Background

City Council will vote on March 24th whether to continue holding approximately 2.4 acres of City-owned land downtown for a potential arts and entertainment complex. The site is located on Eagle Street in The Block, Asheville’s historic Black business district, and is adjacent to the East End / Valley Street neighborhood. For our full report on this issue, click here.

If a Performing Arts Center is built, what will the impact be on East End/Valley Street and The Block over the next 5–10 years?

If a new performing arts center is built on Eagle Street, it will likely increase attention, foot traffic, and private investment in the surrounding area. That could bring some benefits to the region, but it also carries real displacement risks for the East End/Valley Street neighborhood and The Block commercial district.

1. Property values are likely to rise faster than the rest of the City

Research from other cities shows that major cultural venues often push nearby property values up slightly faster than the overall market, sometimes by an additional 0.5% to 1% per year.

In a neighborhood like East End/Valley Street:

• Even modest increases compound over time.
• A home valued around $400,000 today could see tens of thousands of dollars in additional appreciation over 5–10 years beyond normal growth.
• Higher appraisals lead to higher property tax bills.

For long-time homeowners — especially low-income homeowners and seniors on fixed incomes — rising tax bills can create pressure to sell. For renters, landlords could raise rents to cover increases in property taxes.

2. A likely 5–10 year displacement pathway

Here is the most probable sequence of events:

Year 0–2: Announcement Phase 

• City commits to build the facility in partnership with ATG Entertainment.
• Investors begin purchasing properties quietly.
• Real estate speculation increases.
• Short-term rentals and redevelopment inquiries rise.

Year 2–4: Construction Phase

• Appraisals of the value of nearby properties begin to rise as the project nears completion.
• Property tax reassessments increase.
• Small landlords raise rents in anticipation of higher demand.
• Commercial property owners increase lease rates for local businesses.

Year 4–7: Opening & Activation

• New visitors and businesses increase demand for nearby housing.
• Property owners convert existing units to higher-rent ones.
• Long-term renters face non-renewals or rent hikes.
• Commercial rents on The Block begin rising sharply.

Year 7–10: Market Reset

• Ownership turnover increases.
• Long-time residents sell under financial pressure.
• New higher-income households move in.
• The demographic and cultural character of the neighborhood shifts.

This is not guaranteed, but it is a common pattern when major cultural anchors are introduced near neighborhoods from which cities have divested resources.

3. Specific risks to East End/Valley Street

East End is especially vulnerable because:

• It is adjacent to downtown.
• It has a limited housing supply.
• Many homes are older and owned by long-time residents.
• The neighborhood has historic and cultural significance.

Even modest property value increases can:

• Raise annual tax bills by hundreds or thousands of dollars.
• Trigger sales of inherited or family-held properties.
• Encourage teardowns and redevelopment of existing properties.

Without intervention, the result over 5–10 years could be gradual but steady displacement.

4. Specific Risks to The Block and the YMI Cultural Center

The Block is one of Asheville’s most important historic Black commercial districts, anchored by the YMI Cultural Center.

Risks include:

Commercial Rent Escalation

As foot traffic and tourism increase:

• Property owners may raise rents.
• Small businesses with thin profit margins may not survive lease renewals.

Cultural Extraction

• Attention and dollars could be shunted away from the businesses that have legacy in this area as it becomes newly branded and marketed
• Historic spaces that had served as community anchors could lose their cultural and practical significance.

Ownership Change

• Buildings may be sold to outside investors.
• Long-term commercial tenants could be replaced with higher-revenue tenants.

5. Two pathways

Possibility 1: If no protective policies are put in place, here is what the neighborhood could look like in 10 years:

• Fewer original homeowners.
• Higher housing prices.
• More upscale and short-term rentals.
• Rising commercial rents.
• Fewer legacy Black-owned businesses on The Block.
• Cultural heritage preserved symbolically (in name only), but not necessarily economically (legacy businesses and institutions could lose revenue, attention, and support from the growing community).

Possibility 2: If protections are enacted early — before speculation accelerates — the trajectory can be different.

Existing homeowners, renters, and businesses can be protected from the potential financial pressures and impacts of development if property value growth coexists with:

• Tax stabilization programs.
• Affordable housing preservation.
• Commercial lease protections.
• Dedicated reinvestment of City/performing arts center resources into and support for The Block and YMI.

6. Bottom Line

A performing arts center will not automatically cause displacement.

But in a tight downtown-adjacent neighborhood like East End/Valley Street, the combination of:

• Rising property values
• Increased investor attention
• Higher commercial rents
• And limited affordable housing supply

creates a predictable displacement risk over 5–10 years.

Whether that risk becomes actual harm depends on what the City does before construction begins – not after.

What would real anti-displacement protection cost — and can Asheville afford it?

If the City proceeds with a performing arts center on Eagle Street, preventing displacement in East End/Valley Street and protecting The Block will require intentional, funded policy action.

