What happens to a city when long-simmering racial tensions erupt and it suddenly becomes a 2-week-long “breaking news” event on CNN—with nonstop images of burning buildings, looting, and shootings, and stomach-churning allegations of police brutality, all vividly delivered into living rooms, computers, and phones around the world?
The bigger question: Do riots destroy troubled, modern U.S. cities like Baltimore and Ferguson? Or do they save them?
Certainly the former has long been accepted as the conventional wisdom, and was one of the alarming takeaways from the civil rights era. Widespread urban race riots in the ’60s and ’70s—especially in Detroit; Newark, NJ; Cleveland; and the Watts section of Los Angles—sped up an exodus to the suburbs by those who could afford it, leaving behind a glut of shuttered properties, empty commercial areas, and depressed home prices. And those cities have never fully recovered.
That lesson was reaffirmed yet again after the devastating 1992 Los Angeles riots, when home prices downtown took a major, protracted hit.
But something different now seems to be happening in Ferguson, MO, and Baltimore, MD. The cities erupted in violent, hugely publicized protests, in 2014 and 2015, respectively—and have since seen housing prices recently increase above pre-riot levels.
Shattered storefront windows have been repaired, most businesses have reopened, and peace—however uneasy—has returned. Now, fresh private and public money is being invested in the revitalization of the struggling communities where the #BlackLivesMatter movement took hold.
It suggests a startling possibility: Did all that ugliness actually spur a recovery?
Up from the ashes
In Ferguson, a small suburb of St. Louis where the shooting death of black 18-year-old Michael Brown by a white cop in August 2014 set off rioting, home prices are now higher than they were before the unrest. The year before Brown died, 2013, the average sale price of residential, condo, co-op, and villa properties in Ferguson was $58,368, according to the website of the St. Louis Association of Realtors®. That went up to $74,156 in 2015, after the protests. Average prices have hit $108,075 so far this year.
They’re also rebounding in Baltimore, just a year after the April 2015 death of Freddie Gray, another young black man, in police custody also led to protests that turned violent, leading authorities to bring in the National Guard to restore order. The final tally of damage was about $9 million to two homes and nearly 300 businesses, according to aU.S. government survey.
This April, the median cost of a residence within the city limits hit $135,000—more than 31% higher than in April 2015, when the turbulence began and prices were at $102,750, according to data provided by the Greater Baltimore Board of Realtors. In April 2014, the median home price was $119,700.
And even more homes were sold within the city limits in the year following the riots than the year preceding them.
How can that be? Experts say there are a number of reasons for the boomerang effect. Among them: the violence, however disturbing, never turned deadly; both areas, after their publicity, saw a big spillover from strong housing markets nearby; and both saw an influx in new money invested as a result of the uprising and turmoil.
“It ends up having a better resolution than we ever could have hoped for,” says Alan Ingraham, CEO of the Greater Baltimore Board of Realtors®. “After the unrest, nobody could avoid recognizing that there are widespread problems, like unemployment, poverty, and racial disparities that affect inner-city neighborhoods.”
Home buyers are seeking bargains
Ferguson is benefiting from its proximity to St. Louis, which is just 20 minutes away, saysrealtor.com®‘s chief economist, Jonathan Smoke.
“It’s more affordable,” he says of the smaller city—a fact not lost on cash-strapped buyers. The median home price in St. Louis is $169,900, according to realtor.com.
Baltimore gets its boost from its close proximity to Washington, DC, where the median home price in April—$525,000—was nearly four times as much as in the Maryland city, according to the Greater Capital Area Association of Realtors.
Negative publicity, housing experts say, tends to have more of an influence on people who are unfamiliar with the area. Prices and sales were down in Baltimore for about five or six months after the uprisings thrust the city into the spotlight, says Baltimore real estate agent Gina Gargeu of Century 21. But buyers have short memories.
“A lot of out-of-towners and people relocating to the area shied away from downtown Baltimore and decided to move to the suburbs instead,” she says. “Now the demand’s increased.”
