Tales of Three Cities

The poster child for gentrification in the eastern U.S. is Hoboken, NJ. A 15-minute subway ride from midtown Manhattan, for decades it was a resolutely blue-collar town with affordable apartments and modest homes for the working class. Then someone noticed. Hoboken became the place to live—if you could afford it.

Hoboken’s story seems straightforward enough—greedy developers forcing out low-income residents to make way for affluent commuters—but the reality of gentrification, and its place in the spectrum of neighborhood change, is much more complicated.

In a popular gentrifying neighborhood, housing advocates struggle to prevent the displacement of poor families by rising rents, to retain some of the distinctive culture of the area and to get the developers flooding into town to share the wealth. But in other neighborhoods, ones that have long suffered abandonment and disinvestment, getting a major developer to consider them at all is a major triumph. Repairing abandoned homes and securing access to capital are the primary concerns.

Often it’s hard to imagine that one of these scenarios could turn into the other. But just as today’s ghettos were often once full of classy addresses, today’s gentrifying neighborhoods are often places that only a few years ago were in desperate need of revitalization. Without some careful long-term planning, city governments and local community development corporations that have been working hard to attract investment can turn around and find the very people they were trying to help priced out of the area. The experiences and views of housing advocates and community developers in Hoboken and two other New Jersey cities show just how tricky such planning can be.

Hoboken
In the 1970s, Hoboken was a working-class, multiracial, waterfront city. It was small – only one square mile – and gritty. Its housing was old and a little shabby, but much of it was historic. A brownstone revival was beginning, and for-profit developers, using state funds for affordable housing, were renovating tenement buildings for affordable housing. “If you’d stopped then and there, you would have had a revitalized town with a minimum amount of damage,” says Joe DellaFave, a long-time Hoboken resident, tenant activist and city council member from 1985 to 1991.

But once revitalization made Hoboken a “desirable” place to live, market forces exploded. Around 1980, there was a rash of suspected arson-for-profit fires, and tenements began to be converted to condominiums at a breath-taking rate. As the boom continued, the fires abated as developers discovered they could buy out existing tenants instead.

Meanwhile, even as developers were streaming in, the city continued to do things to lure them. “Many people believe that the ties between the investor community and city hall were tight,” says DellaFave, expressing a sentiment echoed by many of his colleagues. “The message was, ‘We’re going to let the market take its course.’” Tax-abatement programs continued after developers clearly needed no incentive to build in Hoboken, and enforcement of tenant protections and rent control was notoriously lax. “There was a sense given,” says DellaFave, “that the people who were initially being displaced were expendable.”

As displacement began to affect an ever-widening range of people, a reform mayor and some activist council members were elected in 1985. They were able to make some changes, like an anti-warehousing ordinance that prevented landlords from holding apartments vacant for longer than 60 days. But a city council still controlled by developer interests stymied most attempts at serious reform.

Hoboken has become famous. The story of its transformation encompasses all of the worst of what is often meant by the vague term “gentrification”: eviction and displacement of poor residents, complete loss of affordable housing stock, racial tension between older residents and newcomers and skyrocketing rents for all. A movie, “Delivered Vacant,” and a book, Yuppies Invade My House at Dinner Time, have chronicled the process. “The whole transformation from a working-class town to a gentrified town was accompanied by tremendous pain and injustice,” says DellaFave.

Today, Hoboken’s prices are comparable to the outer boroughs of New York City. “With the exception of Section 8 and public housing, there’s nothing affordable,” says Carla Lerman, director of Episcopal Community Development, a technical assistance provider and developer of last resort in the Greater Newark Episcopal diocese. “People live in fear,” says Hoboken resident and good-government activist Helen Hirsch. “They are afraid of losing their apartments, afraid of losing their jobs.”

Although many working-class homeowners were able to use their suddenly valuable homes as retirement packages, the few long-time, low-income residents who have been able to stay haven’t had it easy. “Revitalization certainly made the town prettier, more attractive, did a lot of good things for a lot of people,” says DellaFave, “but the basic services to poor people didn’t improve.” Perhaps most importantly, incoming residents either don’t have children or put them in private schools, so their presence hasn’t created much improvement in the school system.

Now, the affordability restrictions on the state-funded affordable housing developments from the 1970s are running out—and the developers want to cash in on the option to go market rate, in some cases trying to winnow out of rent control in the process.

Hoboken—tiny, built-out and perfectly located—is seen by many as an extreme. But as such it is a reminder that even the most extreme cases are hard to predict ahead of time. Very few people were worried about displacement when the revitalization in Hoboken began. “This whole thing started before we knew anything about it, before we were paying attention,” says DellaFave. “The only people who had it on their radar were a few Puerto Rican tenant activists. Things were gray as to what was revitalization and what was housing injustice. Once it got under way I think it was mostly seen as revitalization.”

