New report details racial inequality, poverty and gentrification in Durham

[Editor’s note: “Racial Inequality, Poverty and Gentrification in Durham, North Carolina” is the latest special report from researchers Allison De Marco and Heather Hunt at the North Carolina Poverty Research Fund. This is the fourth in a series that has included place-based studies of modern-day poverty in Wilkes County and the cities of Charlotte and Goldsboro. The following excerpt (with footnotes omitted) is taken from the report’s opening pages.]   

From infant mortality to life expectancy, race predicts outcomes in the United States. Racial inequities, created and sustained through the policies and practices of governments and other institutions, have long-lasting and cumulative impact. In Durham, North Carolina, the revitalization and subsequent gentrification of its downtown has brought these racial fault lines to the surface. A medium-sized city in the American South, Durham is experiencing rapid growth. However, the lingering effects of historically-rooted and systemic racism continue to shape the city today.

Once a tobacco and textiles center, Durham successfully pursued a 21st century knowledge-based economic model. The recent revitalization of the Durham city center, the result of significant planning, advocacy and investment, has transformed the downtown, and Durham overall, into a desirable destination. However, as affluent newcomers move in, and as jobs become increasingly stratified by education and income, rising prices and social dislocation are pushing out the original residents, who are often poor or working class and black.

Gentrification in Durham has been extensively covered of late, in both local and national media. In this report, we take a deeper look at the long reach of historical policies and how they continue to replicate racial inequities, despite abundant economic growth. Specifically, we examine some of the poorest census tracts in Durham—tracts that were ground zero for redlining and urban renewal—and explore the changes brought by the downtown renaissance.

Durham Poverty in Brief

Durham is growing rapidly. Between 2010 and 2016, population in the county grew 14% to 306,212. By 2030, that number is predicted to reach 366,803. Most people in the county reside in the city of Durham, home to an estimated 10,000 new inhabitants a year. The city, like the county, is majority non-white. The proportion of African Americans and non-Hispanic whites is roughly even (39% and 38%), with Hispanic and Asian residents making up the next largest racial/ethnic groups (14% and 5%).

Although the city is thriving economically, its poverty and child poverty rates, at 18.5% and 27% respectively, are higher than state and national numbers. The poverty rate differs widely by race/ethnicity, with non-Hispanic whites experiencing poverty at much lower rates than other groups (Figure 1).

A quick look at median household income by race/ethnicity reveals the same variation. As Figure 2 shows, white residents in both the county and the city out-earn their counterparts in the state overall. They also make far more than other racial and ethnic groups in the city.

Disparities in financial wellbeing persist when looking at asset poverty and access to traditional banking systems (Figure 3). Black and Latino households are more than twice as likely to be liquid asset poor as whites: 54.1% and 65.2% to 24.1%. Almost half of African American and Hispanic households are unbanked or underbanked, compared to 16% of whites. Lastly, almost a third of African American and Hispanic households have zero or negative net worth, compared to 14% of white households.

In the city of Durham, white residents are more likely to own their own home, another measure of wealth, than residents of other races or ethnicity (Figure 4). Additionally, the median home value for Asian and white homeowners in Durham is substantially higher than for black and Hispanic homeowners (Figure 5). At the median, white and Asian home values in the city are 39% and 60% greater, respectively, than the median black home value. The gap in median home value for Hispanic homeowners is even greater.

Durham faces a citywide housing shortage. The average time a house spent on the market in May 2018 was a mere 14 days. Builders report that they are struggling to keep up with demand.10 While housing is at a premium near downtown, the availability of residential property throughout the city is extremely low. In 2016, the homeowner vacancy rate was a disappearingly small 0.1% (Figure 6).

Housing costs have risen in response to demand. Census Bureau estimates show that median gross rent rose by 13% between 2011 and 2016. More up-to-date sources of rental data report that the average rent in Durham increased 36.4% between Feb. 2011 and Feb. 2017. Median home sale prices in the county rose 15.7% between April 2017 and April 2018.

The housing shortage is especially acute for low-income households. The Urban Institute has determined that only 34 affordable units exist in Durham County for every 100 extremely low-income households (those at 30% or less of the area median income), 20 of which are units run or subsidized by the U.S. Department of Housing and Urban Development. Compounding the problem, the existing affordable housing stock may dwindle in the coming years. Over 1,200 units, mostly for-profit, tax credit properties, are scheduled to lose affordability requirements between 2016 and 2021 (the majority in the first two years).

Renters face the most severe housing cost burdens. At the median, renter households make about $46,000 less than homeowners ($34,613 to $81,289) and are much more financially constrained. Almost half of renters in the city are rent-burdened. Twenty-two percent of renters, or over 12,000 households, pay more than half of their income on rent and utilities alone. It should be noted however that high housing costs take a toll on a substantial number of homeowners too. Over one in five homeowners with a mortgage, or almost 8,000 households, spend 30% or more of household income on housing.

Click here to read the full report.