- The Washington Times - Wednesday, March 3, 2004

The reality of a booming real estate market has settled into the District. More people are trading a long commute from the suburbs for a chic urban lifestyle. Fueled by low interest rates, among other factors, neighborhoods once scarred by boarded-up ruins are now humming with revitalization. Renovated properties are commanding higher prices, which in turn drive up the values of surrounding homes.

For some folks, the change is an unwelcome gentrification.

“These rich people are moving in all up and down my block,” says one man, a longtime resident of Irving Street NW in Columbia Heights. “Suddenly, I’m a stranger in my own neighborhood.”

For others, though, a changing neighborhood can be the key to even greater success. On U Street in Shaw, black-owned nightclubs and other businesses reminiscent of the street’s glory years are opening up alongside the brand-new condos, boutiques and cafes.

Ben’s Chili Bowl, a neighborhood fixture since 1958, recently added a dining room to accommodate its growing and increasingly diverse base of customers.

After years of moving to the suburbs, people are suddenly finding that city living is “cool” once more. There is no better way to be cool than by living in a “hot” neighborhood.

More and more neighborhoods around the District are sporting the brightly colored banners, flags and billboards promising changes to come. Capitol Hill now extends eastward from the Capitol all the way to the Anacostia River. Mount Pleasant and Columbia Heights are just the beginning of a corridor of revitalization that is proceeding up to Petworth and Brightwood.

Sprawling 1900s-era houses in 16th Street Heights and tiny row houses in the area around the new convention center are suddenly “have to haves.” Cranes are sprouting east of the river in neighborhoods once seemingly forgotten by the rest of the city.

“I’ve watched the neighborhood get ‘fixed-upper and fixed-upper,’” says Ellen Levy, a broker with RE/MAX Allegiance who moved to 16th Street Heights in 1986.

It’s a scenario that’s recurring throughout the District.

“Prices in Le Droit Park have doubled in three years,” says Connie Maffin, a longtime neighborhood activist and an agent with Coldwell Banker Pardoe Realty. “One-bedroom apartments in Adams Morgan have gone from $150,000 to more than $300,000.”

In Hillcrest in far Southeast, too, homes that sold two years ago for as little as $150,000 are now routinely selling for more than $300,000.

“It’s the best-kept secret in the city,” says Chuck Riley of the Chuck Riley Group of RE/MAX Allegiance.

Meanwhile, Capitol Hill has “exploded in the last four or five years,” says Don Denton, managing broker at Coldwell Banker on Capitol Hill. Revitalization of the areas around the Navy Yard and the former Arthur Capper dwellings portend big changes to come.

“It’s mind-boggling,” Mr. Denton says. “There will be millions of square feet of new housing and commercial development between there and the river. It will have a tremendous impact.”

Neighborhood revitalization is spreading quickly, too.

“When one area becomes hot, there is going to be a ripple effect into other areas,” Mrs. Levy says. “Every home that gets fixed up leads to one getting fixed up across the street or down the block.”

Take Dupont Circle. In the 1970s, the area was a bit run down and certainly not attractive to home buyers. Houses there could be had for $30,000. Today, the same homes can cost more than $700,000.

So, what about buyers who can’t afford Dupont Circle? They check out a contiguous neighborhood. These days, the old boundaries of 16th Street, Rock Creek Park and the Anacostia River that tended to keep affluent buyers to just a few sections of the city no longer apply.

“People used to say, ‘Don’t show me anything east of the park,’” Mrs. Levy says. “Now they are willing to look just about anywhere.”

Why the rush? Blame the traffic, Realtors say.

“For many years, I was losing deals to Virginia,” Mrs. Levy says. “Housing was newer; it was cleaner and safer. But now the commute is a lot more difficult.”

Plus, many folks like the idea of living in homes that don’t look like the ones in the suburbs.

Recently, Mrs. Levy and her husband decided to invest her commission in the Maxwell, a grand old apartment house on Clifton Street NW that was built by Harry Wardman in 1909, making her part-owner of the property. After years of neglect, the building is being renovated to highlight its past while incorporating some very useful amenities, such as island washers and dryers in every unit.