Newark

A round blue and orange sign on an urban street corner with a train on it reads "Welcome to the Ironbound"
A sign marking Newark’s Ironbound neighborhood.

Newark and gentrification don’t often get mentioned in the same sentence, unless it’s to say, “Newark, for example, could use some gentrification.” Newark, until recently the largest city in New Jersey, is best known for the devastation its neighborhoods suffered during rioting in 1967 and the drastic population losses that followed.

Things have picked up recently in Newark. “We’re getting population back,” says Ray Ocasio of the CDC La Casa de Don Pedro. There have been some high-profile projects downtown, including the New Jersey Performing Arts Center (NJPAC) and Riverfront Stadium, and the slow but steady work of a cadre of nonprofits in the neighborhoods is bearing some fruit. Now rather than trying to stem flight, the CDCs are focusing on creating mixed-income communities and adding some middle-income and market-rate housing. “We want mixed-income areas, and we are encouraging CDCs, when appropriate, to do more unsubsidized or market-rate units,” says Gerard Joab of the Newark office of the Local Initiatives Support Corporation.

Everyone in Newark knows about the fate of neighboring Hoboken. But their situation seems entirely different. First of all, they have room to welcome a lot of newcomers before space gets tight. Blocks of the Central Ward are still completely empty. “I’m sure we get some economic refugees [from New York],” says Ocasio. “But why not? Newark has been downsized. We know we can support more people.”

Second, Newark has a base of nonprofits that are actively working toward balanced neighborhoods, committed to long-term affordability and serving the needs of the existing residents, something Hoboken didn’t have. “In Hoboken the strategy was to get as many market-rate units as possible,” says Joab. “There were no CDCs. That’s one of the benefits of Newark. We have five major CDCs and [lots of] other groups. So the environment is different. CDCs are fighting for sustainability. I don’t see New Community [Corporation] or La Casa [de Don Pedro] going anywhere. The mission will remain.”

“Our approach is already one of balance,” says Ocasio. “We’re working on a number of fronts.” For La Casa these include housing rehab, after-school care, youth leadership, naturalization and economic development. “It’s a holistic and comprehensive approach,” he says. Meanwhile, there are others building market-rate housing, but “the rate at this point is not of any great concern.” In fact, Ocasio is more concerned that the market-rate housing being built is supported by enough neighborhood improvements that that it will deliver real value to the families buying them.

Not that everything is ideal in Newark. Many areas are a long way from achieving revitalization. There are still commercial strips with hundreds of boarded-up stores, empty blocks and homes that are undesirable because of local drug traffic. There’s also tension between the efforts at downtown development and the needs of the neighborhoods. “You can’t do many more NJPACs or Society Hills [a large middle-income subdivision] and not revitalize the neighborhoods,” says DellaFave, who is also the director of Newark’s Ironbound Community Corporation. “You’re back to juxtaposing the needs of the people who live here and trying to move the city forward. There’s no real planning and management.” Others agree.

Nonetheless, some of these strategies are starting to work. And if gentrification means displacement and cultural disruption by outsiders, then Newark’s revitalization is so far showing signs of taking place without it. “The middle-income people coming into the North Ward, and pockets like Society Hill, are people with relatives in the area,” explains Joab. “Their kids’ grandparents are here, or their kids are in private school here. They are renting outside, but they have ties here. They work here, were born here.”

Newark community developers tend to be very practical when it comes to gentrification. “We think there’s value for folks who are part of Newark’s life to move here,” says Ocasio. “Clearly there’s a desire to have an influx of middle-class homeowners. To the extent that’s balanced by raising the level for everyone, that’s fine. If it’s gentrification with displacement, that’s a problem. People moving in who enrich the environment for those who were here is fine.”

Newark is clearly not in imminent danger of pricing out its lower-income residents. “[Hoboken is] being influenced by the New York City real estate market,” says Ocasio. “We’re not. We’re still serving as an entry point for new immigrants.” But Newark is, after all, one stop from Manhattan on two different commuter rail lines, or 20 minutes on the same subway that serves Hoboken. Could it ever face Hoboken’s problems?

