Who loses when a city neighborhood goes upscale?

  • Albert Street in Portland, Oregon

    Map by Diane Sylvain
  • A family participates in the Alberta Street clean-up day

    Julie Keefe photo
  • Sign in a vacant lot in Northeast advertises new development

    Michelle Nijhuis photo
  • LIFELINE: Leslie Garth-Clark

    Michelle Nijhuis photo
  • PARKED: Waiting for a free dinner at Doris' Cafe

    Michelle Nijhuis photo
  • Curbside cars on Alberta Street

    Michelle Nijhuis photo

PORTLAND, Ore. - In Northeast Portland, you can get culture shock just by crossing the street. Near the corner of Alberta Street and 28th Avenue, a no-frills tacqueria called La Sirenita sells fish tacos to a long line of customers for little more than a dollar apiece. On the other side of Alberta, Bernie's Southern Bistro offers a platter of ribeye steak for $16; for five bucks more you get a side of fried green tomatoes.

In this neighborhood, across the Willamette River from downtown Portland, blocks of boarded-up buildings and repossessed automobiles cozy up to galleries displaying pottery, handcrafted furniture and African art.

"We're just waiting for a Starbucks here, and then we'll know we've made it," Ira Grishaver says wryly. Grishaver is executive director of the Community Cycling Center, a nonprofit group that teaches bike repair and safety to neighborhood kids. Inside the brightly lit shop on Alberta Street, Grishaver is surrounded by a rainbow of donated bikes in various stages of repair. While he talks, a Mercedes-Benz pulls up to the curb outside.

Not too long ago, Northeast Portland would have been an unlikely place for a Starbucks or a Mercedes. Many of its neighborhoods had, and still have, a reputation for poverty, violence and crime. But middle-class newcomers, drawn to Portland by the Pacific Northwest's boom, are discovering cheap real estate here. While some locals in this primarily African-American and Hispanic community are capitalizing on the influx, others are scrambling to deal with the new Northeast.

A war zone

"When we moved (to Northeast) in 1994, people said, "You're moving there?" "''''says Iris Martinez, a Puerto Rican immigrant who has just opened a Spanish-speaking travel agency on Alberta Street. "It was like going to a war zone, from what people said. We bought guns, we bought everything - just to protect ourselves."

The area's reputation may be exaggerated, but it isn't entirely undeserved. Even though upscale restaurants are starting to appear on Alberta Street, Northeast Portland still has the highest crime rate in the city. "Shootings and drive-bys still happen here," says Mark Knudson, a pastor at Augustana Lutheran Church in Northeast Portland. "My street has been cordoned off many times since I've lived here. Sometimes you'll hear shots in the neighborhood, and you'll grab your son and keep him low, just in case."

"Gang activity is down, but you'd be surprised at the number of people who carry guns with them or in their cars, especially young people," says Tonya Parker, a Northeast native and reporter for The Skanner, a weekly Northeast newspaper covering Portland's African-American community. "Usually, three or four of the 15 or so incident reports at the precinct are young people arrested for gun or drug possession."

Northeast Portland may have urban problems, but its low cost of living has lured crowds of middle-class professionals from Portland's pricier neighborhoods. In their wake, businesses are opening every month on Alberta Street, Killingsworth Street, and other hot spots.

"Killingsworth used to be all boarded up," says Serena Cruz, the newly elected county commissioner for North and Northeast Portland. "You went there, did your job, and went home. Now, it's booming."

The new storefronts have brought jobs to the area, but some say the boom has created new problems without solving the old ones. In the last few years, the price of real estate in some of Portland's last affordable neighborhoods has doubled and tripled. Northeast homeowners are deluged with sell-for-cash offers from real estate speculators, and bright yellow signs reading WE BUY HOUSES dot the neighborhood near Alberta Street.

Portlanders have seen it all before. In the early 1980s, Northwest Portland was a seedy industrial district, known as a hip haven for artists living on the cheap. Now, Northwest 23rd Avenue, lined with upscale chain stores, is known as "Trendy-third," and housing is very expensive.

"There's nothing wrong with gentrification as long as there are policies to ensure that all the people who used to live there can continue to live there," says Cruz. "But people who have lived in the district forever because that's where you could afford housing are now being pushed out."

Raising all the boats

In late 1995, a group of community leaders concerned about the downside of gentrification founded the Albina Community Bank, now located in a new brick building on Martin Luther King Jr. Boulevard. As one of the first community development banks in the country, Albina makes loans that a traditional bank would avoid - small loans, low-interest loans, and loans to people with bad credit.

The bank wants to revitalize North and Northeast Portland, says the newly appointed president and CEO Michael Henderson, but it also wants to ensure that low- and middle-income residents can enjoy the benefits. "We wanted to create an environment where we raise the water level for everyone and all the boats come up."

After three years, the community bank is making about $40 million of loans each year. About $20 million of those loans, says Henderson, might not have been made by a traditional bank. "We're educating our borrowers. Once they get the money, we're helping them manage it so they can pay us back."

This costs. Even after a major fund-raising effort outside the community, the bank is just now reaching the break-even point. "There's always going to be a tension between the social mission and the financial needs of the bank," says Henderson. "I think we're making a difference, but it is not easy."

