Racial Inequality, Gentrification, and Poverty: The History and Context of Durham’s Affordability Crisis

On any given night in Durham, young people mill about on Rigsbee Avenue, ducking into the bars and restaurants that have cropped up there. Liberty Warehouse, an upscale condominium complex that once was a tobacco auction warehouse, looms farther up the street. The transformation of this street is emblematic of Durham’s transition from a working-class tobacco town to a hip city known for its food scene. But along with the economic revitalization of downtown has come an increase in rents and housing prices in nearby neighborhoods, pushing longtime black residents out.

A recent study from the North Carolina Poverty Research Fund identified three downtown neighborhoods – East Durham, Old North Durham and Southside – as particularly susceptible to gentrification, a term describing the influx of higher income residents into underinvested and predominantly poor communities. According to this study, median housing prices in the downtown area have nearly doubled, from $180,000 in 2012 to $350,000 in 2016. The location, affordability and diversity make these neighborhoods appealing to home buyers, while poverty and high rents make them prone to gentrification. Many neighborhoods that were home to long-time black residents are now seeing a demographic shift; the study found that the majority of home loan applicants in 2016 were white.

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The transitional nature of gentrification. Source: North Carolina Poverty Research Fund

As one interviewee in the study put it, “Yuppies are living next to low-income families. They have fixed up a house to be worth $300,000 right next to a house worth $20,000. Buyers are also squatting on houses—buying them up and then sitting on them until the black folks leave.”

To understand how and why gentrification is happening, the authors of the study, Heather Hunt and Allison De Marco, looked to the past at the effects of redlining and urban renewal. In the 1930s, the Home Owner’s Loan Corporation evaluated the creditworthiness of neighborhoods using race as one of the criteria. Thus, neighborhoods that were majority black or poor were graded red and consider “hazardous” for lending. This practice prevented many African American residents from borrowing money and becoming homeowners, which meant they were unable to build wealth and establish financial security. Red-lined neighborhoods were systematically disinvested, receiving fewer services and resources than wealthier, white neighborhoods.

In spite of redlining, the African American community in Durham thrived in neighborhoods like Hayti and the West End. Earning the moniker “Capital of the Black Middle Class,” Durham was nationally recognized for its black businesses, particularly the North Carolina Mutual Insurance Company. However, by the 1950s, Hayti and other African American neighborhoods became targets for urban renewal, part of a federally subsidized program to clear areas designated as “slums,” which in practice meant neighborhoods that were majority black. According to the study, more than 4,000 households and 500 businesses were forced to relocate to make way for Highway 147, and promises made to restore the community went largely unfulfilled.

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White flight and gentrification in Durham, NC, 1970-2016. Source: North Carolina Poverty Research Fund


By the 70 and 80s, downtown Durham had been largely abandoned due white flight and disinvestment, which set the stage for developers and investors to capitalize on cheap properties when the city started to turn around in 2010. The same neighborhoods that were previously subject to redlining and urban renewal are now experiencing gentrification. “The search for the next up and coming neighborhoods has pushed developers and prospective home buyers toward formerly overlooked neighborhoods bordering downtown,” the study says.

In the case of Southside, which was formerly part of the Hayti neighborhood,  gentrification was a “self-fulfilling prophesy” according to Hunt. The city invested millions to subsidize construction, renovation and purchase of homes with the intent of making them affordable to existing residents. That did not happen. Instead, median sale price rose from $20,000 in 2012 to $216,000 in 2016, with private market construction homes selling for $450,000 or more. As the study puts it, “the revitalization and subsequent gentrification shows how tricky it can be to break the bonds of history and race.”

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Soaring housing prices and demand in Durham, NC from 2012-2016. Source: North Carolina Poverty Research Fund

Growing by an estimated 10,000 new inhabitants each year, Durham faces soaring demand and a limited housing supply that has created an affordability crisis. Local officials are aware of the issues but unsure how to address it. Unlike other cities, Durham doesn’t have tenant protections or inclusionary zoning laws, which would require developers to dedicate a portion of new construction or rehabilitation to affordable units. Local housing organizations like Habitat for Humanity and the Durham Community Land Trust help low-income residents become homeowners but they can’t keep up with the need.

The report does not offer any policy solutions but Hunt recognizes that city officials are “wrestling with the idea that it’s hard to do economic development without exacerbating inequalities that exist in the place already. Even in a place like Durham which prides itself on diversity and inclusivity, it’s still really struggling with these issues.”

About the Author: Lucia Constantine is a second-year master’s student in the Department of City and Regional Planning. Her planning interests include immigrant integration into cities and inclusive economic development. Prior to coming to UNC, Lucia worked in higher education and nonprofits. She likes listening to podcasts, baking with alternative grains, and taking unreasonable walks.

Featured Image: A redlining map of Durham, NC, 1937. Source: Mapping Inequality