A year ago, the house at the corner of Dowd and Hanover Streets was a squat, green cinderblock building. A simple duplex with a gable roof on a block lined with humble homes, one unit was boarded up while the other was in barely habitable condition.
Today, the structure is almost unrecognizable. It’s now a single-family home capped by a metal Dutch hip roof; the cinderblock is clad in stucco atop a fieldstone base, and the backyard is gated and fenced in.
That transformation took exactly seventy-two days; builder John Little purchased the house for just under $100,000 in September and rapidly set about renovating it. The house sold long before construction finished.
“Someone came by and was interested,” says Little. “He didn’t even blink at the price.”
That price: $350,000.
The newly flipped house stands out, but only somewhat. Across the street is a brand-new, two-story craftsman that’s still on the market; a block over is another house that Little built earlier in 2017. And all throughout this community are homes in the process of being demolished, renovated, or built, often several per block. It’s a stunning metamorphosis for a neighborhood that only a couple of years ago was largely home to poor people.
This is East End, that subset of northeast central Durham framed by North Roxboro Street, East Geer Street, Alston Avenue, and Canal Street. Lying just north of Cleveland-Holloway, it’s always been a lower- and working-class African-American neighborhood. But it’s also just twenty minutes by foot from downtown, which makes it desirable in the current housing market. Little is far from alone these days; at least a dozen developers are doing exactly the same thing.
And this neighborhood isn’t the only one experiencing such a rapid shift. Some of those builders are also working in Southside, the neighborhood across the Durham Freeway from the American Tobacco Campus. But that’s a smaller community, one that’s almost reached capacity. East End is much bigger, with block after block of small houses that could still be renovated or demolished.
The human toll is real. The people who lived in the house at Dowd and Hanover Streets are gone; they moved a few blocks east, to the other side of Alston Avenue. Little by little, many other low-income residents who used to fill the community are disappearing, going, say remaining neighbors, “wherever they can.” Naturally occurring affordable housing in neighborhoods like East End is vanishing under the seemingly unstoppable force of gentrification.
It’s easy to fault the developers and investors who had an early understanding of Durham’s dynamics and are taking advantage of them for a profit. But they see themselves as providing a needed service and helping to clean things up along the way. In fact, they say, most of the houses that have been demolished were in such abominable condition that they were barely livable.
“I know people think I’m the gentrificator,” says Little. “But we’re all part of the same hypocrisy.”
Only a few years ago, the city was desperate to improve neighborhoods like East End. The situation that led to the changes here and in other Durham neighborhoods is complicated. No one—and everyone—is to blame.
According to the 1980 Durham Architectural and Historic Inventory, East End was built in the early twentieth century in response to waves of African Americans moving to Durham to work in the mills. It was a working-class neighborhood, and the houses were built with simple materials. Dowd Street, the spine of the community, was soon lined with thriving businesses: restaurants, barbershops, grocery stores, laundromats.
Through the 1950s, the neighborhood was populated by teachers and factory workers who owned their homes.
“But the next generation, their children didn’t stay,” says Michael Jones Jr., owner of Ellis D. Jones & Sons funeral home, which has sat at the corner of Dowd and Elizabeth Streets since 1935. “Then it became a neighborhood of rentals.”
Some houses stayed in the families, but often the owners lived far away and became absentee landlords; others sold their properties, allowing some local landlords to amass dozens of properties. What that meant in practice was that many of the houses weren’t maintained.
“Some landlords did let their properties run down, where if they’d had regular maintenance in place, it wouldn’t have gotten to that point,” says Constance Stancil, director of Durham’s Neighborhood Improvement Services.
As the neighborhood became poorer, crime crept in and flourished.
“This was the wild, wild west—a jungle,” says Dotti Malone, who lives on Gray Street and grew up in the community.
Her neighbor across the street, David Downey, agrees. “It was pure hell. A lot of shooting,” he says. “People would be setting out right there on the curb selling drugs.”
NIS wasn’t created until 2006; by that time, the housing stock was in terrible condition. Even just four or five years ago, Stancil remembers, “there were over five hundred vacant or boarded-up properties in downtown neighborhoods.”
But then things finally began to change. The city launched an initiative in Southside, helping to fund new housing there, and the investment lured market-rate builders to the neighborhood. Meanwhile, downtown Durham was blossoming, and developers began eyeing the nearby East End.
“It’s kind of an investor’s dream,” says Selina Mack, director of the Durham Community Land Trustees. “It still has a great deal of housing stock available at a reasonable price. Or at least it did until recently.”