That may also be because the violence in Baltimore and, especially, Ferguson was relatively mild, says Robert Margo, an economics professor at Boston University.
“If a riot lasts only a day or two and no one’s killed, there’s not much looting or burning and it’s consigned to a small area, you might not see any effects on [real estate] prices,” he says.
New investment in Baltimore
Since the riots, local auctioneer Adam Shpritz of the Ashland Auction Group has seen more investors come out of the woodwork looking for vacant, dirt-cheap homes in Baltimore’s troubled Sandtown-Winchester area, where Gray was arrested. (There’s still a glut of them on the market, he says.) The interest is due, in part, to government investment in the area.
The city and state have pledged about $94 million to raze empty properties in the hardest-hit (and poorest) areas, and $600 million more in subsidies designed to spur redevelopment, according to The Baltimore Sun.
“We see a lot of excitement from investors trying to buy inventory in the area with the goal of renovating and developing to rent or resell,” Shpritz says. “Investors are following the trend [set by] the city and trying to buy while prices are still low.”
Bids for vacant, three-story, row homes selling at auction start at just $5,000, according to realtor.com.
The result has been that more of these rundown buildings are getting much-needed rehabs, which will add value to the area.
“Now that we’re a year out, we can truly say that the neighborhood is better than it was,” says Ingraham, of the Greater Baltimore Board of Realtors.
However, the recovery throughout the city has been uneven. Prices in Sandtown-Winchester initially plummeted nearly 37% after the rioting, according to data provided by Live Baltimore, a group that promotes living in the city. They fell from an average $17,600 from January through April 2014 to just $11,113 during the same time period a year later.
They have since gone back up to an average $16,500 in the first four months of this year—a more modest 6.5% dip from 2014.
“The unrest brought attention to the need to focus some reinvestment to these areas,” says Steven Gondol, executive director Live Baltimore. “The end result will be stable, thriving neighborhoods.”
But real estate agent Gargeu cautions that without an anchor such as a large commercial development, these communities won’t be able to really take off.
“It’s going to take a lot more development and developers taking [continued] interest in the area for it to actually improve,” she says.
Promising signs in Ferguson
Ferguson, with a population of just more than 21,000 people at last count, may also be on its way up.
In April, health care company Centene opened a new call center, complete with 200 new jobs with benefits—on a former blighted car lot. The city’s first Starbucks fired up its Frappuccino machine the same month.
The QuikTrip convenience store that was burned during the chaos is slated to be replaced by a jobs training and placement community center early next year by the Urban League of Metropolitan St. Louis, say organization officials.
There is also new local investment in the community. Ferguson landlord and developerMichael Palmer is putting up a new building with three commercial spaces and 23 high-end apartments across the street from the police station. Plans for the project began before Brown’s death, says Palmer, who grew up in Ferguson.
“I’m not going to let something like this stop me,” says Palmer of the strife.
But the city is still in desperate need of state and federal money to improve the commercial district that was hardest hit by the protests, says Ferguson Mayor James Knowles III. And the Target, just outside the city limits where law enforcement had once set up a command center, is slated to close this summer.
Prices in the most depressed neighborhoods, where the violence spilled over, haven’t gone down, says longtime Ferguson real estate broker David Pope. But they aren’t going up either, he says.
Knowles attributes the jump in the overall city’s real estate prices to the glut of foreclosures and short sales in Ferguson stabilizing and the properties being bought up, leading buyers to shell out for more market-priced homes.
“There’s a trajectory to see this increased interest in investment in the city,” Knowles says. But “it’s not entirely true yet.”
The future remains uncertain
So while the prospects for these wounded communities appear better than expected, they’re still a long ways from a happy ending. And rioting certainly shouldn’t be seen as a tool to spur urban revitalization.
“Once somebody starts a fire, they don’t know what’s going to burn down,” says Kevin McGruder, a history professor at Antioch College in Yellow Springs, OH.
“We can look at the aftermath and see that resources were directed toward those communities,” he says. But “it could [also] lead to abandonment.”
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