A grocery store on Appleton Street, one of the area’s Hispanic businesses.

Gentrification became a concern in Olneyville during the housing boom of 2000 to 2005, when median real estate prices doubled in Rhode Island. Olneyville, a former industrial center of Providence’s West Side, had experienced an even more dramatic price escalation.

According to an analysis by The Providence Plan, the median sales price of residential property in Olneyville climbed from around $50,000 in 1997 to $250,000 by 2005, the height of the boom. Yet in 2000, median family income in Olneyville, $19,676, was the lowest in Providence.

The hot real estate market and the lure of historic tax credits attracted developers who began to transform Olneyville’s mills into stylish condos, restaurants and office space.

Speculators made quick profits by flipping many of the neighborhood’s aging stock of multifamily houses. Some neighborhood activists feared that low-income residents would be squeezed out by rising prices.

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“This neighborhood had a fairly incredible price acceleration,” said Frank Shea, executive director of the nonprofit Olneyville Housing Corporation. It “has gone though some really significant changes in a short period of time.”

Today, the foreclosure crisis presents a more immediate challenge to the neighborhood, which has seen more than its share of boarded-up houses and falling property prices. Olneyville Neighborhood Association co-chairman Norman Ospina recently criticized the city administration for not allotting more money for foreclosure prevention.

A number of nonprofit groups have worked in recent years to rebuild abandoned sections of Olneyville that were besieged by crime, according to Shea. And many local businesses, including ethnic restaurants and small neighborhood grocery stores, have been started by members of Olneyville’s Hispanic community.

Last year, the Metlife Foundation recognized efforts by Olneyville Housing, the Olneyville Collaborative and the Providence Police Department to revitalize the Riverside section of the neighborhood.

Nine acres on one side of Aleppo Street, near the Woonasquatucket River, were reclaimed as a public park and a bike path. Vacant lots and abandoned properties on the other side of Aleppo Street have been redeveloped as an attractive affordable housing development, Riverside Townhomes.

Shea said the late Fred Lippitt and Jane Sherman of the Woonasquatucket River Watershed Council were prime movers behind the bike path and park development, and Struever Bros. Eccles & Rouse, the Baltimore company that has redeveloped many of Olneyville’s mill buildings, organized volunteers to help build the playground at River Park.

Olneyville Housing, with partial funding from the City of Providence, developed the 51 units at Riverside Townhomes. Of the 51 units, 31 are rentals and 20 are available for sale, priced at $104,000 and $140,000. All are income restricted, Shea said. Although the rentals are occupied, 15 of the townhomes are still available for sale to first-time home buyers, and open houses are held there every Saturday from 11 a.m. to 1 p.m.

Today’s market means credit is harder to obtain for first-time buyers and “the climate makes people afraid to buy,” he said.

But despite the faltering economy, efforts continue to revitalize Olneyville, according to Shea.

The United Way, on its recent move from the East Side to Olneyville, where it is leasing space at the Calendar Mills on Valley Street [redeveloped Struever Bros.], announced a $500,000 grant program for special projects in Olneyville.

Shea said Olneyville Housing and Youth Build have plans to renovate the old Polish Social Club building at 66 Chaffee St. And a mixed-use redevelopment is envisioned for the former Paragon mill buildings, which have about 20,000 square feet of space; Shea said Olneyville Housing, with financial help from the city, has an agreement to purchase the buildings.

Olneyville has also been targeted for assistance from Rhode Island Housing’s Keepspace program and the Ford Foundation’s Local Initiatives Support Corp., which supports local community development corporations, Shea said.

Many of the Olneyville houses rebuilt by nonprofit agencies like Olneyville Housing and Youth Build are not listed with real estate agents to keep costs down, Shea said.

On the statewide Multiple Listing Service, just two single-family houses were listed for sale in Olneyville last week, an 1870 Cape-style house at 25 Atwood St. with 700 square feet of living space, two bedrooms and one bathroom, priced at $49,900, and a three-bedroom, one-bath 1945 ranch at 51 Dresser St., with 861 square feet of living space, with an asking price of $145,000.

Seventeen multifamily houses were listed for sale last week in Olneyville, and 14 of them were priced at $150,000 or under. The lowest-price was $64,900, for an 1870 duplex at 178 Manton Ave. The highest price was $180,000, for a two-unit, 1910 house at 14 Bailey Court.

POPULATION:

(Providence, 2000) 173,618

MEDIAN HOUSE PRICE:

(Providence, 2007) $197,000 (median does not include city’s East Side)

INTERESTING FACT:

Olneyville was named for Christopher Olney, a grist mill and paper mill operator who settled in the area in 1785.

cdunn@projo.com