The two-story house has cracks in the foundation so big that daylight shines through to the basement. Filled with trash, it harbors “vermin and vagrants.” The back side sags, and according to an inspection report, the floors, ceilings and walls are riddled with holes. This 100-year-old house, at 501 Oakwood Ave. in Durham’s historic but neglected Cleveland-Holloway neighborhood just east of downtown, escaped bulldozers yet again on Aug. 24 when owner Cedric Russell made a verbal agreement with city officials to bring the structure into compliance with the minimum housing code.

The fragile arrangement buoyed the hopes of a fledgling group of residents from the Cleveland-Holloway community, who over the last several weeks have urged officials to halt the demolition and spare the neighborhood yet another vacant lot.

“I want for it to be appropriately, historically restored,” says Natalie Spring, a relatively new Cleveland-Holloway resident who lives down the street from the boarded-up house. “Instead of taking the time and care of fixing up the old homes, they’re trying to gut them and turn them around quickly.”

The negotiations show the challenges inherent in rebuilding blighted downtown neighborhoods, where vacant lots and boarded-up houses abound, and absentee landlords tend to flip properties rather than invest in repairs: The city can either rely on the word of out-of-town owners like Russell, who lives in Raleigh, or demolish the old structures that could anchor revitalized neighborhoods.

“We’ve been trying to work with whatever owner owned the property to bring it up to code, and because of the historic nature of the home, we haven’t demolished,” says Gray Dawson, the housing code administrator in the Department of Neighborhood Improvement Services. “But this is the last extension on this property unless someone comes up with a phenomenal plan with financial backing.”

On Aug. 31, Russell met with Dawson and other NIS officials. Russell did not return calls for comment, but Dawson says that Russell and his contractor submitted plans for $58,000 in renovation, though they lacked the engineering report and adequate floor plans necessary for a memorandum of understanding, an agreement between an owner and NIS to repair a house. If and when Russell submits the missing documents, the city will delay the demolition order for four months, Dawson says.

Russell owns at least six properties in East Durham, some outright, others through one of three real estate businesses registered under his name. He bought the century-old home at 501 Oakwood for $10,000 in April, long after it had been condemned; efforts to sell it have failed. Two of his other properties have structures with housing code violations and face possible court action. Still, city officials are hopeful that Russell will follow through.

“This is the first time we’ve dealt with him on a project,” Dawson says. “If he fails at this, we may have to step back and look at how he does business. Right now, we have no reason to believe he’s not going to do what he says he’s going to do.”

“There’s no good way to deal with this process,” says Gary Kueber, whose blog, Endangered Durham, chronicles old homes that have met the wrecking ball. “Most of the folks we’re dealing with are unwilling to do anything with these properties…. The general sense is that they always wait until the last minute and then take some action that buys them time.”

Meanwhile, Cleveland-Holloway homeowners, many of them recent additions to the neighborhood who braved the blight to buy homes at bargain basement prices, want even more than the city can ask fornot just housing code compliance, but careful restoration. “People come into the neighborhood and replace the windows and immediately lose the historical character of the house,” says Spring. “Repair the window rather than replace it. Use the original siding rather than vinyl siding.”

At stake, say the residents, is the community’s ability to attract new homeowners that will care for their homes, and no less than the vitality of the neighborhood.

“I like the people that we currently have here in our neighborhood,” says Eleni Vlachos, who bought her home in November 2005 for $32,000. “We want more of them.”