Posted inSeparated By Design
Why does the state keep decreasing Memphis' share of housing subsidies?
Governor's rural focus means less money for Shelby County
by Jacob Steimer April 11, 2022 April 11, 2022
A view of the playground at Crescent Bluff Apartments in South Memphis and the railroad that runs alongside it. Photo by Andrea Morales for MLK50
In 2013, about a year after becoming executive director of the Tennessee Housing Development Agency, Ralph Perrey told a THDA committee he wanted to become more involved in the Low-Income Housing Tax Credit program.
In doing this, he said one of his priorities would be to "insure (sic) fair distribution of tax credit projects across the state and give smaller places a fair opportunity to compete," according to minutes from the committee meeting.
By "tax credit projects," Perrey meant rental housing built with the help of the multi-million dollar federal tax credits that the state gets to award where it chooses.
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Ralph Perrey
In the seven years prior to that meeting, Shelby County had received 16% of the state's allocation of its "competitive" low-income housing tax credits — those that are the most profitable for developers and therefore the most sought after. For comparison, Shelby County is home to about 18% of the state's residents living below the poverty line and 14% of its total population.
In 2014, the year following Perrey's statement, the rules for the LIHTC program stopped prioritizing proximity to services such as libraries, gas stations, parks, pharmacies and grocery stores – a standard that disadvantaged rural projects. In the years since, THDA awarded Shelby County projects 10% of the competitive credits — a shift that cost the county about $84 million in tax credits that would have incentivized hundreds of millions of dollars worth of housing.
More important than Perrey, though, has been Gov. Bill Lee, according to Phyllis Vaughn, whose company serves as a consultant on many of the LIHTC projects built in Tennessee.
Lee's first executive order in office instructed every state department to better serve the state's rural residents — instructions that THDA took seriously, she said. From 2019-2021, Shelby has received 7% of the state's credits, which is half of its per-capita share.
When asked in 2021 why Shelby County's share seems low — given both its population and poverty rates — Perrey said his goal is for every county to be able to compete, not for counties to receive a per capita share.
"(Shelby) is getting as much as is reasonable," Perrey said. "We can't send it all to the big cities."
Mike Hedges, chairman of the THDA board from 2019-2021, agreed with Perrey.
Archie Willis
"There's a very strong need all across the state," he said.
Archie Willis, a prominent local affordable housing consultant, sees things differently. Finding affordable apartments in Shelby County is harder than housing advocates and renters can remember, and developers of affordable housing are facing inflation in construction costs, outdated sewage lines and highest-in-the-state property taxes.
"We do not (get our fair share)," he said. "We need as much help as we can get."
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Tagged: economic justice, Housing, Memphis, Poverty, Racism, separated by design