Few are willing to rule out that possibility. “It doesn’t seem like an immediate danger now,” says Lerman. “Newark doesn’t have the housing stock that lends itself to real appeal. And people perceive that the school system in Newark is a real problem. But the same is true in Hoboken. You watch. In 10 years I’ll probably seem foolish.” Last November, the Weekend section of The New York Times ran an effusive article trumpeting Newark as up and coming. “You can see a potential down the line, along the riverfront in the underutilized factories,” says DellaFave, when pressed. “But I think that’s a few years away at least.” Joab sees less danger. “Will pressure from New York City get here? No, I don’t think it will. It’s more likely to go to [semi-urban suburban towns like] Montclair and West Orange.”

One thing all of these advocates have in common is that gentrification isn’t the prime question on their minds. Newark probably does have more pressing concerns. “We have to manage the impact of every piece of development now,” says DellaFave. “If you can’t get a grip on the present, I don’t know how you can get a grip on the future.”

New Brunswick
When people dismiss gentrification and displacement as things that only happen within a stone’s throw of Manhattan or San Jose, they forget about places like New Brunswick. A small city in central New Jersey, centered around the campus of Rutgers University, it too has a riverfront and a commuter rail line to New York City, but it’s over an hour away.

In the 1970s, New Brunswick experienced flight and disinvestment – not as dramatically as Newark, but enough that civic leaders were worried, property values were falling dramatically and the town felt its ratable base shrinking. The city, like so many at the time, fell into disrepair. The city government put its energy into a downtown revitalization project, paying far less attention to its housing stock. Unlike in Newark, however, no large nonprofit housing organizations emerged to address that side of the equation.

Some people foresaw a problem. “The crystal ball was very clear,” Roy Epps of the New Brunswick Civic League says. “My point was always that revitalization had to be broader than the central business district.” As swaths of the city were cleared for projects that included a Hyatt Hotel and the headquarters of Johnson & Johnson, the city’s housing stock continued to decay.

The dynamics of housing affordability look different in a college town. Because of the huge student population, investors can make a lot more money by renting a ramshackle building to several students than by either renting it to a single family with Section 8 housing vouchers or renovating and selling it. The prevalence of student renters allowed rents to rise for a long time without many outward signs of physical restoration that usually herald a turn-around.

The city’s revitalization started early, around the same time as Hoboken’s, says Pat Schump, director of the New Brunswick Housing Coalition, a housing counseling agency. But it moved more slowly, only really taking off in the past few years. “New Brunswick’s prices have been skyrocketing, and will go higher,” says Epps. “We haven’t built any inventory to replace what has fallen off, and we’ve never had so many people in New Brunswick. People are doubling and tripling up.” The most visible signs of the recent boom are along the waterfront, where luxury apartment towers are going up and a HOPE VI project is taking down Memorial Homes, the city’s largest public housing project. But the effects are being felt within the town as well. “Slowly but surely the low-income people have been pushed to the edges,” says Schump. Epps says people are leaving for Trenton, the state capital, or even moving down South.

Like in Hoboken, with the market already hot, groups trying to create affordable housing for families find themselves waging an uphill battle to acquire any property to work with. Cathy Mudrak of the 10-year-old all-volunteer CDC called Brunswick and Raritan says, “There’s not that much property that’s available, and often the asking prices are prohibitive. I haven’t seen low-cost [property] here in a long time.”

In an interesting twist, as you go farther from the economic “core” of a metro region, displacement also has more serious transportation consequences. Most of the towns surrounding Hoboken are well served by bus, train and a new light rail. But in the suburban/semi-rural areas surrounding New Brunswick, says Schump, it’s hard to live without a car. “In the suburban towns, you have to walk to get anywhere, and it’s too far to walk.”

New Brunswick’s newfound popularity seems to have taken even long-time housing activists by surprise. “I was surprised when the [luxury] units were built on the river. I didn’t think they would be able to rent those apartments,” says Schump. “But they did. When the tide turned, I didn’t expect it.”

Planning

Neighborhood change happens over the long term and is hard to predict. “We don’t know what’s going to be true – even in 10 years,” Lerman says. The stories of Hoboken and New Brunswick show, however, that the time to address affordability and diversity is before market forces start booming. The benefits of a mixed-income community cannot be realized unless a city has a strong commitment to retaining and serving its original residents. As DellaFave explains, “If there’s revitalization, then there needs to be a revitalization plan [that will] consider how the people who’ve been living there will fare.” CDCs that focus on this constituency, and on long-term sustainability, can play an important role in pushing to institute measures such as affordable housing trust funds, inclusionary zoning, tenant protections or at the right time. (See Beyond Gentrification.)

Even in places where it’s not clear if the market will be booming any time soon, housing and community development advocates agree that such long-term planning is key. “The ideal is a community that is a mixture of people [and] of housing types,” says Lerman. “In an atmosphere of ‘anything goes’ development that will not happen.

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