Dispelling the Myths of Lexington’s Gentrification Apologists

Last week, local Facebook pages were full of chatter about the latest advertisement from real estate developer Rock Daniels. The firestorm was set off by an advertisement for four apartments for rent in northeast Lexington with that distinctive ‘gentrification-chic’ aesthetic, ranging from a one bedroom apartment listed at $900/month, up to a four bedroom house listed at $1700/month. While a number of members of the North Limestone Neighborhood Association Facebook group expressed their concern that these rents are uncharacteristically high for the neighborhood, it’s important that we remember that these listings aren’t some aberration within the general trend of gentrification in the Northside and East End; they’re the rule and the reason (i.e., making money) that this process is happening.

Advertised properties for rent at (from L-R) 572 North Upper Street, 202 Engman Avenue and 527 Harry Street, all owned by Goraya One LLC located in London, Kentucky.

As we’ve noted in an earlier post, Rock’s involvement in northeast Lexington’s gentrification is extensive, but doesn’t show up in PVA records, as he doesn’t actually own any of these properties himself. But cross-referencing his current and past real estate listings with building permits from the city, we’ve identified a total of 35 properties in northeast Lexington that Rock has been involved in flipping, 24 of which have either been sold or listed for sale. Of these 24, the average property was bought for $56,258 and then sold or listed at over three times its purchase price. Some properties have been sold or listed for over six-and-a-half times what they were purchased for! But Rock isn’t the only developer reaping windfalls from this kind of activity. Nearby on Rand Avenue, a house flipped by similarly notorious gentrifier Laurella Lederer saw its sale price skyrocket by over 1,100% in just under two years. Neighbors are right to be flabbergasted at the rents being charged for these properties, but it’s important to remember that this kind of activity is actually quite widespread and largely flying under the radar, with a few notable exceptions.

But the impetus for our intervention isn’t just to remind everyone that this problem isn’t an isolated one; it’s also to provide a counterpoint to some of the specious arguments (in both fact and interpretation) of one particular realtor-qua-gentrification apologist who joined in last week’s Facebook discussion. While others have already pointed to Rock’s questionable tactics with one of the properties being advertised, we’re less concerned with how Rock went about evicting a resident of a house he was flipping and more about the broader process that he’s fueling and the shoddy rationales that are used to support it. Involuntarily displacing residents and turning a historically low-income, black neighborhood into the hottest real estate location in the city for affluent young whites is wrong regardless of how one goes about doing it. But if some Lexingtonians are going to unapologetically shill for gentrifiers, they should at least endeavor to get their facts straight and just admit that they care more about making money than anything else. We’ll consider a few different flawed arguments in turn…

“…in the neighborhood that’s about the going rate”

Perhaps the most important falsehood bandied about in the discussion around this issue is the idea that the rents being charged here are somehow normal. While comprehensive and longitudinal data on rental prices are exceedingly rare, all of the available data points to the fact that these rents are demonstrably not the going rate — that is, unless one is referring only to the specific sub-market represented by the neighborhood’s gentrifying property developers.

According to the most recent American Community Survey estimates from 2014, the median rent for Census tracts 2, 3 and 4 (what would generally be referred to as the near Northside and East End, though these statistical geographies don’t entirely match up with accepted colloquial definitions of these neighborhoods) were just $555, $663 and $481 per month, respectively (see above table for figures adjusted to 2016 dollars). Even though these figures don’t take into account the size of the apartment or number of bedrooms, the fact that one of the properties in question here is just 481 square feet suggests that the prices being asked for are anything but the norm in the neighborhood. Indeed, in tract 2, roughly 60% of all renters pay less than $750/month, while the comparable figures for tracts 3 and 4 are 52.2% and 66.4%. Even with the notable spike in median rents in tract 3 since 2000 (undoubtedly a result of this very process of gentrification), the rental prices in question are well beyond what one would call typical.

In fact, these properties are on the expensive side for Lexington as a whole. The tiny one bedroom apartment in question, rented for $900/month, well exceeds the citywide median gross rent of $766 (adjusted to $779 in 2016 dollars), a figure one would expect to be getting pulled in an upward direction by both the prevalence of larger apartments and by the fact that these neighborhoods have long had the lowest rents in the city (something we’ll get to momentarily). Looking at what the US Department of Housing and Urban Development calculates as the fair market rent for the Lexington MSA, all but the Rand Avenue property (which is owned by JETTCO LLC, while the other three properties in question are owned by Goraya One LLC) exceed these prices by roughly $300/month.

