When Chris Dimitri decided to place two small potted trees decorated with Christmas lights outside his South Bronx café last December, friends told him he was crazy.

“Some said the plants would be stolen but then others said it was wonderful to see trees in the neighbourhood,” says Dimitri. “They weren’t stolen and I’ve decided to keep them out there.”

The perception that the Bronx is a crime-ridden ghetto riddled with gangsters and drug addicts stubbornly persists among the many New Yorkers who never venture beyond Manhattan unless it is to take a taxi to the airport.

The Bronx became indelibly linked to Tom Wolfe’s novel The Bonfire of the Vanities when it was published 20 years ago. The urban tale recounts the woes of Sherman McCoy, a white Anglo-Saxon protestant banker who takes a wrong turn and becomes embroiled in violent racial strife.

But New York City has changed immeasurably since the novel’s debut. Crime has plummeted and there has been a real estate boom. Both now mean that even previous no-go areas such as the South Bronx are attracting the kind of attention unimaginable a couple of decades ago.

The neighbourhood even has its own appellation that echoes other trendy areas in New York such as TriBeCa (Triangle Below Canal) and SoHo (South of Houston). It is called SoBro – short for South Bronx – by those in the know. The Bronx borough covers a wide geographical space where seemingly every ethnic group is represented. Newcomers including artists, yuppies and real estate developers have concentrated on the southern area and, in particular, the bottom tip, which is almost surrounded by water and is only one subway stop away from the island of Manhattan. The Empire State Building and Midtown’s skyscrapers hover on the skyline.

“In five years the South Bronx is going to be a very hip, urban area that will have a healthy mix of middle, moderate and low-income [housing],” Adolfo Carrion, Bronx borough president, said late last year. “As people gain confidence that things are moving in the right direction they will invest.”

Dimitri did not need the borough president’s exhortations to invest about $300,000 in his café. After 20 years working as an executive in the airline business, including for TWA, he decided to turn his cooking hobby into a business venture and open a café.

He had read some articles about artists in the South Bronx and consulted his son, Alexander, who told him to “go for it”. Last July, he opened Alexander’s Café named after his son but also, by serendipity, on Alexander Street.

“We’ve become an Ellis Island for artists. People come here and find they can exchange information about apartments or professional opportunities and we have a steady clientele,” says Dimitri.

Alexander’s, a sleek and modern eatery that specialises in “nuevo Mediterranean food”, at first appears an unlikely sight. There are a number of antique shops on the street – packed at weekends with visiting Manhattanites in search of a bargain – but many other stores, warehouses and land lots remain empty. Nearby are the Third Avenue and Willis Avenue bridges, which cross a narrow sliver of the Harlem River. There are plans to construct a new bridge that would make it only a short walk to the green spaces of Randall’s Island, which in places is only 25 feet away.

Rewards are to be had now for those willing to give the Bronx a chance. Christian Braun, who is British, and Rosa Riera, his Spanish wife, moved to SoBro from Manhattan’s Upper East Side last May. Their two-bedroom, two-bathroom apartment is twice the size of their old home and costs only $1,800 a month to rent. “There are lots of foreigners and artists here who aren’t put off by the connotations that the Bronx has for other New Yorkers,” says Riera, who has a 25-minute commute to her corporate communications job at Siemens in Midtown. “There aren’t that many shops nearby but at least you don’t see the same chain stores as everywhere else.”

They both like the feeling of living in territory that is uncharted, at least for yuppies. “After monitoring the crime figures for a few months we felt reassured enough to move into the area and we’ve never felt threatened even though we’re obviously outsiders,” says Braun, who runs a sovereign wealth fund news service.

Interest in the Bronx has been widened out to some high-profile, big-buck developments, most notably the $800m baseball stadium that is under construction. “There are some people who would specifically choose to live near the Yankees,” says Sharon Behnke of estate agency Citi Habitats.

Also being built nearby is the $500m Gateway Centre at the Bronx Terminal Market, which will provide shops and restore public access to the Harlem River waterfront. And there is the Hub Retail and Office Centre, a $56.7m mix-used complex. Both these projects are led by Related Companies, a privately held developer, which recently received debt and equity investment from the investment arm of the Abu Dhabi government among others.

Daniel Burnham, a doctor, moved from Manhattan’s Lower East Side three years ago. He paid $100,000 for a two-bedroom apartment, that is now worth around $250,000. “I sometimes miss being able to walk to places but don’t regret it for a moment,” he says. “There’ve been tons of changes and there’s more diversity in the people living here. Thirty years ago this was a Jewish neighbourhood, then predominantly Hispanic and Black and now you find lots of other kinds of people moving in.”

While developers and investors wait to see how hard the current credit crunch and wave of repossessions will hit the property market, residential projects are also forging ahead in the hope that New York will escape lightly compared to other parts of the country.

Bronx Bricks is a condominium project at a five-storey former print factory at East 140th Street near the Mott Haven Historic District. Apartments cost between $395,000 and $795,000.

One already-completed and sought-after conversion is the Clock Tower, a former piano factory, although the vast ground floor remains to be utilised, probably as a commercial space.

Would-be residents in SoBro complain about a shortage of properties and developers have yet to fill a gap at the higher end of the market.

“People were afraid of gentrification but now they know it’s needed to create a mix and prevent balkanisation,” says Philip Morrow, president of the South Bronx Overall Economic Development Corporation, who was responsible for housing at the Harlem Urban Development Corporation.

“Harlem, just on the other side of the river, is very hot right now but the Bronx is much more affordable,” he says. One of the group’s residential projects is the Gateway Building, a former bath house that is being converted into apartments and is highly visible from the road when entering the Bronx. Its plan is to place a huge sign on the side of the building saying “We’re welcoming you to the South Bronx”.

Behnke a long-time resident of the Bronx, has charted the area’s rise. “Washington Heights and Innwood [in northern Manhattan] were big in 2007 and now it’s the Bronx. Our Bronx internet listings get more and more hits every day,” she says.

Overall, there appears to have been remarkably little tension between newcomers and long-time residents.

Future Sherman McCoys have much less to fear.

Local agents

Citi Habitats, tel: +1 212-685 7777; www.citihabitats.com
Massey Knakal, tel: +1 212-696 2500; www.masseyknakal.com

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