Indeed, landlords have woken up to the neighborhood’s potential, sensing that this might finally be their chance to cash out. John Little bought three properties—including the house with the purple door—from a Durham native who owned roughly forty units. He’s been offered properties by several other landlords in the area, and prices are starting to climb.
It’s all happened so fast that the city has barely had a chance to swivel away from its prior focus of bettering the area.
“There’s been all kinds of interventions to improve the neighborhood over the years,” says Peter Skillern, director of Durham’s Reinvestment Partners, a nonprofit that advocates for economic justice and prosperity. “Now it’s the exact opposite.”
The city now has to figure out how to help the low-income residents who are suddenly being displaced.
In East End, longtime residents have a range of reactions.
Homeowners seem keenly aware of the changes. “Everyone who grew up here is gone,” says Lateef Stokes, who lives on Elizabeth Street in a house his grandfather bought decades ago. “A lot of people didn’t own [their homes]. Or the bank took their house, or they got bought out. If you live here on a fixed income, how can you afford it when the taxes increase? And they are increasing.”
The property taxes on his own house jumped by almost 25 percent between 2015 and 2016, from $1,600 to almost $2,000; other properties in the area have seen increases of close to 50 percent during that time. Those amounts are based on the homes’ rising appraised values, which are likely to continue to go up in the coming years as the neighborhood changes.
A few blocks north, on Dowd Street, Coy Saunders has been using materials he finds at demolition sites to improve his own house. Still, he’s upset about the area’s rebuilding and says others are as well.
“You know they’re angry. The houses they tear down, many were duplexes—somewhat affordable. Now they’re putting back single-family homes,” Saunders says. The city could’ve done more to help. “They could’ve improved the housing. Gave out grants. Helped older people refinance.”
But many renters—arguably the hardest hit by the neighborhood’s changes—seem unconcerned.
“I’m not worried,” says Ricardo Morales, who lives at the corner of Gray and Gurley Streets with his wife and four kids. “There are other places.” He admits, though, that it might be tough to find a house as cheap as this one, a four-bedroom that goes for $650 a month.
And Walter Parker and Lisa Miles, who rent a gray and turquoise cinderblock house on Dowd Street, say they’re not anxious, either. “Our rent man said he won’t sell,” says Miles.
Actually, their landlord sold the house two years ago—to an investor for $175,000. Miles and Parker’s days in that home are likely numbered.
Driving around the neighborhood with John Little is an education.
“Check that out,” he says from behind the wheel of his truck, pointing to the foundation of an old house on Dowd Street. “That’s pillar construction. The water runs right under the house. It soaks the soil, then the ground compacts when it dries, and it pulls the house down with it.”
He gestures at the cracks in the foundation that have resulted, and the line of condensation that indicates a damp crawl space.
Nearby is a newly renovated home. “That’s a jack-leg job,” he says. “I wouldn’t have done a fifteen-year shingle roof like that; that’s the cheapest shingle you could possibly get.”
Little is as good as a housing inspector at determining the state of a structure. His living depends on his ability to assess whether a house is worth buying and renovating, or whether he should tear it down and rebuild. Like a lot of solo builders, Little is something of a cowboy: personable, confident, opinionated—“a redneck with a brain,” by his own account.
“I have no life. This is what I do,” he says. “I ride the neighborhood every day. I have to know what’s going on.”
These days, Little—who was recently caught up in a controversy about a local horseshoe pit—is one of many builders in the neighborhood. Others include Mike Foley and his realtor wife; Transition Renovations; Pegasus Land Company, which recently replaced an exceedingly modest house on Gray Street with a pair of townhouses priced at $400,000 each; Sandi Spier, one of a few woman developers working in the area; and the biggest one, Thayer Homes, which has dozens of houses under development in East End and Southside.
But Little is still doing quite well for himself. At the beginning of 2017, he bought a vacant piece of land at the corner of Dowd and Gearwood for $80,000, built a three-bedroom house on it, and sold it this past summer for $430,000. Even given the rising cost of construction materials—prices went up significantly last year—that’s a handy profit.
But price isn’t everything. Little says he’d like to keep his prices lower, to remain within what he calls “the target range of the millennial” (roughly $350,000 by his count). And he’d rather save an old house when he can. But the profit margin on a renovated old house is much slimmer than that for new construction, simply because the home can’t be marketed as “new.”
Plus, he says, many of the houses are simply in really bad condition. He drives around to make his argument, pointing out homes with off-kilter load-bearing walls, signs of black mold, and vinyl siding concealing asbestos panels. His argument is that most of the area’s homes were allowed to deteriorate over time, to the point where they can’t be considered safe housing for anyone.