In Census tracts like these, where the median household income is between $18,950 and $25,471 — considerably lower than the citywide median of $48,667 — paying an extra $300/month in rent means putting as much as an additional 19% of your monthly income towards rent. Were someone making the median household income in Census tract 3 to try to move into the aforementioned one bedroom apartment on Harry Street (which is just on the other side of the tract boundary in Census tract 2), they would have to pay over 50% of their gross income on rent alone — well above the HUD-recommended 30% figure that qualifies someone as rent-burdened. In short, the prices being charged for these apartments are most certainly not ‘the going rate’ — they’re excessive and predatory and act as a means by which historically black neighborhoods can be further transformed into playgrounds for affluent whites.

“This neighborhood was not designed to be affordable housing”

Even accepting the argument about what currently is the case, our apologist turns to arguing that these neighborhoods were never meant for such riff-raff, anyways. While the intimation that because wealthy Lexingtonians built mansions that still line some of the streets in this part of town, the area was never meant for poor people, demonstrates, at best, half-truths or willful ignorance of Lexington’s historical urban geography.

Lexington’s early aristocracy did indeed live in what we’d now call the city’s Northside or East End — but that fact doesn’t lead to the conclusion that the area wasn’t “designed to be affordable”. The thing is, in addition to wealthy white people living in these neighborhoods, so too did pretty much everyone else. Lexington was a fairly small place up until not that long ago. Before the Jim Crow era hardened racial boundaries in Lexington and other similar southern cities, wealthy whites lived cheek-by-jowl with poor (and, for some time, enslaved) blacks. The ostentatious mansions on primary streets that our realtor friend sees as evidence that the area was — and still should be — the home of affluent white folks, existed side-by-side with smaller houses or shacks on side-alleys. There was no strict spatial segregation by race or class, at least not on the scale we now consider to be typical. And while some wealthy whites never left a few of these pockets, the growth of a free black population and the desire amongst whites to express social hierarchy through spatial segregation meant that most affluent whites moved out of these neighborhoods. But even up through the 1930s and 1940s, segregation in the Northside and East End still existed on a street-by-street basis, with all-white enclaves existing within what was an increasingly black neighborhood. So while it is accurate to point out that the Northside and East End were never exclusively the home of poor black residents, it would be entirely incorrect to fail to mention the fact that these areas were intentionally constructed as such.

Black neighborhoods in Lexington. Data on black residential areas in 1887 adapted from James Hanlon’s 2011 article “Unsightly Urban Menaces and the Rescaling of Residential Segregation in the United States”. Data on redlining adapted from 1936 HOLC map of Lexington available from the Mapping Inequality project.

The map above further evidences the substantial presence of black Lexingtonians in the neighborhood, dating as far back as 1887. While the areas represented in blue are those majority or all-black residential enclaves at the time, it’s again important to stress that these were certainly not the only places that blacks in Lexington lived at the time. Fast-forwarding to 1936, one can use so-called ‘redlining’ maps from the Home Owners’ Loan Corporation as rough proxy for those areas inhabited by blacks (and occasionally some poor whites, as well), as the presence of black residents was grounds for an area automatically receiving the lowest grade in HOLC’s residential rating system. It’s worth noting as well, though, that any part of the Northside or East End that wasn’t classified as a ‘D — Hazardous’ area by HOLC in 1936 received a ‘C — Definitely Declining’ grade, all the way up to what is now Castlewood Park. Two of the properties listed by Rock Daniels — those at 527 Harry Street and 572 North Upper Street — are both located in areas that were redlined in 1936, while the others on Rand Avenue and Engman Avenue are both in close proximity. That is, we can say that by 1936, the neighborhoods in question were home to a longstanding and ever-growing black community, while Lexington’s more affluent whites began to shift further south to the then-new Ashland Park and Chevy Chase subdivisions. Of course, it was precisely these kind of moves, and the government policies that supported them, that led to the consolidation of the Northside and East End as a predominantly low-income and black enclave.

Jumping forward again to 1970, the earliest date at which we have comprehensive Census data available, one can see that Census tracts 2, 3 and 4 have decidedly lower median rents and median household incomes, and a decidedly greater share of black residents, than the city as a whole. While some of these figures have seen alternately upward (as with income and rent) or downward (as with percent black population) trends due to gentrification and the demolition of low-income and public housing in the area, ample evidence points to the fact that regardless of whether Lexington’s earliest settlers designed the area to be affordable (again, considering that they were largely slaveholders we can probably say that they didn’t much give a shit about designing for anything but their own comfort), the Northside and East End have long been home to the city’s largest concentrations of both black residents and affordable housing.

