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Gambles in dicey neighborhoods pay off for homeowners
Urban pioneers who placed a bet on their futures when they bought homes in dicey neighborhoods are cashing in as property values soar.
BY LISA ARTHUR
Tony Velazquez and his girlfriend grabbed their wine glasses and strolled out the front door of his house to the seawall at the end of Northeast 25th Street for a moonlit capper to their dinner date.
As they enjoyed the bay view, two neighborhood crackheads started harassing them and threatened to rob them. Velazquez got in their faces. Cursed them out. Invited them to follow him to his house so he could drop off his girlfriend and get his gun. He dialed the police on his cellphone.
The thugs took off.
''It's easy to be an urban pioneer when you have a badge,'' said Velazquez, 41, a federal law enforcement agent who has seen the market value of his property in the 400 block of Northeast 25th Street nearly triple since he bought it in 2000 for $255,000. He encountered the thugs a month after he moved in. It didn't make him think twice about his investment. Now he's reaping the benefits. He took the equity out of the house to buy a half-million-dollar home in Morningside, which he rents out, and a condo for his father.
As Miami remakes itself, reclaiming once-stately neighborhoods lost to neglect, poverty and crime during the '70s and '80s, such pioneers as Velazquez -- often thirty-something professionals with decent salaries and no kids -- are starting to cash in on bets they made when they moved into dicey areas with drug dealers, prostitutes and petty thieves. The payoffs come in rejuvenated neighborhoods and soaring property values.
For many at the lower end of the socio-economic scale, the trend is simply accelerating a loss of affordable housing. But for others, buying into transitioning areas is the only way they can afford to crack the South Florida housing market, where midpoint prices for a single-family home have doubled in the past few years.
People already priced out of the first wave of such gentrified urban neighborhoods as Morningside, Belle Meade and Buena Vista find urban pioneering is the only way to afford the lifestyle they want. They trade security for the appeal of living near such emerging urban centers as the Upper Eastside and what many hope will become a bustling Performing Arts Center district.
EDGY EDGEWATER
Velazquez, a bachelor who describes himself as ''a kid from New York City who wants to be in the middle of everything,'' settled in Sunrise when he arrived in South Florida in 1992.
''That lasted four months,'' he said. ``Too suburban.''
Then it was North Bay Village for six years. He found himself craving the grittier urban streets of his childhood. He discovered Edgewater, a neighborhood in striking distance of South Beach, Brickell and the Design District.
The house on Northeast 25th Street was being transformed from a chopped up, partitioned maze of a rooming house into a charming three-bedroom with a fireplace, wood floors and a second-story deck with a view of Biscayne Bay. And it had two detached apartments out back. One for his dad. One to rent out.
He didn't flinch when he learned two people had been murdered in the house. Or when he saw the drugs and prostitution at either end of the block.
The neighborhood has cleaned up nicely. People aren't afraid to go outside anymore. Crime is still a problem -- thieves broke into Velazquez's house last year. Last month, someone broke into one of the apartments while his tenant slept. They stole her car.
It's still worth it, he said.
''I think this house was a steal,'' he said. ``I knew the value would increase, but I had no idea what was about to happen.''
What happened was that South Florida's real estate market went berserk, and values skyrocketed. Developers discovered Velazquez's neighborhood. His house sits in the middle of a high-rise building boom. Owners on either side are selling. Builders have offered him as much as $800,000 for his property. For now, he's staying.
``You don't want to get boxed in by the high-rises, though. If this house is ever sold and knocked down, I will have a shot of tequila and four or five tears.''
Then he'll move to Morningside.
SOYKA'S AREA
Robert Holland bought the rundown rooming house on the 5900 block of Northeast Fourth Court -- a few blocks north of Soyka's restaurant -- in 2001. He wanted a renovation project that would test his skills and keep his mind off the end of a relationship.
His friends thought he was crazy. He already had a home in Miami Lakes. A nice home. Why bother with the broken house, they asked. One friend, a police officer from Hialeah, told him to get a gun and stay inside at night.
''I knew property values would go up,'' he said. ``The area had already started to turn over. You had Soyka's. And the Performing Arts Center was coming.''
Holland paid $73,000 for the two-level house. He gutted it and spent about $40,000 on renovations. He converted the second-floor bedroom into a law office. The first floor has dark wood floors, a swanky bar and a striking fireplace.
The house became his ''city home,'' where he stays part of the week. Early on, he had to chase away vagrants who slept in the backyard. His shed got broken into. So did his car. Someone kept stealing the garden hose.
But the neighborhood has turned around.
Holland, 41, is planning to put the house on the market soon for $700,000. There's a million-dollar dream home on the Intracoastal not far from his neighborhood that he wants to buy.
The house in Miami Lakes is up for sale, too. If he doesn't get the Intracoastal house, he'll move into the house on Fourth Court full time.
''I got bored out in the suburbs,'' he said. ``The more nights I stayed at the city house, the more I knew this is where I want to be.''
PALM GROVE
The urban core is where artist Noel Suarez wants to be, too. In 2002, he grew tired of living in South Beach and started searching in Palm Grove. It roughly runs from 54th Street north to 80th Street and from Northeast Fourth Court east to Biscayne Boulevard.
The neighborhood has enjoyed a rebirth in the past four years, and it's still a good buy, real estate agent Patrick McCoy said.
''You can still get into a house here for $350,000 to $450,000,'' he said. ``Five years ago, they were going for the high $60s.''
The houses are fixer-uppers built in the '20s and '30s. Beach condo refugees have flocked to Palm Grove, McCoy said.
Suarez, 47, found his Mediterranean-style home with Art Deco flourishes just as a developer had started to renovate it. He paid $195,000 for the funky house that's filled with Dade County pine, Art Deco arches and glass block. He turned the carport into an art studio. And he and his partner nurtured the backyard into a tropical haven.
''It's beautiful and peaceful, and we're still right in the middle of everything,'' he said. He loves being able to walk to his gym and the restaurants that have popped up along Biscayne. And he can ride his bike to the beach.
He's never had a problem with the crime, he said; he grew up in Havana and lived in New York City's Meatpacking District before it went urban chic. It's all relative.
Like other pioneers, Suarez marvels at how the neighborhood has turned around. He could probably get half a million for his house now. But he's not going anywhere.
``I never want to leave here. This is just perfect.''