Critics, though — who generally view developers’ pronouncements skeptically, if not cynically — aren’t alone in expressing concern that the surge of new development will gentrify Olneyville and the Valley, displacing small businesses, families, and other longtime residents.
UP IN ARMS: The Olneyville Neighborhood Association wants the community involved in the decisions that affect its future.
Thomas E. Deller, director of Providence’s Department of Planning & Development, concedes that low- and moderate-income residents, including artists, bear the brunt of new residential growth. While Deller cites balancing new growth with the preservation of existing communities as a desirable goal, the city seems to lack a real plan for achieving this outcome. Asked how the city will deliver this balance, Deller calls the query “a good question,” adding, “We’re going to keep struggling our way through it. We’ll win some, we’ll lose some.”
Predicting the impact on housing prices of projects like American Locomotive is “highly speculative,” says Richard Godfrey, executive director of Rhode Island Housing, the state’s principal housing agency. Still, Godfrey says, the cumulative effect of Providence’s condo fever seems clear. “To the extent that these condos encroach on traditionally affordable [working class] neighborhoods, we have to be careful that housing opportunities remain for the people who live there and anyone who wants to live there.”
The surreal quality of the housing market can be seen by how some Olneyville homes are being offered in the once-inconceivable area of $300,000. Perhaps it’s not surprising then that some critics believe that costly new developments will fall victim to a speculative bubble, perhaps making way for the return of lower-rent residents.
Edward M. Mazze, forecaster for the New England Economic Partnership, added some fuel for this belief when he was asked in early May about the more than 400 luxury condos being built in downtown Providence. “I don’t believe they’re going to be able to fill them,” Mazze told the Providence Journal. “You’re going to have all of these condos in a city where most of the professional service firms of any size are no longer headquartered here. What’s going to happen is that there are going to be a lot of empty condos!”
Similarly, in a May 15 op-ed in the Wall Street Journal, urban theorist Joel Kotkin asserted, “Wannabe ‘hip cool’ cities need to realize they can’t thrive merely as amusement parks for the rich, the nomadic young and tourists. To remain both vital and economically relevant, they must remain anchored by a large middle class, and by families and businesses that feel safe and committed to the urban place.”
Godfrey, though, says it’s very tricky to resolve whether Rhode Island’s capital is primed for a housing bust. “Most economists across the country believe Providence is in for a severe price correction, that we are significantly overpriced,” he notes. “The reason for this is that prices have increased 11 times faster than incomes since 1999. That one sentence speaks to [why low-wage workers are] being priced way out of the market.” At the same time, however, refugees of Boston’s more costly housing market are continuing to buy homes, Godfrey says, in the surrounding cities of Providence, Worcester, and Manchester, New Hampshire.