WILMINGTON — The process of gentrification is often a double-edged sword. On one hand, the process helps real estate values and brings more money into local economies; on the other, it can have devastating effects on the most financially vulnerable residents in a city.
Wilmington is no stranger to the process as more new residents flock to the Port City and older and perhaps more run-down housing is replaced with newer, more costly options.
Gentrification is usually defined as the repair and replacement of homes and businesses in deteriorating urban areas, accompanied — and accelerated — by the influx of middle-class or affluent residents. Gentrification is often seen in racial terms as well, with wealthier white residents displacing less affluent people of color — but that’s not always the case.
Steve Spain, executive director for Cape Fear Habitat for Humanity has seen firsthand the impacts of the gentrification of Wilmington. The organization is currently working on developing a mixed-use development off Castle Street that would provide affordable housing options.
Castle Street, for example, has seen some improvements to parts of it, while others have been left untouched. The Downtown Business Alliance advertises a roughly 3-block area of Castle Street as the Castle Street Arts and Antiques District (CAAD).
“Practically every business in CAAD, in the collective now, endeavors in one art form or another, a fact that connects the eclectic nature that separates them: the business. In keeping with tradition, CAAD in the two blocks now boasts a condominium, a theater playhouse, restaurants, antique shops, a record shop, a wine shop, a coffee shop, fine art galleries, salons and barbershops, a yoga studio, fashion boutiques, thrift shops, and a brewery/pub is set to open,” according to the DBA’s website.
But with the growth and improvements made to the area, property costs rise, and oftentimes, that displaces lower-income residents.
“The main reason that Habitat is involved in that development [Castle Place], is that I don’t want to see all the affordable housing go away. Any other way that you develop that property is just going to continue gentrification. I am hopeful that this provides a model for the rest of Castle [Street] … We don’t want to see people who have lived there for generations get priced out of that market. We are hoping that this shows a model that you can develop and gentrify, but not leave affordable housing behind,” Spain said.
He admits that in order for this project to actually become a reality it will take the City of Wilmington to donate the property, a luxury most developers won’t have. But there are still ways to prevent displacing residents while improving areas.
For Spain, one of the most effective ways the government could help provide affordable housing is to improve the current Housing Choice voucher program — most people know this as Section 8 housing. Essentially, those who receive this benefit pay 30% of their income towards housing and the voucher will cover the rest.
Of course, this would require a higher level of involvement from the state and federal government, so not really a feasible option for local governments.
Another possible solution, especially for Wilmington, is the use of accessory dwelling units or ADUs. These are what people often refer to as ‘mother in law suites’ or carriage houses — essentially — these are just additional buildings on properties that can be used as affordable housing.
As the city becomes more developed and land values increase, the cost to maintain homes has gone up as well — from the cost of property taxes to simple home maintenance. For individuals, especially retired residents living on a fixed income, affording these repairs and taxes can be enough to drive them out of their homes.
“I think there is an opportunity to keep people in their homes by working with them to develop accessory dwelling units on their property that they would then rent out as affordable — thereby giving them the income needed to keep their house,” Spain said.
There has been talk of loosening regulations for ADUs but there has been resistance to the idea as well. One of the common arguments is that people would use ADUs for short-term rentals and further drive up the costs of affordable housing.
For Spain, the answer is simple — don’t allow ADUs to be used for short-term rentals.
Not every house will have (or want) to build an accessory dwelling unit, and if the city were to approve fewer restrictions on ADUs, they could also place conditions on them to eliminate the short-term rental debate. It’s also worth noting that the city recently passed its own zoning regulations that severely restrict short-term rentals — so the point could be moot (or at least much less impactful).
Another option that has been discussed by the City of Wilmington, as well as local advocates for affordable housing, is the implementation of an affordable housing trust fund.
The idea was first suggested by Tribute Companies when seeking approval for the new Aborteum projects located off Military Cutoff Road. The developer first offered to include a number of affordable housing units in the new apartment complex, but it later was suggested they could simply make a donation in lieu of including affordable units. This money could then, in theory, be placed into an affordable housing trust fund which could go to a number of different things.
The city has considered this option and appears to want to move forward with the idea — especially considering leaders are looking to create a new zoning district — workforce housing mixed-use that would allow developers to pay an in-lieu fee instead of providing affordable housing.
Ultimately, the city will have to continue to work on addressing the desire for revitalization while acknowledging the possible detrimental effects on vulnerable residents at the same time. For Spain, although the current state of affordability in Wilmington is a growing concern, he believes the city and county are in the best place they have been to do something significant.
With elected leaders acknowledging the problems and looking for creative solutions to the affordable housing crisis, not only facing Wilmington but the country as a whole, Spain is hopeful.