ceron-Sagastume and Fernandez each said that having a few more months’ notice would have made a critical difference in their lives.
Under North Carolina law, however, landlords are only required to give a tenant 30 days’ notice that they don’t intend to renew an existing year-to-year lease agreement. City officials can ask development companies to give tenants more time, but state law often swings in favor of landlords.
“We’ve had this happen on Garner Road, where an apartment complex changed hands, [and] people are given a notice saying you have 30 days to move,” Raleigh Mayor Mary-Ann Baldwin says. “We kind of stepped in and we were able to work something out by talking to people and encouraging them to work with the tenants and give them more time.”
But things don’t always work out so neatly. When the Hammell Drive property first changed hands, city officials talked with then owner Atlas Stark about gradually relocating residents and business owners. Negotiations fell apart, however, when the property was sold to SLI Capital and Mack Real Estate Group of New York. At that point, talks about giving residents more time to move ended.
“Going forward, when we look at rezoning neighborhoods, one of the things we need to put in the conditions is, ‘OK, what’s your plan for displacement?’” Baldwin says. “[We need to] deal with that proactively, so we don’t have a situation where someone is surprised by a notice saying you have 30 days. That isn’t fair to anybody.”
City council member Stormie Forte, whose district includes Hammell Drive, says she’s had several conversations with people who want the city to be more aggressive when it comes to preserving affordable housing. People have suggested the city make its own bids for properties such as those on Hammell Drive, where affordable homes already exist.
But, Forte says, “it’s hard to do that when you’re competing against investors in an open market under capitalism. Our pockets are just not deep enough to compete.”
Last year, Wake County approved a $10.5 million bond to protect such housing by buying apartment buildings and lots when they go on the open market. The city, on the other hand, is using $12 million from its affordable housing bond to buy both existing homes and land for future construction.
“We try to work with nonprofit partners and put as many resources into their coffers as we possibly can,” Forte says, “to help them [to build] more affordable housing.”
The bottom line is that housing in the city is market driven.
“Raleigh’s growing in leaps and bounds,” Baldwin says. “We’re a desirable place to live. What we’re trying to achieve is some balance.”
With so many developers flocking to Raleigh, though, it seems, well, inevitable that some people will slip through the cracks.
“[The developers] don’t care. All they see is the potential to win some money,” says Ceron-Sagastume. “And I get it, but we don’t have to lose empathy on the way.”
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