If Newark Becomes Next Brooklyn, What Will Happen to Renters?

Feb 6, 2017 · by Karen Rouse

WNYC

Newark residents have been hoping for a comeback for decades - ever since the so-called rebellion of the late 1960s left parts of the city destroyed, and prompted tens of thousands of its resident to pull up roots and leave.

"My entire life, I’ve been waiting for a renaissance to come around the corner that was so difficult to show up," said Newark Mayor Ras Baraka.

Now it's starting to look possible.

Last month, Baraka announced the creation of Mulberry Commons, a 22-acre development in downtown Newark that would feature a pedestrian bridge that links the popular Ironbound neighborhood to Newark Penn Station and the central business district. The following week, the mayor announced the conversion of the long-shuttered Hahne's department store into a vibrant commercial and academic space. It will host a Whole Foods, Barnes and Noble, a Rutgers University arts incubator, and apartments. Alongside him stood Marcus Samuelsson, a celebrity chef and owner of the popular Red Rooster restaurant in Harlem.

Amid the fanfare, Baraka was quick to announce that 40 percent of the apartments in the Hahne's building would be affordable.

"We'll all be included," Baraka told the crowd that gathered at Hahnes. Newark residents, he said, would not be excluded from what he calls "a renaissance."

But the promise of an allotment of affordable housing may not be enough to protect the city's mostly working class residents against gentrification. That's because few Newark residents even own homes in the city, and home ownership has long been a way residents in revitalized cities across the country have avoided getting pushed out when property values rise, and the price of rentals skyrocket. In Newark, fewer than one in four residents own the home he or she lives in, according to the 2015 Census.

And that puts them at risk for being pushed out if Newark's revitalization goes full throttle, according to Chris Niedt, director of suburban studies at Hofstra University.

"Because the level of home ownership is so low, most of the people are affected by redevelopment are renters," he said. "We know these renters are vulnerable to displacement."

There are many reasons for such low home ownership, Niedt said. One, is redlining. In the 1950s and sixties, the federal government and lending institutions systematically denied mortgages to black people, and entire African-American communities. More recently, he said, many in Newark purchased homes using subprime mortgages they could not afford. Many are now fighting foreclosure.

Alikah Green, 26, is a lifelong resident of the city. She glows when she talks about Baraka, and the changes she has seen in the city's downtown.

"Our mayor is fixing the city of Newark," she said. Before, she said, it was "horrible ... so many people downtown, just wandering. It looked like a dump, like two, three years ago. I come downtown now, I see Whole Foods down there. I'm like 'wow, they got Chipotle, Whole Foods.'"

But Green said high-paying jobs need to be part of the equation, too. She pointed out that many of the people who work in high-paying jobs at Panasonic and Prudential in downtown Newark come in from outside the city. She said most Newarkers she knows are in lower-paying jobs that make it difficult to pay market rents, let alone own a home in their own city. Green, who works at a new technology center in the city's South Ward -- another project supported by Baraka -- that hopes to train residents. She said she hopes training will help Newarkers get better-paying jobs downtown.

City officials say the mayor is aware of the pitfalls of gentrification and he’s looking for ways to protect those born and raised in Newark.

Carmelo Garcia, Newark's chief real estate officer, said the city doesn’t want another Hoboken, Jersey City, or Brooklyn -- a city where gentrification has pushed out locals. As the city develops, Garcia said,  it is looking to  attract higher-income residents -- like New Yorkers, young professionals, and millennials -- into the downtown. But he said city officials are committed to making sure the new apartment buildings being built in the downtown include a percentage of affordable units for low-income residents in Newark.

"I would love to move in one of those apartments downtown," said Green, the South Ward resident. "The cost of rent is going to be so high, so I'm not sure."

The market-rate price of a downtown loft starts around  $2,000 per month, but the median household income in Newark is $34,000, compared to $72,000 for New Jersey.

Garcia said there are home ownership projects, too. There is talk of an eco-village, where firefighters and police could purchase homes. One attempt at increasing home ownership hit a snag. Two years ago, the city held a Valentine’s Day sale on vacant lots for $1,000 a piece. A hundred people bought, but he said only half are following through.

Niedt said the best protection for residents against displacement is for community advocates to work with the city to make sure affordable housing is made available.

That's what Drew Curtis of the Ironbound Community Corporation is working on.  He said the Ironbound, the city's most popular neighborhood, is already gentrifying. Young professionals are attracted to the bustling neighborhood's restaurants and cafes that serve a large Brazilian and Portuguese population.  But he said there is also a large low-income and undocumented population who are seeing rents go up as landlords try to capitalize.

More than a thousand housing units have been approved at the planning and zoning boards since 2015 Curtis said, but only a handful are affordable.

Curtis said it raises questions about who the development is for in the city. The ICC has tried to stave off gentrification by supporting rent control laws, and it is pushing for an ordinance that would require all large developments to provide 20 percent affordable units. He said Baraka has been receptive and is working with the neighborhood to provide affordable rentals.

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