When it’s done, a single unit will sell for the price that Mrs. Levy’s client paid for the whole building.

Once the prices go up, the amenities quickly follow. After years without a nearby supermarket, residents of Shaw and Logan Circle now enjoy a Whole Foods. Starbucks is on its way. Streets are safer, lawns are greener, and the flowers in the front yards are artfully planned and carefully tended.

Thirty years ago, when Mrs. Maffin bought her house in Logan Circle, 65 percent of the surrounding properties were vacant.

Since then, most of the residences in the area have been renovated to showcase the Victorian details, such as high ceilings, hardwood floors and architectural “gingerbread,” that make them unique.

“Back then, we spent most of the time trying to get the prostitutes off the streets,” she remembers. “Now the whole neighborhood has been reinvigorated.”

It’s not just the old buildings that have former suburbanites clamoring to live in the city. New homes can be attractive, as well; in 2003, new home sales were highest in the District in at least 12 years.

Sometimes, Metro makes the difference.

In Columbia Heights, home to one-third of all the subsidized housing in the city, increased gentrification followed in the wake of the arrival of the subway stop. Suddenly, the old Victorian neighborhood was only minutes from downtown. And the comparatively low-priced stock of imposing 100-year-old homes complete with high ceilings and slate roofs didn’t hurt at all.

Whenever a neighborhood changes, there’s always a certain price to pay — such as having to deal with the knock on the door.

“People are knocking on our door all the time,” says one resident near the new convention center. “‘Do you want to sell your house? Do you want to sell your house?’ I’m getting sick of it.”

Realtors say answering the knock at the door can pay off.

“A home that someone paid $125,000 for can sell for $275,000 in a heartbeat,” Mrs. Levy says. “And that’s a property that needs work. People can sell their houses for more money than they ever dreamed possible.”

As time goes by, the stock of homes available to be renovated decreases.

“I’ve been in the business for 26 years,” Mrs. Maffin says. “This is the lowest inventory I’ve ever seen.”

The resulting competition can drive prices even higher, driving out the same middle-income residents who have been trying to hang on.

For renters, the changes can be profound. As former owners sell their properties to reap the benefits of price increases, new buyers raise rents to cover increased costs or evict renters so they can move in themselves.

To help renters become owners, the District provides a $5,000 tax credit to qualified single buyers and couples as first-time home buyers.

Some folks will be displaced for good, however.

Older housing projects, often centers of crime, violence and other illegal activity, are being demolished. Fewer units are being built to replace them.

On Capitol Hill, demolition has begun on the old Arthur Capper dwellings, public housing units around which many District residents skirted a wide path. Plans for the project include revitalization of the senior-citizen housing and a low-rise community.

“It makes for a friendlier, more diverse neighborhood,” Mr. Denton says. “Affordable housing units are mixed in with market-rate housing.”

Neighborhood change in the District is nothing new.

Georgetown experienced gentrification in both the 1930s and in the 1960s as wealthy people bought up and renovated homes that had previously housed low-income black and white residents.

Some run-down neighborhoods were razed at the end of the 1920s to make way for the buildings of Federal Triangle. There was the “white flight” that followed the riots of 1968, and the movement out of the city of much of the black middle class in the 1980s and early 1990s.

“There was an air of hopelessness back then,” Mrs. Levy says, “but there’s been a major turnaround since Mayor [Anthony A.] Williams came in.”

Most of the new owners are not worrying about the state of the District’s public schools.

“I’ve been in the business since 1988,” Mr. Riley says. “I make 70 to 100 transactions a year. And in all of those years, I’ve sold about six homes to people with children.”

Today, households of married couples with children younger than 18 make up only one quarter of the nation’s total, down from four in 10 households in 1970, according to the Fannie Mae Foundation.

Those couples with children who are moving into District housing, where the average price is $348,000 as of 2002, are usually more than equipped to explore alternatives such as private schools.

So where are the banners going up next? Just about anywhere there are interesting houses, comparatively lower prices and easy access to downtown.

“The image of the city is very good right now,” Mr. Denton says.

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