West Oakland hyper gentrification in the WSJ

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This Craigslist screen shot illustrates the trend: "nice&clean" in West Oakland.

Two stories on the theme of gentrification and displacement – a topic we at the Guardian have expended plenty of ink on – ran in major news outlets recently, showing how intense the Bay Area housing market pressure has become as it continues to be fueled by a rapid growth in high-salaried jobs in big tech.

Zeroing in on San Francisco, the LA Times turned an eye toward Mission District gentrification, illustrating the growing divide with a succinct comment overheard on a Muni bus: "I don't know why old people ride Muni. If I were old, I'd just take Uber."

And a Wall Street Journal article provides an eye-opening account of how REO Homes LLC is literally seeking to accelerate the gentrification process by “beautifying” West Oakland, an historic Black neighborhood that is home to predominantly low-income and working-class residents. (Note: The article may be behind a paywall.)

Minutes from downtown San Francisco via BART, West Oakland is dotted with Victorians and was hit with a wave of foreclosure during the economic crash, destabilizing the lives of many families who lost their homes.

REO is an investment firm helped along by San Francisco billionaire Tom Steyer, a well-connected venture capitalist (he even hosted a Democratic Party fundraiser with President Barack Obama at his Pacific Heights mansion earlier this year).

As the Journal’s Robbie Whelan reports, REO has been shelling out top dollar to spruce up not just its holdings, but residences nearby its West Oakland properties. In a rarely seen form of hyper-gentrification, the company has been planting trees, sprucing up homes (for free) of neighbors who aren’t in the market to sell or rent, mending fences, and making other improvements – all in an effort to lure higher-income residents to the neighborhood.

Since 2008, the height of the real-estate market crash, REO has acquired more than 200 homes in Oakland, Whelan reports, mostly in West Oakland. “Most houses cost around $200,000,” he writes, “and [founder Neill Sullivan] said he invests as much $100,000 to fix each one up.”

Real-estate agents have been marketing the neighborhood – which is no stranger to violent crime – to house-hunters as an affordable, nearby alternative to astronomically expensive San Francisco. Now that many people who weren’t able to keep up with mortgage payments have been forced out by foreclosure (see: robocalls, bungled loan modifications, foreclosure abuses), things are changing swiftly, as if by magic. Armed with cash, bankers are chasing away the blight and rolling out the welcome mat for up-and-comers who can’t swing it for that $3,000 one-bedroom in the city.

All of which will likely result in further displacement of Oakland residents who are barely holding on as it is. As Oakland councilwoman Desley Brooks told the Journal: "I'm not interested in finding housing for San Franciscans who can no longer afford San Francisco. I'm interested in helping people here in Oakland.”

Comments

Those devils are fixing up neighborhoods?! What evil will they think up next?

Posted by Guest on Aug. 14, 2013 @ 4:13 pm

Wow! You're hilarious! Yet behind the facile sarcasm I sense that you literally do not understand what gentrification is and why it is so bad for the residents of neighborhoods it tries to take over.

Posted by Guest on Aug. 15, 2013 @ 6:14 pm

It's good for those who live there. There are always residents of an area - they just change over time, and often for the better i.e. people who produce more and commit less crime.

Posted by Guest on Aug. 16, 2013 @ 8:54 am

Uh huh. Thanks for the insight, racist.

Posted by Guest on Aug. 18, 2013 @ 1:35 pm
?

?

Posted by Guest on Aug. 18, 2013 @ 1:57 pm

a racist because most crime is committed by non-whites.

Bizarre, because most victims of non-white crime are, er, non-white.

Posted by Guest on Aug. 18, 2013 @ 2:50 pm

Our building was bought about a month ago and despite that we've lived here for over 5 years, never had one late payment, and cannot possibly afford to live anywhere else in Oakland; as I share a studio with my uncle who is 66 and retired on Social Security and we pay $650 - the entire building is receiving 30 day notices for renovations. I'm terrified, have no idea where my uncle will be able to live, let alone myself. Yes better neighborhoods - sure. But why can't that happen for us; the people that are here. We're worth it right? We have never committed crimes... I work and attend school. Yes, we're low income but that doesn't mean we're not valuable. Invest in policing, social services, education, quality whole foods for the the people already living her. Moving criminals to another area doesn't fix crime and eventually it will come back anyway. It's a short term solution that's gilded with lowering crime but when it comes down to it- that doesn't matter to the people behind it. You don't even matter to the people behind it. Your money is the only thing that matters. The profit in flipping these communities is the only thing that matters.