Stancil, the NIS director, disputes that so many of the neighborhood’s homes need to be torn down. “It’s not the case that the houses were in terrible condition,” she says.
But Terry Thayer, who runs Thayer Homes with his wife, Kristi, agrees with Little. His company has built twenty homes in Southside and is now active in East End. He tried a few renovations, but they weren’t worth the effort. All the homes he purchased were rentals, he says—“I don’t think I’ve bought from one owner-occupier”—and they were in abysmal condition.
“We were seeing a lot of termite damage, foundation damage—a lot of these houses, we’d find nothing but raw sewage under the house, because the sewer lines had rotted out and were dumping into the crawl space,” he says. He now does only new construction.
Thayer admits his homes and their new inhabitants have changed the communities, but is that a bad thing? He’s helped homeowners increase the value of their homes and has improved the neighborhood. Like East End, Southside was another notorious crime spot.
Sure, residents have been displaced, but the houses weren’t fit for human habitation, he says. And both Thayer and Little swear that most of the renters who lost their homes simply moved a few streets over.
Thayer says he didn’t expect the market in the two neighborhoods to take off like it has, but demand is now driving his business.
“The buyers are demanding a high-quality product,” he says. “Our product went from hardwoods on the first floor and carpets upstairs, to hardwoods throughout, high energy-efficient homes, digital-audio systems throughout the house that you can run off your smart device. We’re just listening to our buyers.”
And in East End, he says, buyers “want bigger and more expensive homes.” His company is building a house on Elizabeth Street that will be twenty-eight hundred square feet, “super high-end,” with a price tag in the $600,000s. A nearby house recently sold for $550,000, with several offers before construction was finished. An under-construction house on Mallard Street will come with an elevator to access its three stories.
Indeed, the median listing price in that zip code has more than doubled in three years, according to Realtor.com.
Who are these buyers?
“Ninety percent are techies,” says Thayer. “Seventy percent work from home. One hundred percent are millennials.”
The housing market, Thayer admits, “has gotten absolutely out of control.” He’d actually like to drop his prices, but land costs throughout East End have gone way up; the going rate for a plot that might be a sixth of an acre is now $100,000 or more, compared to less than half that a couple of years ago.
In essence, Thayer and Little have become victims of their own success.
Little thinks city officials are happy about East End’s transformation, despite the ongoing gentrification, even if they’re loath to say so.
“Secretly, the [city] council and everyone wants it to get improved, they just don’t want to get the blame,” he says, mentioning appreciative comments he’s received from local police.
But Durham policymakers say that’s not the case. Rather, the question of how to revitalize a neighborhood—or a city—without the displacement of people or destruction of houses is simply a quandary no one has figured out.
“The market forces are real,” says Mayor Steve Schewel. “We’re not going to beat the market forces, but we can make a difference.”
Schewel cites the city’s focus on creating new affordable housing—a central plank of his mayoral campaign—and also lists efforts to stabilize existing neighborhoods. In particular, he mentions a new program, enacted a few months ago, that provides property tax relief in certain gentrifying Durham neighborhoods, including both East End and Southside, and another that will help low-income homeowners repair their homes at a low cost.
That could help lessen the displacement of low-income people. But Cathleen Turner, director of Preservation NC’s Durham office, thinks more could be done to reduce the number of houses that are torn down—and that could help stabilize the neighborhood.
“More diverse housing stock allows for a more diverse population living there,” she says.
Earlier this decade, Turner explains, Preservation NC renovated blighted homes in East Durham that seemed to be in terrible shape but were in fact quite fixable—and wound up highly sought after by homebuyers.
“The houses should be examined on a case-by-case basis. Just because it’s built in the twenties or thirties doesn’t mean it’s substandard,” she says.
Of course, those East Durham homes lay in a national historic district, which means there was a federal tax incentive to renovate them. East End has no such designation, nor does Southside. If the city or community organizations worked to get the areas listed as historic, there’d be a profit motive to fix them up rather than demolish them. And that’s the kind of thing builders like Little and Thayer pay attention to.
After all, says Turner, what’s at stake is no less than the flavor and future of Durham.
“A great deal of Durham’s current success and attractiveness is its community character, its architecture and history and people,” she says. “You start slashing and burning, where does it lead? It’s a delicate balancing act.”
Follow Amanda Abrams on Twitter @mandaabrams. Comment on this story at backtalk@indyweek.com.
