filed under Daily Dose
Kudos to Christine Dunn
2:01PM ON
07/20/2008
BY
Dave Segal
For providing this succinct and accurate account of what’s happened in Olneyville over the last decade or so. It’s still astonishing to me how many policymakers and developers simply deny the detrimental effects of gentrification.
In many respects, for instance, the historic tax credits seem to have had a positive influence on RI’s economy and on housing development — but that’s completely reconcilable with the fact that the credits also created hardship for many poorer residents in the neighborhoods in which they were most intensively leveraged:
Gentrification became a concern in Olneyville during the housing boom of 2000 to 2005, when median real estate prices doubled in Rhode Island. Olneyville, a former industrial center of Providence’s West Side, had experienced an even more dramatic price escalation.
According to an analysis by The Providence Plan, the median sales price of residential property in Olneyville climbed from around $50,000 in 1997 to $250,000 by 2005, the height of the boom. Yet in 2000, median family income in Olneyville, $19,676, was the lowest in Providence.
The hot real estate market and the lure of historic tax credits attracted developers who began to transform Olneyville’s mills into stylish condos, restaurants and office space.
Speculators made quick profits by flipping many of the neighborhood’s aging stock of multifamily houses. Some neighborhood activists feared that low-income residents would be squeezed out by rising prices.
I’ve worked with activists to push a variety of housing initiatives over the years, some successful, some not. Many people don’t realize that there’s a concerted and vicious lobby against efforts to reign in speculation and reduce housing prices — I’ll have more on that in a week or so, when campaign finance reports are due, as I’m expecting some of the most aggressive bubble inflators to work against me this fall.
July 21st, 2008 at 7:40AM
ethan Says:
While speculation and revitalization are intermingled, where is your ire towards the many unscrupulous lenders that provided easy credit and subprime loan products to people who clearly did not understand what they were getting themselves in to? As the meltdown of Freddie, Fannie, IndyMac and others clearly demonstrate, this is the heart of the problem and it is a problem of national scale, not just in Olneyville.
I think we could all get behind a plan in which City can work with folks like Frank to purchase foreclosed properties, rehab them, and provide a greater and more diverse stock of affordable units in Olneyville.
The article also makes clear that the air has come out of the bubble in Olneyville. From an average of $250,000 in 2005 to an MLS scan showing prices from $64,000 to $180,000 in 2008? Sounds like the era of speculation is over.
Let’s also clarify one thing (since the ProJo refuses to acknowledge the fact): SBER, for its part, has not developed one condominium unit in Rhode Island.
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