Posted by Guest on Oct. 20, 2013 @ 9:05 am

this is simply a barricade against trolls

it is a signpost to indicate to the reader that other anonymous posters on this thread are beginning to purposely diminish the conversation into repetitive reactionary hyperbole, and/or petty, mean spirited personal attacks and irrelevant bickering

the barrier is put in place to signal that there is probably little point in reading more replies in the thread past this point

proceed at your own risk

Posted by rkdfhj on Oct. 20, 2013 @ 9:26 am

This is a troll Maginot Line.

it is a signpost to indicate to the reader that I have nothing better to do with my life.

I'm doing this in support of the SFBG mods, even though they keep deleting my "troll barrier" posts for some reason. They just don't understand what a valuable service I am providing.

Besides, I'm WINNING - by making the SFBG web page unreadable, I'm striking a blow from progressivism, or something. This is civil disobedience, like the March On Selma.

I'm WINNING. Truly.

Besides, they kicked me off of sfgate. What else I am supposed to do with my time?

Posted by Troll Maginot Line! on Oct. 20, 2013 @ 11:03 am

you would not have posted the reply in the first place, because it simply makes the problem you claim to be complaining about even worse by adding yet another off topic post to the blog

so there must be another motive for your whinging

the only one that makes sense is that you simply seek to perpetuate irritating trolling on this site

Posted by rkdfh on Oct. 20, 2013 @ 1:39 pm

Maybe it is real what you said, but it is quite simple and for sure many will do it!

Posted by yachtbooker.de on Feb. 13, 2014 @ 12:56 am

No. No. No. I understand. Fixing up neighborhoods destroys people.

Posted by Guest on Aug. 16, 2013 @ 11:34 am

Gullicksen makes an excellent point in the LA Times' article: the demographic shifts fueled by the latest tech boom are here to stay.

Posted by Guest on Aug. 14, 2013 @ 4:34 pm

I really don't know what to think of REO's moves to fix up neighboring houses around the properties they own in West Oakland. But if this were some new phenomena that individual new home owners were doing to assist their neighbors (and their own property values), I doubt anyone would be calling it hyper-gentrification.

Sure that might be the end result, and it's clear that REO's intent is to drive up the return on their investment. But if my neighbor wanted to fix up my house to benefit the rest of the neighborhood, I don't think I'd be inclined to complain.

Posted by Josh Wolf on Aug. 14, 2013 @ 4:45 pm

Cannot happen fast enough. Out with the bad, in with the good.

Posted by Guest on Aug. 14, 2013 @ 4:52 pm

rich = good. Why don't you write your comment with accurate language?

Posted by Guest on Aug. 14, 2013 @ 4:58 pm

He may well mean "out with the black and in with the white."

That said... I'm of two minds about this. On the one hand, I don't like the fact that a community is being displaced. And casually dismissive, insensitive comments like the one above, highlight all that is bad about displacement.

OTOH, I tend to agree with Josh Wolf above. My question is, who exactly does this hurt?
The community of people who currently live there? No, not really. They're getting free repairs to their homes. No one forces them to sell, but if and when they decide to cash out, then they get a good payout -maybe have something to retire on.
New people moving in? Well... not really. They're moving into a nicer neighborhood as a result of the infusion of money (albeit a more expensive one).
Renters? Unlike the condo conversion situation in San Francisco, we're not talking about the permanent destruction of rent controlled housing. From my understanding, most of the people who live there now are homeowners.

Yes, Oakland is getting less affordable as a result, which is unfortunate. But it's also becoming nicer and safer in the process. There's a happy medium between a city being relatively safe and desirable, and an enclave only for the rich. In San Francisco, the balance is way off in the latter direction, but in West Oakland, it's still off balance in the other direction. As long as A) no one is being forced or pressured to sell, and B) rent controlled housing isn't being taken away, it's probably a net positive for Oakland.

For now.