One longtime customer of the community bank is Doris' Café, a barbecue restaurant and bar just a block away from Martin Luther King Jr. Boulevard. Today, the restaurant is closed to customers. Inside, however, the atmosphere is frenzied, as cooks put together dinners for the homeless. Over a thousand meals will be served today, says owner Rose Dean, who pauses briefly to put in a good word for the bank.

"The community bank is a personal bank - other banks are so impersonal," she says. "For us, they've been a blessing. We've been going to them since they opened. They supplied me with a credit line, and they helped us expand."

The bank isn't the only organization with a social conscience. In Northeast Portland, affordable housing groups are almost as plentiful as espresso shops. Habitat for Humanity has built or remodeled 30 low-cost houses in Northeast since the group's founding in 1981. The city-funded Portland Development Commission has made over $5 million worth of small-business loans to Northeast entrepreneurs during the past three years, and four nonprofit community development corporations in the area are also working to build affordable housing and nurture small businesses. One group, the Sabin Community Development Corporation, has even established a small land trust to freeze prices on a few properties. But all of the groups say that housing costs will almost certainly continue to increase.

"We're at this crossroads now," says Alcena Boozer, the rector at St. John the Deacon Episcopal Church and a former principal of Jefferson High School in Northeast. "Is the community going to be so affluent as to economically displace the people who have claimed these neighborhoods for generations? Or will we learn how to collaborate and work on affordable housing and economic justice?"

Life at the bottom

For some Northeast Portlanders, like those waiting for a free dinner at Doris' Café, a loan from the community bank or a house from Habitat for Humanity is a faraway hope. Many of those have turned to the Low Income Family Emergency Center, a one-story building just a few blocks north of Albina Community Bank. Inside, the center looks like a small Salvation Army store, with racks of used clothing, housewares, and appliances. Food and clothing are available here in exchange for a few hours of work, and several people are vacuuming, sweeping and moving furniture.

"We served 551 families here last month," says executive director Leslie Garth-Clark. "And that's not including the people who say, "Hey, Leslie, I just got out of jail, can you help me find a job?" That's not counting the single mom who just needs someone to listen. If you count all those people in, we probably help 800 people a month."

As we talk, a procession of people poke their heads into her office. A tall, haggard-looking black man in his early 20s wants money for a room. Garth-Clark says no. Two elderly black men, who work at at the center to earn the food and clothing they've received, stop by to say hello. A young white woman new to Portland asks when she can work to earn the mattresses she's just picked up - one for each of her six kids. "Come anytime! We don't turn down help," Garth-Clark, laughing, tells this last visitor.

Among the poor, Garth-Clark says, are immigrants from Latin America or Eastern Europe who are just starting out on life in the States.

"In the past couple of years, the number of Hispanics (at the agency) has doubled, and there are a lot more Russian immigrants," she says. "Some of the Russians have 10 people in their family. There were three Russian families in here yesterday that added up to 27 people to feed."

Some immigrants who arrived with little have found success. After driving a taco truck for five years, soft-spoken José Luis Muûoz is now the owner of a Mexican grocery store and the Mi Ranchito tacqueria on Alberta Street.

But on the corner of Burnside Street and Grant Avenue, a crowd of mostly undocumented Latino men waits each day for offers of temporary, low-paying work. It's an uncertain way to make a living - much less support a family.

A regional problem

Some longtime residents and new immigrants are already leaving for the cheaper suburbs. "A lot of my sisters, neighbors and friends are complaining about rents increasing," says Tonya Parker. "They're talking about moving to outer Southeast (Portland), or moving to St. John's."

For those who can't afford to buy a house, the suburbs aren't exactly waiting with open arms: Working-class Gresham recently passed an ordinance preventing the construction of new rental housing in several sections of town.

Which points out why "poverty has to be something we address as a region," says county commissioner Serena Cruz. "Local decisions aren't going to solve the broader problems."

To that end, Portland's metropolitan area government adopted a region-wide affordable housing plan at the end of 1997, but local government officials challenged the requirements in court. Although a compromise last summer softened the plan's language, the new rules remain controversial.

"We're clearly making some people very nervous, so that must mean we're making progress," says Tasha Harmon of the Community Development Network in Northeast Portland, a group involved in the regional planning process. "But it's deeply frustrating to watch the housing prices continue to go up, without any affordability built into these communities."

Back on Alberta Street, the new entrepreneurs are busy planning their future. Last year's street fair was a great success, and the shops that have opened during the past year are eager to participate. Business owners are signing up for sidewalk cleanup and neighborhood beautification projects, and all agree that the street is looking better and better.

Travel agency owner Iris Martinez says she and the other businesses deserve their newfound prosperity: "If you're a part of the rehabilitation, you have a right to some of the benefits, right? I think my neighborhood is going for the best."

Ira Grishaver isn't so sure. While the Community Cycling Center has a steady stream of volunteers and more donated bikes than it can possibly use, he says the group may soon be priced out of its rented space on Alberta Street. "The poverty is moving to Gresham and Hillsboro and outer Southeast (Portland)," he says. "Maybe we'll move there, too."

Michelle Nijhuis is a staff reporter at High Country News in Paonia, Colorado.

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