Rudy Giuliani

A little over $1 billion has been pumped into Harlem housing in five years and has helped trigger a fledgling retail revolution, with outlets such as Blockbuster Video, Rite Aid and Duane Reade now becoming part of the West 125th Street main thoroughfare. That, together with a 60 percent lower crime rate, soaring rentals and upscale families pursuing reduced-priced brownstones, has led to high but wary optimism among Harlemites accustomed to having their hopes dashed.

“This is a Cinderella story about how to rehabilitate a neglected part of the city with a combination of public and private funding,” said William Shanahan of Cushman Wakefield, a realty concern. Benjamin Fox, a partner in New Spectrum Realty, said, “Corporate executives are looking at Harlem in economic terms these days, not in racial terms.”

“Harlem is hot and it’s good for business,” said Vie Wilson, a real estate broker with the upscale Corcoran Group. The neighborhood is about 25 minutes by subway to Wall Street, and although the two areas aren’t ordinarily thought to share much, they are developing common ground, according to Spencer Means, a fellow Corcoran Group agent who says he’s selling property to many Wall Streeters. His pitch is simple: Harlem is cheaper than other communities and it offers easy access to transportation.

But how long bargain basement townhouses will last is questionable. A townhouse that was $160,000 two years ago is now about $450,000, according to Wilson and other brokers in the area. Those rapidly escalating prices thrill realtors, of course, but worry locals who have lived in Harlem for years. Some acknowledge that while it’s good to see improvement in the community, the pace of redevelopment frightens them.

“It’s a double-edged sword,” said Haskell Gray, 42, a corrections officer who was born in Harlem and has lived there all his life. Gray said he and his wife, Nina, a nurse, couldn’t buy a brownstone in the 1980s because of red-lining by banks. Now loans for townhouses are readily available, but he can’t afford the prices that are being asked. “What are you supposed to do? It’s frustrating as all hell. It’s good we’re making improvement but I’m not sure most of us can afford it,” Gray added.

The fact that some corporate leaders say Harlem is no longer being viewed in racial terms alarms some residents, who see Harlem being taken over by major developers and worry that there is little room for the small investor. “We should have a vehicle for investing in the community, but we don’t,” said David Givens, 41, who was born and raised in Harlem. “The way the system is working, either you are a major developer or you’re not, and most of us are not. This is our community but we are not players.”

The empowerment zone could provide ways for local businesspeople to compete, by providing low-cost loans, grants and technical assistance to Harlem and South Bronx entrepreneurs. But it has been shackled by politics since its inception. Halfway through the 10-year program, New York has spent a little over $26 million of the $300 million it is alloted until 2004.

Harlem was beginning its comeback before the empowerment zone legislation, of course, and even before the recent burst of investment by private businesses. In the late 1980s, artists began to move to the neighborhood, attracted by cheap rents. Some African-American middle-class and professional people began to return, too, attracted by lower housing costs as well as a desire for community. A refurbished Apollo Theater brought a sense of tradition restored, and helped improve the area’s night life.

Then came the empowerment zones, the largest new anti-poverty initiative funded by the Clinton administration to date. Although empowerment and enterprise zones had previously been championed by Republicans, the Clinton-Gore team championed a modified version requiring community participation, and vastly expanded the funding.

There were signs of trouble from the very beginning, however. Rep. Charles Rangel, D-N.Y., who wrote the empowerment-zone legislation, did so while the city, state and federal government were being run by Democrats, from President Clinton to Gov. Mario Cuomo to Mayor David Dinkins. But by the time the legislation was enacted in late 1994, both Dinkins and Cuomo had been defeated and replaced by Republicans Rudy Giuliani and George Pataki.

Federal rules about how the money was spent required unanimity among major decision makers, to avoid the mistakes of previous urban renewal experiments, which have tacked between too much community control and too little, resulting in billions of public dollars being spent badly. “We didn’t want any one person deciding the fate of funds that later would disappear down some deep, dark hole,” one official, who spoke on condition of anonymity, said.

But Giuliani and Pataki are two Republicans who don’t agree with one other, much less with local Democrats. Agreement has been impossible given the political differences between community folks, Giuliani and Pataki representatives and federal officials. The mayor’s office, in particular, was tough on spending proposals. “Look at it from their perspective,” said a neutral insider. “Why should the Giuliani administration approve millions of dollars for neighborhoods that give him little or no political support? They repeatedly vote against him, so why should he give them more ammunition to beat up on him.”

The result has been gridlock. The Highbridge Community Life Center in the South Bronx is an example of a program that has been stymied by politics for months, waiting for a $500,000 grant to continue its counseling and job training for welfare recipients and high school dropouts. “All you can do is try to wait them out,” says Brother Ed Phalen, who runs the center. There are scores of programs and small businesses in the Harlem/South Bronx zone with similar complaints.

Another worry is about whether the zone will slow gentrification or hasten it. This historically black, low-income community takes pride in its status as capital of black America. But the proud Harlem of the Cotton Club and Connie’s Inn, of Langston Hughes and Duke Ellington, Zora Neale Hurston and Louis Armstrong, was the same place where, in the 1920s, poverty, crime and tuberculosis rates were high. In the 1980s a Harlem hospital study concluded that a man born in poverty-wracked Bangladesh had a higher life expectancy than one from Harlem. From a peak of nearly 500,000 residents in the 1920s, the population dropped to about half that in the 1980s.

Now the population is rising again, and Harlem is gradually diversifying, with more Latinos, Asians and whites moving in, and some poor black families being displaced by rising real estate prices. Some residents hope the empowerment zone will help black families and black businesses stay in Harlem, but so far the evidence is uneven. The zone’s largest investment to date, $11.9 million, is in the Harlem USA mall, which mostly houses white-owned businesses.

Zone boosters say that now that the first logjam has been broken, more diverse projects will get funding. The Clinton administration is working hard to ease the governance glitches, because the program will be the centerpiece of Vice President Al Gore’s urban policy during the presidential campaign.

Meanwhile, the program remains popular in Harlem, despite the red tape, political squabbling and worries about gentrification. The private sector likes it and so do many low-income Harlem residents, who stand a better chance of getting jobs thanks to the funding. And despite the hype, there isn’t a stampede of Wall Streeters north yet. As realtor Vie Wilson admitted when pressed on the subject: “Maybe Harlem isn’t for everybody.”