Posted by Greg on Aug. 14, 2013 @ 10:04 pm

I guess even Greg cannot bring himself to say that improving poor neighborhoods is a bad thing simply because it leads to an altering of the racial mix.

Of course, West Oakland is still the badlands and the white folks buying there because they cannot afford SF aren't exactly the upper echelon professionals that Greg despizes.

The reality is that some people are being displaced out of these area's but then, so what? There's always turnover and relocating to a place that better suits your finances is a healthy thing, not a bad thing.

But don't worry - WO is nowhere close to really be gentrified. After dark, it reverts to ghetto type and few law-abiding white people are out unless it's in their locked vehicles. It will take decades of this to turn it into anything that most SF'er would regard as livable.

Posted by Guest on Aug. 15, 2013 @ 1:00 am

It's a negative trend.

Posted by lillipublicans on Aug. 14, 2013 @ 5:59 pm

If Rebecca Bowe says West Oakland is experiencing "hyper-gentrification" there are only two possible explanations:

1. Ms. Bowe hasn't spent much time in West Oakland.

2. Ms. Bowe is using her job as a platform for a political agenda that is based on ideology rather than real research. (If Josh Wolf just chimed in above and questioned the word "hyper-gentrification" that really says something. While Mr. Wolf is unquestionably a leftist, he's neither delusional nor a propagandist.)

Fortunately, no one in Oakland reads the SF Bay Guardian.

Posted by Lamont Cranston on Aug. 14, 2013 @ 7:37 pm

shitless to actually visit one of these black neighborhoods that they eluogize in theory.

Posted by Guest on Aug. 15, 2013 @ 1:02 am

For many years now, I've wondered what it will take to restore the beauty of so many West Oakland houses and bring into the area a vibrant community in which the people living there can thrive with shops that sell good food at an affordable price as well as other community-building assets. Maybe this is the start of something good?

Posted by Guest on Aug. 14, 2013 @ 9:13 pm

It's time for San Francisco and the rest of the Bay Area to step in and stop the dramatic changes taking place in our historic neighborhoods. Things are changing, and not for the better.

Posted by Guest on Aug. 14, 2013 @ 9:32 pm

That's some weird logic you got there.

Posted by Guest on Aug. 15, 2013 @ 1:01 am

neighbourhoods, or perhaps writing into purchase agreements that people can only sell their homes to a certain race?

Posted by Matlock on Aug. 15, 2013 @ 6:27 am

There's little consensus on the best course of action to counter the displacement and high rents caused by the hundreds of thousands high-paying jobs created in Bay Area over the past 30 years. The area is so wealthy and renowned for high paying jobs - and the potential riches via stock options - that the world's brightest, ambitious and most educated people want to live and work in the prosperous Bay Area. Since hundreds of thousands of housing units weren't built to accommodate these new high-paying jobs, of course rents and housing prices have soared.

We keep reading these articles that are essentially the same lament from decades past - high rents, tenant displacement, high housing costs. Woe is us. But that's as far as it seems to go - whining and complaining - since there's little agreement on how the region or a particular city should respond when tens of thousands of more affluent people displace existing residents. Let's remember that the politicians benefit from displacement since they get more property and sales taxes to spend, always a good thing. The displaced residents aren't really a problem since they're not around any longer to complain. And the new residents mostly want to keep things the way they are since that's what attracted them to an area in the first place, and perhaps more importantly, they don't want to see a lot of new housing construction that might reduce the value of their own house. Finally, property investors and speculators don't want to see a lot of new housing construction since new units would reduce a speculator's profit potential.

For most of us who don't have an income within the top 40% range, one reasonable option is to simply go with the flow and find a cheaper place to live. Many of our ancestors were essentially displaced from Europe and Asia because landlords and property speculators controlled the land and housing options, so it's not much different today in the US today in places like NYC, Boston, DC, San Diego, west LA and SF Bay Area. Unless the country and region can find better ways to address housing options for the 60% of residents at the lower income levels, leaving the high cost regions of the US or leaving the US altogether for better economic opportunties may be a good option for many.

Posted by Guest on Aug. 15, 2013 @ 8:41 am

If you cannot afford Oakland, move to Stockton.

I cannot afford Aspen so I live elsewhere. NBFD.

