Falling crime rate making urban neighborhoods more attractive

Published 12:15 pm Sunday, March 22, 2015

WASHINGTON — LaTasha Gunnels was outbid four times before she snagged a home in Anacostia, the southeast District of Columbia neighborhood that comes with a discount because of its reputation for drugs and crime.

The 35-year-old nurse said the area, in a section of the city across a river from Capitol Hill known for its historically high murder rates, is changing rapidly. Buyers like Gunnels, priced out of costlier spots, helped lift values 21 percent in the Anacostia area in 2014, the biggest surge of any D.C. neighborhood, according to data provider Real Estate Business Intelligence.

“I’m not going to sugarcoat it — crime is still there — but police officers are on every single corner and nobody has bothered me yet,” Gunnels said. “What I’m paying for my mortgage, people are paying for one-bedroom apartments in other parts of D.C.”

Across America, long-neglected neighborhoods known mainly for their high crime rates, from Anacostia to New York’s Bedford-Stuyvesant to South Central Los Angeles, are drawing buyers as a more than 50-year low in the U.S. murder rate opens new possibilities for singles and families who want to become homeowners.

Coupled with falling crime rates is a growing desire among young Americans to live in cities to be near jobs and nightlife. They are moving to urban areas at a higher rate than any previous generation, according to a report last year by market researcher Nielsen.

Crime in the United States continues to decline. The rate of murders and non-negligent manslaughters per 100,000 people was 4.5 in 2013, the lowest since at least 1960, according to FBI crime statistics.

“Cities are safer and the economy is valuing cities in a way they didn’t 30 or 40 years ago,” said Alan Berube, deputy director at the Brookings Metropolitan Policy Program in Washington. “Washington, D.C. was the murder capital of the country 20 years ago. Nobody calls it that anymore.”

Washington led the country in annual homicides eight times in the 1980s and 1990s, according to the Pew Research Center. Ward 8, which includes Anacostia, had among the fewest residents and led the city with 20 percent of murders most of those years. Now, as crime falls and prices soar out of reach for all but the wealthy in much of the rest of the nation’s capital, Anacostia is drawing a new wave of buyers.

The neighborhood’s transition is exemplified by the new retail and community services popping up along streets still lined with liquor stores and check-cashing spots offering payday loans. There’s Olivia’s Cupcakes, Big Chair Café Bar & Grill, urban-wear boutique District Culture and the Anacostia Art Center, where “The Vagina Monologues” was playing recently.

“Anacostia was really stigmatized during the 1980s and 1990s when D.C. was the murder capital of the country,” said Jacques Edelin, a Realtor with UrbanLand Company in Washington. “It was associated with the public housing, crime and drugs that were all concentrated there. That perception has been changing.”

Soon, an elevated bridge park similar to New York’s High Line will reconnect the communities of Capitol Hill and Anacostia. The project, a collaboration between the Washington government and nonprofit Building Bridges Across the River, will use the old bridge pillars as a foundation for a new public park with pedestrian and bike paths, fruit orchards and playgrounds.

In New York’s Brooklyn, buyers priced out of neighborhoods like Fort Greene and Prospect Heights are heading to Bedford- Stuyvesant in droves.

Elaine Bodian, 24, a barista at Daily Press, a café on Franklin Avenue, moved to the area about two years ago.

“I got priced out of Prospect Heights,” said Bodian. “The best part of Bed-Stuy is the young feeling. There are a lot of people moving in, and there’s a lot of energy.”

Prices in the neighborhood where Myrtle Avenue was once referred to as “Murder Avenue” jumped more than 44 percent last year, compared with a 2.6 percent jump in Brooklyn as a whole, according to appraiser Miller Samuel Inc. And while the precinct that includes Bed-Stuy still has one of the city’s highest rates of violent crime, murders fell to 11 in 2014 from 71 in 1990, according to New York City Police Department data.

Bed-Stuy, once synonymous with crime and racial tension, as portrayed in the 1989 Spike Lee movie “Do the Right Thing,” has undergone a transformation since 2008, said Janece McFadden, a neighborhood native who returned four months ago after living for six years in Georgia and North Carolina.

“When I came back I barely recognized the place,” said McFadden, 49, who was sitting on her stoop in the sun on Spencer Place. “There are so many new restaurants and stores and places to go out and places to shop.”

These are the signs of change: juice bars, vegan diners and soul-food eateries springing up all around Bed-Stuy; bike shops, cat-grooming parlors and organic pet-food stores joining liquor stores, tax-prep businesses and check-cashing joints.

When Margot Hughes, the owner of Installation Brooklyn, a clothing boutique on Nostrand Avenue, bought the building 11 years ago, “it was a little dicey at first,” she said. “I would sometimes hear gunshots at night, and sirens.”

Now she worries that the next generation won’t have many homeowners as prices in the neighborhood soar. She opened her store a year ago, and as she stands out front, nearly every passerby says hello. Many know her by name.

“I always felt like it was a wonderful welcoming neighborhood,” she said. “It’s a real community.”

Around Los Angeles, real estate investment is radiating into areas that made headlines for gang wars and race riots, such as the city’s South Central district.

Rudy Martinez, a real estate investor and former star on the reality TV series “Flip this House,” began focusing on buying fixer-uppers in 2013 in areas such as South Central after gentrification drove up prices in neighborhoods like Echo Park, where he bought his first home in 1993.

“I like South L.A. because it’s affordable and there’s opportunity,” Martinez, who estimates he has traded 300 homes for $100 million in his career, said as he drove his Audi Quattro down streets tagged with gang graffiti. “There’s so much opportunity if you look.”

In the neighborhood setting for such gritty films as “Boyz n the Hood,” Martinez is building a duplex with two five- bedroom units. After factoring in rent from the second unit, a family could live there for about $1,250 a month with a $500,000 mortgage at today’s low rates, he said.

A collapsed house is another future duplex Martinez said he could resell for more than $500,000 after a $250,000 investment to buy and rebuild the structure.

Median resale home prices in South Central’s 90003 ZIP code jumped 25 percent to $250,000 in the year through February, compared with a Los Angeles County-wide increase of 12.4 percent to a median of $489,000, CoreLogic DataQuick reported this week.

Police welcome investors like Martinez, who help reduce violence, gang activity and drug-related crime by bringing in homebuyers with a stake in the community, said Adam Moore, senior lead sergeant of South Central’s 77th Street Division.

“This is the busiest division in the City of L.A., with more homicides than anywhere,” said Moore, whose district had 50 murders last year, down from more than 150 in the 1990s. “We believe in crime reduction through economic development.”

Economic development goes hand-in-hand with crime reduction in Anacostia, too, where the median price for a home is still the second-lowest of any neighborhood in the city at $242,000, RBI data show. Murders are down in the area. There were 35 homicides in Ward 8 last year compared with 96 in 1991, D.C. Police Department crime statistics and government homicide reports show. The area still leads the city.

“People are moving in because they are starting to hear whispers about the uptick in the neighborhood and the potential of it,” said Charles Wilson, president of the River East Emerging Leaders and Historic Anacostia Block Association. “New and more established residents are working hard to make sure the community feels as safe as possible. Crime and the prevention of it is always a hot topic in our neighborhood.”

Young buyers in Anacostia are competing for a limited inventory of row houses and large single-family homes, many of them colorful Victorians with steep roofs, front porches, and scalloped wood shingles.

“The housing market in Anacostia was more competitive than I thought, but you get more for your money,” Gunnels said. “I love the convenience.”