For years, Memphis has had far too much blighted and substandard housing – single-family as well as apartments.
The mortgage crisis of 2007, followed by the tsunami of foreclosures, made matters far worse. And obviously, the greatest impact has been felt in Memphis’ low-income neighborhoods.
There has been some recovery – blighted homes are being acquired and fixed. However, most of these remain as rentals, driving a transition from owner-occupancy to rental in our communities.
This entire process of foreclosure, abandonment and blight has been incredibly costly to Memphis families. Thousands of families lost homes and the wealth that should have accumulated there.
The Frayser Community Development Corp. (CDC) has made a science out of attacking blight. Our work and research have shown us that, if done intelligently, investing in and mitigating blight is not only good for streets and neighbors, it is good business for the city and county.
Several years ago, Frayser CDC invested $1 million in acquiring and renovating abandoned houses in a concentrated area. We took the worst houses in the area, and turned them into the best. And we studied the impact. We found that our work improved the value of adjacent homes for 500 feet. We found that our $1 million investment resulted in this small area rising $6 million in value – we got a six-fold bang for our buck.
This, in turn, will generate $119,000 in taxes annually. That is a 12% return on our investment to the city and county! Of course, there are other benefits – to neighbors, police forces and schools. Reducing blighted homes will reduce the need for police enforcement and contribute to stable family environments for nearby schools.
The trouble is – Memphis has never invested enough in our fraying neighborhoods. Memphis has always given lip service to the work conducted by CDCs and other developers, but has not made real commitments. The CDCs, and our allies, have fought for years to establish meaningful and reliable funding sources to carry on this work of rebuilding our neighborhoods, and in the process rebuilding our tax base.
After several years of our advocacy, in 2019 the Memphis City Council established the Memphis Affordable Housing Trust Fund with an allocation of less than $1 million for the year. The funds were minuscule, and dwarfed by investments made in comparable cities, but we thought it was a start.
Last year, pressures of the pandemic wiped the fund out. This year, we’re at a crossroads and have some opportunities to meaningfully fund this work.
BLDG Memphis, a coalition of community development corporations and individuals that support the redevelopment of vibrant and economically sustainable neighborhoods in the city, has launched a campaign that calls on the City of Memphis and City Council to continually assess and invest in the Affordable Housing Trust Fund for fiscal year 2022 and every year.
Current funding is two-thirds of a penny from the city’s debt service, which adds up to around $800,000 of permanent funding each year.
In a neighborhood like Frayser, the gross cost of a new build or construction is roughly around $100,000. However, there is a gap in disinvested neighborhoods between cost of producing homes – either renovations or new construction – and the return at sale or rent. That gap is typically about $25,000 per home. With a dependable funding source, nonprofit developers like Frayser CDC can build up to 40 homes per year. As noted, this investment is repaid to the city and county through increased property taxes.
This trust fund, and the work it supports, is not money down the rat hole. It is a wise investment in our neighborhoods, and in the people in those neighborhoods. Properly funded, it will reduce blight, grow the tax base, create jobs and build a stronger economy. It will help to stabilize our neighborhoods, make our communities safer, help our homeowners build equity and attract new residents to our city.
This is not a time to be shy about this work. The city and county must support revitalization of Memphis neighborhoods and invest in our communities. But, that’s not enough. They must be joined by our foundations, corporations, state agencies and others. If you intend to “Build Up Not Out,” this is what’s required.
This article was originally published by The Daily Memphian.