Posted by Guest on Aug. 16, 2013 @ 8:56 am

I agree with you. We should get out there, throw some trash all over the streets, graffiti some buildings, break into some cars and beat some people up. That should help improve the neighborhood.

Posted by Guest on Oct. 21, 2013 @ 3:53 pm

I am very aware of REO Homes presence in West Oakland as I have been an Oakland resident for over a decade. REO Homes and Sullivan Management are the main contributors of hyper gentrification but they are also total slum lords and the public would be better served if someone did some investigative reporting about this.

I know because I have rented from Sullivan Management several times. Sullivan Management (check their Yelp reviews) are a rag-tag group of pushy inexperienced amateurs with no or little regard to public safety, affordable housing, or even safe housing at that. I have rented unit after unit of homes which are not up to code, have safe and illegal wiring, shoddy plumbing, infestations, and the like.

Neil Sullivan buys up these homes in West Oakland, slaps on some paint, puts in some new cabinets and flooring and rents them out to unsuspecting tenants. I have lived in units which we so poorly renovated that I had to go to the CIty of Oakland Inspectors and threatened an inspection due to backed up sewer (the sewer was hooked up incorrectly in my illegal unit) and there were times I was left without power for days due to my "non-conforming unit" having homemade wiring that blew a fuse every time I used my microwave.

They are charging tenants premium pricing for units they paid nothing for and are profiting the rents instead of properly renovating their units. I am certain you will find a slew of people who have nothing but horrible things to say about Sullivan Management. They have changed staff multiple times and even their most loyal employees have left at this point- I am assuming due to the chaotic structure and unfair practices.

Sullivan Management and REO are ruining Oakland- not so much because of gentrification but they are buying up all the affordable real estate that otherwise would be loving renovated by home owners who want to stay in Oakland and involve themselves in neighborhoods and bring Oakland back to safer, more prosperous area. Instead, they make falling down homes presentable and rent them out to tenants who have little or no long term interest in the betterment of the neighborhood.

Write a story about that.

Posted by JT Ghostcar on Aug. 15, 2013 @ 9:19 am

you sound more like the type of disgruntled tenant that landlords dread. Story over.

Posted by Chromefields on Aug. 15, 2013 @ 10:11 am

And you sound like a slimy landlord that only collects money for rent and does not keep the place up to code. Yes I know how hard it is when a tenet actually is aware of their rights and calls a slumlord for what they are.

Posted by Guest Thomas Blatter on Aug. 19, 2013 @ 2:00 pm
Posted by Guest on Aug. 19, 2013 @ 2:30 pm

West Oakland is a black ghetto, any African American that wanted to improve their lot in life have left WO. "hyper-gentrification" in this case is a good thing.

Posted by Guest on Aug. 15, 2013 @ 12:05 pm

equal is a non-sequitur. Obviously even just one billionaire will skew the distribution of wealth, but that does not mean that that billionaire is somehow causing the rest of us to be poorer.

Indeed, if he hires a lot of us, and his business pays taxes locally, we can all be better off even while we are theoretically more "unequal".

There is little doubt that the Bay area is far, far better off because of these high-tech companies, and the fact that some people do not share directly in that doesn't make the assertion invalid. Visit Detroit if you want to see the alternative - they would love to have our inequality problem, because there (almost) everyone is dirt poor.

Posted by anon on Aug. 15, 2013 @ 3:44 pm

Oh yes the world is a better place with a few people owning everything and most of the money. Not! Those that have it all need to give back to their fellow citizens or risk the guillotine in the long run. How can one man watch his fellow neighbors suffer and not lend a hand? Fact is the country and the world is a better place without all the uber rich fixing the game for themselves so they can get richer on the blood and sweat of the rest of us. Sorry, dude but the Bay Area was much much better when Majority of the people had a good life not just some slimy rich people that make toys for young people to get hooked on ie. ipods and gameboys. Your trickle down theories of the Job creators are a fantasy brought to us by the uber rich trying to fleece us and make it look like they are looking out for our best interests.

Posted by Guest Thomas Blatter on Aug. 19, 2013 @ 2:07 pm

many wealthy people do with their money e.g. charities, foundations, trusts, donations, endowments etc.

Nobody would be better off if all our billionaires moved to Switzerland. In fact, we'd be a lot worse off.

