Podcast: Mayor Touts Housing as Foundation of Memphis Growth Strategy

On the latest episode of NAHB’s podcast, Housing Developments, COO Paul Lopez and guest host Karl Eckhart, NAHB VP of State and Local Government Affairs, welcome Mayor Paul Young of Memphis, Tenn. Young highlights key housing programs the city has kicked off to work toward the city’s goal of creating 10,000 housing units in the city’s core by 2030.

“When you look at all of the things that make a city work, the thing that makes a city special, having a quality place for residents to live is at the foundation of it,” Young shared.

He added: “Whether we're talking about strong schools, a growing economy, cultural vibrancy, quality of life, it starts with housing as the foundation, as a centerpiece for neighborhoods and communities.”

“Build Up, Not Out” Strategy

Memphis covers more than 300 square miles with roughly 615,000 residents, creating a large service footprint. Adding residents to established areas supports more efficient delivery of roads, police, fire, parks, libraries, sanitation, and other city services.

But this approach is not without challenges.

“The areas that we want to populate are the older parts of the city. And so, as you can imagine, there are infrastructure challenges,” Young stated.

In addition, there is often an appraisal gap. In some historically underserved neighborhoods, acquisition and construction costs can exceed the finished property's appraised value. For example, Young noted, a buyer may spend roughly $200,000 to acquire and improve a property that may appraise for only $150,000.

The city is also focused on creating neighborhoods with a broader range of incomes.

“As much as we need affordable housing, what we wanna do is make sure that we're not recreating some of the challenges we had in the past where we had islands of poverty, where we concentrated poverty into singular areas,” he explained.

Programs and Tactics

Memphis is attacking the housing challenge on three fronts:

1. Regulatory reform: Making zoning more supportive of infill and “missing middle” housing types such as duplexes, triplexes and fourplexes.
2. Financial incentives: Using tools such as Tax Increment Financing (TIF), Low-Income Housing Tax Credit (LIHTC), New Markets Tax Credit (NMTC) and other forms of gap financing to make projects financially feasible.
3. Developer capacity: Training and supporting emerging developers who are willing to invest in neighborhoods that have seen little development.

Creating what Young calls “a whole army of individuals that want to build in these neighborhoods” adds an additional drive that is not often present in traditional deals.

“For people that are from the neighborhood, that have been in these communities, that have a love and affinity for those communities, [and] are rebuilding those neighborhoods, it generates so much energy and excitement and pride,” he explained.

What Will Success Look like in 2030?

Memphis has already made notable headway toward its 10,000-unit goal, with about 3,400 units already completed — which includes both renovated and new construction. But the effort is more than just creating housing supply. It’s about creating community for everyone in Memphis.

“The reason that we're doing this, obviously, is to get quality housing, but the most important thing we're trying to do is build up community, build up neighborhoods, enhance the quality of life for our residents,” Young stated.

For more on Memphis' housing strategy, check out the full episode above, on YouTube or wherever you listen to podcasts.