Below is an estimate of what meaningful protections would cost over 5–10 years.

1. What Protections Would Actually Be Necessary?

To meaningfully reduce displacement risk, the City would likely need:

A. Homeowner stabilization

• Property tax relief for long-time homeowners
• Home repair and aging-in-place grants 
• Estate planning / heir property support

Estimated 10-year cost: $3–5 million

B. Rental housing preservation

• Acquisition of small rental properties before investors purchase them
• Gap financing to keep units affordable
• Support for small local landlords to prevent upscale conversion

To preserve even 40–60 units near downtown would require:

Estimated 10-year cost: $6–12 million

C. Small business & cultural district stabilization (The Block)

• Commercial lease assistance fund
• Façade grants & capital repair support
• Long-term support partnership for the YMI Cultural Center
• Cultural district infrastructure investment

Estimated 10-year cost: $2–4 million

D. Administrative & legal support

• Tenant legal assistance
• Monitoring property transactions
• Program administration

Estimated 10-year cost: $1–2 million

2. Total estimated protection cost (10 Years)

Low range: ~$12 million
High range: ~$23 million

That equals roughly:

• $1.2–2.3 million per year over a decade

3. Put in budget context

Asheville’s annual operating budget is roughly $250+ million.

However, the City is facing a structural deficit of approximately $30 million in upcoming fiscal years. (A “structural deficit” is persistent, long-term imbalance where a government’s recurring spending exceeds its revenue, even when the economy is operating at full employment.)

That means:

• The annual anti-displacement protection cost would equal about 4–8% of the projected deficit

OR

• Roughly 0.5–1% of the total annual operating budget

4. Can Asheville afford this?

Scenario 1: Protections funded from General Fund

Given the structural deficit:

• Difficult without service cuts or further tax increases
• Politically and fiscally challenging

Scenario 2: Protections Built into the Development Deal

If structured correctly, protections could be funded by:

• Development agreement payments
  • The City can require financial contributions as part of approving the project. This would be written into a legally binding agreement with the developer. That could mean:
    • An upfront payment into a housing stabilization fund
    • Annual payments over time
    • A percentage of venue revenue set aside for neighborhood protection
    • This is the most direct and enforceable way to fund anti-displacement efforts.
• Ground lease revenue
  • Instead of selling the land, the City could lease it long-term. That means:
    • The City keeps ownership
    • The developer pays annual lease payments
    • Those payments can support housing and small business protections
  • This creates ongoing revenue rather than a one-time land sale. (It’s our understanding that this kind of long-term lease is the City’s current intention.)
• Tourism Tax Revenue (Limited Use)
  • Under North Carolina law, occupancy (hotel) tax revenue cannot be used for housing stabilization or anti-displacement programs. It must be spent on:
    • Tourism promotion (marketing, advertising), or
    • Tourism-related facilities that increase lodging activity
  • That means tourism taxes cannot directly fund housing protection in East End.
  • However, tourism tax funds could potentially support:
    • Cultural facilities or capital improvements that qualify as tourism-related
    • Marketing and promotion of The Block as a heritage district
  • But they cannot legally fund housing affordability programs.
• Parking revenue capture
  • Event nights will likely increase parking demand. The City could:
    • Charge higher event-night parking rates
    • Dedicate a portion of that revenue to neighborhood stabilization
  • This is a modest but steady funding stream tied directly to the project’s impact.
• Public/private cost sharing
  • Instead of the City paying for everything, the developer shares costs. Examples:
    • Developer funds part of streetscape improvements
    • Shared funding for public safety or sanitation on event nights
    • Joint investment in a small business stabilization program
  • This reduces pressure on the City’s general fund — especially important given the current budget deficit.

Bottom Line

Given North Carolina’s legal limits on tourism taxes, the most realistic funding tools for anti-displacement protections are:

• Development agreement payments
• Ground lease revenue
• Parking revenue
• Direct cost sharing

If protections are not built into the project financing itself, it will be very difficult for Asheville to fund them through its already strained general fund.

This is the more financially realistic path.

5. What happens if protections are underfunded?

If only minimal funding is provided (for example $2–4 million total), likely outcomes:

• Limited homeowner relief
• Minimal rental preservation
• Commercial rent escalation continues
• Cultural stabilization symbolic, not structural

In short: mitigation, not prevention.

6. Conclusion

To meaningfully prevent displacement in East End and protect The Block:

• Asheville would likely need to commit $12–23 million over 10 years.
• In the context of a $30 million structural deficit, the City cannot easily absorb this from existing revenue without tradeoffs.

Therefore:

• If the performing arts center proceeds, serious anti-displacement funding must be negotiated as part of the project itself, not treated as an afterthought.
• Otherwise, the fiscal reality suggests protections will be too small to meaningfully change the 5–10 year trajectory.