Posted by Guest on Aug. 19, 2013 @ 2:32 pm

Most billionaires become billionaires by creating value. Most poor people (like you) are poor because you don't create much value.

Posted by Guest on Aug. 19, 2013 @ 3:25 pm

You mean STEALING value.

Posted by Guest on Aug. 23, 2013 @ 2:24 pm

If you are successful, it is because you stole.

If you are a loser, it is because someone stole from you.

How convenient for anyone who fails.

Posted by Guest on Aug. 23, 2013 @ 2:49 pm

You are a loser and no one stole from you.

Posted by Guest on Aug. 23, 2013 @ 3:01 pm

Blaming others for failure is a coward's tactic.

Posted by Guest on Aug. 23, 2013 @ 3:18 pm

I haven't seen much perspective here that reflects how I, as a Black resident of West Oakland, feel about the situation. I see a lot of talk about what's good or what's bad for the Blacks of West Oakland, yet I haven't seen anybody in this thread actually step up and identify as one.

I've rented from Sullivan Management before, and I can assure you, @Chromefields, that @JT Ghostcar is not just a disgruntled tenant, and the story is not over. What he says about their shoddy renovations, overpricing, disorganization, and code violations is true. I've lived it, and I don't doubt it's the sentiment of the majority of their tenants.

No one is complaining about "beautification". Some of these comments try to make it sound like Blacks are against nicer looking neighborhoods. The reason it is a cause for alarm, is because of course they're not actually doing it for the people who live here. They're doing it so they can bring in newer, richer, less-Black residents. Furthermore, many of the comments in this thread seem to reflect the belief that if you get rid of Blacks, you get rid of crime. This perpetuates the stereotype that Blacks are inherently criminal/dangerous/bad/ghetto, etc. I would counter and say that if you get rid of POVERTY, then you'll get rid of crime.

People use the word ghetto as if it were a quality inextricable from blackness. But those people forget that a ghetto is actually "a quarter of a city in which members of a minority group live especially because of social, legal, or economic pressure." A ghetto is a part of town where the people don't really have a choice to live anywhere else, and the resources are extremely limited there. Crime and ignorance will happen anywhere that a group is institutionally isolated, no matter what their race. That's what a ghettoization does to people. So how is pushing Blacks out of West Oakland to just another ghetto going to fix anything? The key to improving the neighborhood isn't getting rid of the people that live there, it's building resources that serve the existing population. The sad thing is, many people don't think that Black life is worth the investment, and think it's better just to push us out and forget we ever existed.

Posted by Guest on Aug. 15, 2013 @ 3:58 pm

I as a white person am being pushed out of Aspen, La Jolla, Pacific Heights and Beverly Hills.

I cannot afford to live in some places and if you find it's the same for you, then relocation becomes a good option for a better standard of living.

Posted by Guest on Aug. 16, 2013 @ 8:58 am

Guest from West Oakland, nails it. Thank you for this.

Posted by Andy on Aug. 16, 2013 @ 9:34 am

Racism has no place here or anywhere else.

Posted by Guest on Aug. 16, 2013 @ 3:30 pm

Guest from West Oakland described his/her reality in Sullivan-owned housing, and described what a ghetto is. It is not automatically playing "the race card" to describe or analyze social conditions in terms of race. Your jumping in says a lot about you and your political views, but it does nothing to advance the discussion of what is happening in West Oakland.

Posted by voltairesmistress on Aug. 16, 2013 @ 4:49 pm

and so made a housing issue into a race issue. That's playing the race card, which is racism.

Posted by Guest on Aug. 17, 2013 @ 6:31 am

Housing issues are, in this case, inevitably tied to race. Have you heard of intersectionality? Pretending like race just isn't in issue is racism.

Posted by Guest on Aug. 17, 2013 @ 11:30 am

that is a poverty issue, not a race issue.

Oprah Winfrey can afford to live anywhere; millions of poor whites cannot.

Posted by anon on Aug. 17, 2013 @ 12:19 pm

Have to say, that was beautifully stated. I appreciate the candor and clarity with which you described the situation. You understand and care and yet still keep a cool disposition about things. 'Tis a rare quality. Keep on - and glad you did "chime in".

Posted by Guest on Aug. 19, 2013 @ 1:34 am

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