In one Southern city, a twist on gentrification

When Jeff DeBellis moved into a new neo-Victorian home on the border of Raleigh's Martin-Haywood neighborhood four years ago, he knew he was signing up with a growing corps of urban pioneers edging in on some of America's toughest 'hoods.

This New York native is on the front lines of an experiment in which the city of Raleigh is buying blighted properties - sometimes by eminent domain - and turning some of its toughest blocks into places where the rich and the poor rake leaves side by side. These tidy, mixed-income neighborhoods are what some call "gentrification lite." And visionaries like Mr. DeBellis are lining up at the door, one developer says.

As the downtown housing market heats up, this city of bankers and bureaucrats is at a crossroads, pondering this question: How can social policy curb economic forces so that gentrification does not run roughshod over long-ignored corners and cul-de-sacs?

To be sure, Raleigh is in the maelstrom of a broader middle-class race to the center of town: As nearly 50,000 people U-Hauled to the city in the past five years, once-lost residential slums near downtown now brim with development possibilities.

"What Raleigh is adding to [the gentrification debate] is the opportunity the city has because it's been so aggressive in acquiring properties," says John McIlwain, senior fellow for housing at the Urban Land Institute in Washington. "It's an important twist, and it's a model for other cities."

Several, including Chicago and Chattanooga, Tenn., have pulled off similar projects by partnering with nonprofit community development boards to balance developers' intents with low-income residents' needs.

Raleigh's elected officials and urban planners, however, are etching a new middle-class vision by challenging the city to take on all the work. It has parcelled out hundreds of its lots to private developers, who are required to sell at least 70 percent of new and renovated homes to low-income families.

To encourage homeowners to make improvements, the city is also offering "forgivable" home improvement loans of up to $45,000 - as long as they stay in the house for at least 15 years.

So far, local African-Americans are receiving the lion's share of the city's aid, with nonwhites getting some 80 percent of improvement loans and renovated homes. But as whites continue moving into this area southeast of Raleigh's modest high rises, property values have increased 19 percent - more than twice the city rate in the past five years.

Five white homeowners have recently moved in next to the DeBellis residence, and Raleigh's white mayor, Charles Meeker, and his son purchased a house in Martin-Haywood that they are now remodeling.

Even so, DeBellis and his wife, Callie, stand out not only because of their skin color, but also because of their big house on a corner lot - a contrast to the rickety shotgun houses and ragged lots in the neighborhood.

Despite the differences, DeBellis says, it's the friendliest place he's ever lived, mentioning the sweet lady on the corner and the big tough guy who shuffles by with headphones, tuned to National Public Radio. He serves as chairman of a local Citizen Advisory Council, aiming to preserve the character of the neighborhood.

Relocating to marginalized downtown neighborhoods "has become a trend for young people, bohemians, empty-nesters, and even families" all over the country, says Alexander von Hoffman, author of "House by House, Block by Block: The Rebirth of America's Urban Neighborhoods" and a fellow at Harvard University's Joint Center for Housing Studies.

Some see a limit to efforts to redevelop tough neighborhoods so that middle-class, educated people want to move there. "Fears of massive urban revitalization are greatly exaggerated," says Ann Schnare, chairman of the Center for Housing Policy in Washington.

Many of Raleigh's black citizens remain critical and suspicious of the city's motives after its previous attempts to force residents to renovate their homes to meet modern building codes. Past planning efforts haven't always been favorable to African-American homeowners, residents say.

Such concerns are well-founded, experts say. "Mixed-income housing doesn't happen naturally, so it has to be part of a conscious public policy or else it will lead to something unanticipated," says Peter Dreier, urban policy expert and author of "Place Matters: Metropolitics for the 21st Century."

For instance, Jesse Sanders, an African-American octogenarian, is seizing the chance to cash in on new interest in the eight-block area by moving out of the neighborhood, he says.

But will other blacks also put their houses on the market to try to make a profit, or will they be forced out because of higher taxes?

Either way, Mr. Sanders says, change is needed to drive out drug dealers and what he calls "gang boys." DeBellis, meanwhile, is just as sure of his decision to settle on this rapidly changing street. "I haven't regretted it once," he says.