New York Housing Prices Spur Development of Poorer Areas

Housing prices in New York City have soared so high that even the poorest and most crime-ridden neighborhoods are feeling development pressure. One of those areas is Brooklyn's Bedford-Stuyvesant, a neighborhood once synonymous with urban blight.

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As the nation's housing boom continues, there are scattered signs that certain markets may be cooling. Overall, though, home prices continue to rise. The National Association of Realtors says home prices in the Northeast were up 16 percent in August compared to last year. In New York City, for instance, housing prices have reached such dizzying levels that even the poorest and most crime-ridden neighborhoods are feeling development pressure. NPR's Jim Zarroli looks at what the boom has meant to Bedford-Stuyvesant, a Brooklyn neighborhood once synonymous with urban blight.

JIM ZARROLI reporting:

On a leafy quiet street in Brooklyn's Bedford-Stuyvesant, workmen are removing the stucco from the front of a large brownstone. The building's owner, Barbara Battle(ph), wants to restore its original surface. You can see some of the Victorian-era brick work starting to poke through the building's face. A retired corrections officer, Battle says she always dreamed of living in a brownstone but couldn't afford to buy one. Then, six years ago, she found what she was looking for in Bedford-Stuyvesant's historic district.

Ms. BARBARA BATTLE (Brownstone Owner): When I moved here, people said, `Oh, you're moving to Bedford-Stuyvesant. Isn't it terrible?' I didn't find that at all. I liked it here, and the people here are very nice. You could tell it's up and coming.

ZARROLI: Since Battle moved here, there's been a steady influx of newcomers to the neighborhood. Many are middle class, but there are doctors and executives and increasingly people of other races, including a handful of whites. The influx is remarkable because for years Bed-Stuy was seen as one of New York's roughest and poorest neighborhoods. Robert Kennedy's revitalization efforts in the '60s helped turn Bed-Stuy into a national symbol of urban despair. But like a lot of low-income parts of New York, Bed-Stuy is seeing a surge of new development. Ed Lombardo is a bank executive who also teaches at New York University.

Mr. ED LOMBARDO (New York University): The South Bronx is now maturing and there's development going on there. We're seeing in Corona, Queens, all the development going on there as the surrounding areas have become extremely expensive. So this is really one example of a citywide phenomenon.

ZARROLI: Lombardo says commercial banks that once shunned neighborhoods like Brooklyn's East New York and Mott Haven in the Bronx are now eager to lend in them. One reason for the transformation is New York's falling crime rate which has made these neighborhoods seem like a safer bet than before. But Lombardo says the main reason places like Bed-Stuy are being transformed is the spill-over effect of New York's overheated housing market.

Mr. LOMBARDO: You have a significant number of young professionals. They're coming here. They see the quality of the housing stock. They see it's relatively easy to get to New York to a job, people whom want to stay in the city, and this is an area that can be afforded.

ZARROLI: As the newcomers have flowed into Bed-Stuy, new shops have begun to appear: a health food restaurant, a bookstore. Meanwhile, prices in the neighborhood have soared. Lombardo points to a single-family house in Bed-Stuy that sold for $380,000 a year ago. The owner resold it recently for $650,000 without doing any renovation. Richard Trouth is head of Neighborhood Housing Services of Bedford-Stuyvesant, a group that helps first-time home buyers. He says the boom has been both good and bad for Bed-Stuy.

Mr. RICHARD TROUTH (Neighborhood Housing Services): It brought businesses, small businesses, into the neighborhood. There's been a lot of construction, which is good. There's been a lot of open land, deserted properties that have been restored, but it's also bad for people who are low to moderate income who would like to live in the neighborhoods and they just cannot.

ZARROLI: They're people such as Neil Singleton(ph), a security guard. Singleton says his rent has risen sharply in recent years. He says he could move, but he's not sure apartments are any cheaper elsewhere in the city. And with prices so high, he has little hope of being able to buy a house. Singleton is ambivalent about what's happening in Bed-Stuy.

Mr. NEIL SINGLETON: It's good for the houses that are going up to take away some of these abandoned houses and put up new ones for people to move in. I think that's nice. But the prices they're asking for is outrageous.

ZARROLI: But many long-time residents are thrilled by what's happening. On a pleasant summer afternoon, Leonard and Delores Aires(ph) are sitting at a small table outside their house on Quincy Street watching the traffic pass. Two doors away, workmen are putting up a new house. Delores Aires, who's 64, grew up across the street. Over the years, she's watched what was once a vibrant multiethnic neighborhood get overtaken by drugs and crime. Now the Aires say the middle class is moving back in and neighbors talk to each other more.

Mrs. DELORES AIRES: Different people coming in. You have working-class people. So they're kind of bringing things up. Instead of going down, it's coming up.

Mr. LEONARD AIRES: Quality of life, you can see it change. I mean, people fixing up their homes. Forty years ago, you didn't see flowers and everything outside that you start to see now.

Mrs. AIRES: People are changing and I think we needed that change.

ZARROLI: The Aires have benefited financially from the housing boom. The house they bought for $20,000 26 years ago is now worth more than $400,000, and the value of their home could keep rising. Many people in the real estate industry expect gentrification to continue in Bed-Stuy and the nearby neighborhoods of Crown Heights and East New York, and they say that this part of Brooklyn will look sharply different in just a few years. Jim Zarroli, NPR News, New York.

MONTAGNE: This is MORNING EDITION from NPR News. I'm Renee Montagne in Washington.

STEVE INSKEEP (Host): And I'm Steve Inskeep in New Orleans.

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