Hot housing market, increasing taxes push out some southeast Raleigh residents

“This neighborhood was considered the Black middle class,” said Cheryl Harris, who grew up in the city’s Battery Heights section and is now renovating the home her grandfather built at East Hargett and Bart streets.

She recalls a Black community of teachers, government workers, and craftsmen, and she wants to preserve her family legacy. “My grandchildren are the fifth generation in this house,” Harris said.

Still, she watches as the dominoes of the past fall all around her with dozens of homes bought, sold, renovated or newly built. Her 97-year-old house, which is assessed at about $264,000, is surrounded by homes selling for more than half a million dollars. Last month, a modernist home sold a few blocks away for $730,000.

“The old families, they’ve died out, and the next generation have sold the property,” she said. “The developers are coming in and tearing down all the history in this neighborhood.”

She welcomes her new neighbors in the bigger homes, adding “they’re all white.”

In recent decades, central Raleigh has matured from a sleepy government center to a place with tech and finance companies and a pulse after 5 p.m. As a result, more people have moved to the city center and the surrounding neighborhoods. That’s changing the personality of sections such as Battery Heights. Rising home prices are making it harder for longtime residents to stay and the prospect of increased taxes threaten to push out more of them, leaving those who remain with a lost sense of community.

J’Von Rourk also grew up in Battery Heights and has watched the close-knit community of his childhood change as new families have moved in. “You wave at people as they walk the dogs as they go down the street, but you don’t really know everybody,” he said.

He gets offers weekly to buy his family’s home off East Hargett Street. His answer: “This is my neighborhood and we’re not going anywhere.”

Selling his home could bring in quite a bit of money – more now than ten years ago. The homes in the 27601 zip code – which includes central downtown Raleigh and stretches about a dozen blocks to the east – are going for about 150% more than they were a decade ago. Much of that increase is likely related to new luxury condos in the city center. But the increases are spreading east, where older homes are being renovated or rebuilt.

Like Harris, Rourk, who is Black, says the overwhelming majority of new home buyers are white.

“Good people are good people,” Rourk said. “Their skin color doesn't bother me as much as I think the neighborhood has transitioned from a blue collar neighborhood to a neighborhood that most blue collar people can't afford.”

The increase in housing prices is one of the ramifications of gentrification, which is when a higher income group moves into the lower income area. That can potentially alter the cultural and financial landscape of the original neighborhood.

The median household income in the 27601 zip code jumped 193% between the 2010 and 2020 censuses. Once close to $20,000 annually, families in that area of the city now have an average income of about $58,000 a year.

Around 2010, only 3% of the people in that zip code had a household income of $100,000 to $149,999 and only 1.3% were making $200,000 or more. Fast forward to 2020 and 13.7% of residents are in the $100,000 to $149,999 range. Ten percent make $200,000 or more.

As incomes have soared, the demographics in the neighborhood have changed, too. In 2000, four out of five residents in the area were Black. By 2010, about two-thirds of residents were Black. In 2020, it was down to two out of every five.

While 47% of people living in the zip code now are white, the area is seeing other ethnic and racial minority groups come there, too.

Mitchell Silver, a former Raleigh planning director, says the community’s close proximity to the growing downtown and the amped-up market forces are driving the change.

“This is happening everywhere,” Silver said. “I don’t know how you prevent it. It’s very hard to control private-to-private transactions. Everyone has a price.”

In locations like Southeast Raleigh, the new neighbors and intense demand for homes have helped drive up the cost for everyone, including longtime residents.

“Taxes are skyrocketing,” Harris, the multi-generational homeowner, told WRAL Investigates. “Property taxes here have become cost prohibitive.”

Wake County property taxes are based on the assessed value of a home. As an area becomes more attractive and the market heats up, the valuation can quickly change.

“Sometimes with concentrated poverty comes an air of violence, and we have gentrifiers come in and they complain and call the police,” he said. “They come to the communities because it's affordable and immediately complain about the community they moved in knowing very well where they're moving to. They are disrupting the community on both sides, and there’s over-policing.”

The proximity to downtown shops and restaurants lured Reggie Jackson to the Cotton Place community in 2018, one block east of New Bern Avenue. Another perk: a house with a yard where he built a pool and a hot tub in the back.

The newly built home replaced an older one on the street. While he didn’t buy and tear it down himself, but he is the first to live in it. “Oh, I love it here,” Jackson said.

He grew up in a different part of the city and says he’s glad to be living downtown in this house. With its location and amenities, it’s exactly what he wanted in a home. He says space and location prompted him to buy here, not any desire to be a part of a race or income shift.

“I don't think I'm part of a problem because living on this street is not a problem,” said Jackson about gentrification.

When communities experience a change in median income and an influx in affluent white people, new capital can be introduced which, in turn, results in a broader base and thus leads to racial integration, according to William Munn, a senior policy analyst at the North Carolina Justice Center.

Neighbors WRAL Investigates spoke to didn’t express animosity toward those moving into the community.

“I have wonderful neighbors, wonderful new neighbors,” Harris said. She and many others welcome conversations about property tax stabilization, especially for fixed income residents who’ve lived here for decades.

Harris sees the complexion of her neighborhood change with every home sale.

“Change is inevitable, and you can’t stop it,” she said. “So it’s up to you how you embrace it.”

We decided to work on this project jointly because of the importance of the subject and the need for special attention to the matter. Reporters from both media outlets conducted their own research and reporting before comparing notes to evaluate and review the findings.

Housing affordability is a long-term problem for the Triangle, and we will continue to explore this issue through the lens of residents, developers, government policies and economic impact on our communities.

The voices of some residents in one of the most-affected communities near downtown Raleigh offer an early look at things to come across our communities.

In the coming months, WRAL and TBJ will look at other issues of importance to our communities, and evaluate if there's a need to partner together to reach a broader group of people in our communities.