“I’m all for affordable housing, but not when people are forced to live without basic services like indoor plumbing, as was the case a few doors down from me before Rock completed a lovely remodel of the home”

As with the attempted justification above, comments such as these are worth addressing because they attempt to provide cover for actions that are implicitly acknowledge as being unsavory. While we obviously can’t speak to the veracity of this particular anecdote, we can say that the prevalence of conditions such as those described here are fairly rare. Based on data from the 2014 American Community Survey, it’s estimated that no occupied housing units in Census tracts 2, 3 or 4 “lacked complete plumbing facilities”. Acknowledging both the fact that many slumlords in the area are prone to allow properties to fall into disrepair as well as the fact that these data are just estimates based on a limited sample, even taking the highest end of the margin of error would suggest that these conditions would only be present in roughly 11 units per tract (or about 2% of all occupied housing units).

But more importantly than whether such conditions actually exist, it’s necessary to point out that these comments are fundamentally discursive and ideological. Often unsubstantiated arguments about the unsanitary conditions of housing in Lexington’s black neighborhoods — conditions produced most often by exactly the same kind of absentee landlords that are now charging $300/month above fair market rent for these apartments, capitalizing on and further fueling the gentrification of a neighborhood they live over an hour away from — and the supposedly altruistic motives of those seeking to improve such conditions, have long been used as a justification for the displacement of poor, black households in this city. From the demolition of roughly 80 homes in Adamstown in the 1940s on the site of what is now Memorial Coliseum, to that of another 200+ dwelling units in the South Hill neighborhood for the Rupp Arena parking lot in the 1970s, to the demolition of Lexington’s public housing projects in the late 1990s and early 2000s, these kinds of justifications have long paved the way for the erasure of black neighborhoods from Lexington’s landscape. So regardless of whether one of Rock’s renovations was of an apartment with substandard facilities, this kind of rhetorical device has a long history, all of which end with the dispossession of some of Lexington’s most marginalized residents.

“…by the way, East End starts east of Elm Tree”

While we’re correcting errors of both fact and interpretation by our gentrification-enabling friend, it’s worth pointing out that, contrary to his own patronizing “well, actually…” comment, we could indeed just be referring to (most of) this area as the East End. In fact, that’s exactly what LFUCG did in its 1983 East End Neighborhood Development Plan — the document that recommended the demolition of Deweese Street in order to extend Rose Street northwards into the East End. There, the city defines the East End’s northernmost boundary as being the corner of 5th and Limestone Streets. As Katherine Jones’ 2003 dissertation on the East End also shows, residents of the East End — in all its expanded definitions — long referred to their neighborhood as such, even as the Herald-Leader and white Lexingtonians used other names to define the area. Coming into a new place and telling those that have lived there for an extended period of time that their place names are wrong isn’t just a feature of gentrification, it’s a hallmark of colonialism more generally.

“All I want is for our city’s urban core to be well cared for, attractive, and inviting for residents and visitors. I love the diversity of our neighborhood”

Isn’t this what just about everyone wants? Who could be against “well cared for, attractive and inviting” neighborhoods? The problem with this statement, however, is two-fold. First, stating a desire for Lexington’s urban core “to be well cared for, attractive and inviting”, in the absence of acknowledging that these neighborhoods were only ever made otherwise due to the deliberate actions of Lexington’s white elites and policymakers, is empty posturing. Second, even if this were an honest desire, it fails to recognize that the actions of gentrifying property developers, and the affluent individuals they cater to, are making it so that our city’s urban core is attractive and inviting to only a certain kind of resident and visitor who happens to look like — and have a similarly-sized bank account — as themselves. If “well cared for, attractive and inviting” also means highly unequal and exclusionary, then maybe we need to find some different adjectives to aspire to?

Lexington is in the midst of a considerable crisis of affordable housing. According to the Urban Institute, for every 100 extremely low-income households in Lexington, there are just 25 adequate, affordable and available housing units, and just seven such units if one takes away the prospect of federal assistance. Lexington’s supply of affordable housing has been gradually shrinking for the last decade or more, and as long as gentrification continues to run rampant in Lexington’s historically affordable neighborhoods, it’s sure to get even worse moving forward.

As long as those individuals with a vested financial interest in the continued gentrification of these neighborhoods continue to dominate the conversation around housing and neighborhood change in Lexington, the diversity that is apparently so loved is sure to disappear from such places as they become playgrounds for an increasingly affluent and white population.

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