Gentrification Vampires, Beware!

Lucy Gellman PhotoJim Paley found a way to fix up rundown houses for working families and improve New Haven neighborhoods without pushing people out.

Call it anti-gentrification. Paley (pictured) has refined the model over 35 years, since he came to New Haven to lead a then-new group called Neighborhood Housing Services (NHS). NHS has become a national not-for-profit model for restoring homes and creating homeowners under Paley’s watch. And he is taking the model to the next step as parts of New Haven experience a new building boom.

NHS is celebrating its three and a half decades in business remaking stretches of Newhallville, Dwight, the Hill, and Fair Haven with an annual meeting and public party Tuesday beginning at 6 p.m. at its 333 Sherman Ave. headquarters.

“It’s a positive thing for New Haven,” Paley said of the boom that’s bringing an estimated 2,000 new upscale apartments to downtown New Haven. “I also fear it is going to create an even wider gap between the affluence in part of New Haven” and poor pockets of town. As a result, he said, “we are redoubling our commitment” to rebuild struggling neighborhoods for working families.

Paley made the remarks during the interview on WNHH radio’s “Dateline New Haven.” He recalled the lessons he and NHS learned over the years and the direction it hopes to take in the years to come.

An idealistic former Bronx public-schoolteacher and community organizer, Paley came to New Haven to start NHS, which at first gave out loans to seniors near Upper State Street so they could repair and fix their homes amid a gentrification drive that was pushing them out. Soon NHS started buying older homes and repairing them, then selling them to working-class people who would live in them.

The first experience, on Edgewood Avenue, was a flop, because NHS didn’t adequately screen the homebuyer, a drug dealer who defaulted within three months, Paley said.

NHS learned over the years not just to screen homebuyers better, but to train them—in keeping up with repairs, managing finances—so they could stay in their homes. NHS developed courses for new homebuyers. In the process, it helped working families not jsut own homes, but keep them and pass them down to their children.

Paley also mastered the task of finding government and charitable grants and tax credits. That way he could spend a lot of money to restore neglected painted-lady mansions or multi-family homes in neighborhoods like New Haven—but still afford to sell them at a price that custodians or office workers could meet. That approach differed from the usual not-for-profit approach, which was to spend as little as possible to create affordable homes that met basic codes but often didn’t last long or improve the surrounding neighborhood.

To date, NHS has done that with some 300 homes. All but three were gut-rehabs, with new windows, insulation, roofs, plumbing, floors, electrical systems, that wouldn’t need work for a decade or longer.

“Everything has been done over” to ensure families can succeed as homeowners, Paley said.

The buyers have all been working families earning 80 percent or less than the area median income.

In many cases NHS outmaneuvered out-of-town investors for those homes, investors who have been destroying neighborhoods by either sitting on rundown homes to milk them for rent, or outright stealing mortgage money on fraudulent bases. NHS also offered an alternative to the for-profit gentrification model, which raises rents and sales prices to make back not only the investments in improvements but also a profit.

Paul Bass PhotoIn recent years, NHS added new twists to the model. It began clustering its projects—buying and remodeling a group of homes on Lilac and Newhall streets, on Bassett and Winchester, by Starr Street, on Hungingon, along West Division. NHS had learned that fixing one isolated house surrounded by blight and absentee slumlords makes it harder for a new homeowner to start stabilizing an area.

And when the mortgage crisis hit, NHS created a nationally renowned center that has helped hundreds of struggling homeowners avoid losing their properties to foreclosures.

Along the way, he wondered looked at the gentrification occurring in, say, New York’s Lower East Side, where speculators pushed out poorer renters to build luxury housing. “Why isn’t that happening in Newhallville?” he wondered.

He was asked for his theories. One theory: New Haven has “dramatic dividers” between districts. He noted how Census tract 1415 covers a low-income stretch of Newhallville—right next to the city’s wealthiest stretch, census tract 1418, which covers Prospect Hill.

“You really don’t find any crossing of that barrier,” for decades running, he said.

But why do such barriers get breached in bigger cities? Paley suggested that may have to do with greater market forces at play in bigger cities like New York.

He also suggested that the families moving into NHS-renovated homes bring stability, homeowners with a stake in the neighborhood. The civic-improvement group “Newhallville Matters,” for instance, was started by NHS purchasers.

“The people who are buying our homes are working people,” Paley said. “Because they’re purchasing gut-rehab housing from us, they will have no need to move. They will not be forced to move because they cannot afford to keep up with repairs.” Plus NHS works to get buyers fixed low interest rates as well as downpayment help.

By 2013, NHS had become the go-to builder in Newhallville. When Yale abandoned a home-building project on Lilac Street after the mugging of a professor, for instance, it turned to NHS to complete the job.

In the past year, NHS has moved into a new realm: Retaining some multi-family houses it renovates and renting out the apartments. Beocming a landlord.

Why? Because an absentee-owned rundown multi-family can drag down an otherwise improving block, he said. For instance, NHS is renovating a four-family building at 111 Carmel St. with plans to rent it out because it owns two single-family houses it’s renovating across the street with intention to sell.

In renovating rentals, NHS is following the same strategy, Paley said: Screening tenants and investing extra up front to ensure long-term success. For instance, the rental buildings are getting central air conditioning, to control energy costs and avoid the need for window units. “We are hoping that house will be beautiful and we will have no trouble finding buyers for the one-family houses across the street.”

Click on the above audio file, or download it, to listen to the entire WNHH radio interview with Paley.

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posted by: Gentrification_Vampire on October 27, 2015  3:07pm

Q: “Along the way, he wondered looked at the gentrification occurring in, say, New York’s Lower East Side, where speculators pushed out poorer renters to build luxury housing. “Why isn’t that happening in Newhallville?” he wondered.”

A: We Gentrification Vampires have a herd mentality and believe there is safety in numbers, so we need a critical mass in order to support the coffee shops and yoga studios.

Oh, and we don’t like the sound of those gunshots echoing through the neighborhood from police firing range as much as the next soul.

posted by: Resident on October 27, 2015  5:14pm

FYI only a small percentage of the gunshots in that neighborhood come from the firing range.

posted by: robn on October 27, 2015  5:24pm

The sentence, “NHS also offered an alternative to the for-profit gentrification model, which raises rents and sales prices to make back investments in improvements,” has several problems.
1) The term “gentrification”, besides being subjective and unproven, is exclusive of the term “for-profit”.
2) Non-profits also have balance sheets and must, at a minimum, recoup their investment to continue to function. I think the author means “profit on” instead of “make back.”

[Ed.: Great point! Thanks. Change made in story.]

posted by: Bradley on October 27, 2015  9:43pm

NHS is doing great work in New Haven and elsewhere. But I think its impact on gentrification is more complicated than Paley describes. NHS can serve as the canary in the coal mine, signaling to other, less scrupulous property owners that they can make cosmetic improvements to their buildings and increase the rent.

Part of NHS’s goal is to increase property values in marginal neighborhoods by making substantial improvements to their properties and supporting other property owners who do likewise. This is part of the reason why banks and realtors support NHS. The improvements provide real benefits for the city as a whole. But, given stagnant incomes, the higher rents and house values associated with these improvements make them less affordable to low-income residents.

This is not a criticism of NHS. Were I in Paley’s position, I would do exactly what he is doing.  But there is no way to “turn a neighborhood around” that does not impose costs on at least some of its residents.

posted by: HewNaven on October 28, 2015  9:00am

We should erect a statue of Jim Paley on the Green! NHS is the MOST important non-profit organization in this city.