ARTICLE: Cuts deepen housing wound: 'It’s a really difficult place to be at right now'
This article was written and originally published by the Nashville Business Journal.
For every 10 new jobs created the past decade, six new homes have been built in Tennessee.
That's according to a policy brief released by ThinkTennessee, a nonpartisan think tank.
And while it's no question Tennessee has a critical shortage of housing, the solutions remain a little harder to define, but that isn't stopping housing leaders like Maria Catron, Amy Schaftlein and Danny Herron from talking about it. The three gathered for a panel on March 26 to discuss the effects of past, present and future legislation on affordable housing initiatives in Tennessee.
There, they were asked questions on how recent federal cuts have impacted them, where they're seeing the greatest pressures and how developers can streamline permitting. The following has been edited for length and clarity.
Maria Catron, executive director, Oak Ridge Housing and Redevelopment Authority: We were looking at building a net zero community and we had identified funds through the greenhouse gas initiative program. Funds are embargoed, that's left a $3.5 million gap in our project. We're going back to our partners looking at other avenues to try to fill that gap but it's pretty substantial. We were at the stage of issuing permits. It's a really difficult place to be at right now.
Amy Schaftlein, executive director, United Housing Inc.: I was getting a lot of calls from board members, others in the community about, "what does this mean for your home program?" We had five houses under construction at the time. A lot of those funds that we have were already appropriated to either the city or the state. We were told those wouldn't be affected. It's kind of a wait and see on my part for now.
Danny Herron, president and CEO, Habitat for Humanity Nashville: There are 1,000 Habitat affiliates across the country, and they've gotten [funding from] the greenhouse grant. They're having to look at that. We do get some federal funding, but we are so fortunate to get the state and the Barnes Housing Trust Fund local. It's not impacting us at the same level as some of the cities where the state's not as financially a strong position as Tennessee and their cities are struggling. Their funding is drying up very quickly.
Schaftlein: The cost to live is just too much. ... Wages are a big issue and the pressure is on that rental market where you don't have the starter homes. Another challenge that we've seen is in the investor market, especially in our single-family rental, a lot of the starter homes that we had are rental homes now. ... We can't compete with the cash buyers and so if we can get in there, then we can help combat some of the single-family rental investors.
Catron: The issue that we have is affordable housing stock. We have folks with vouchers that can't utilize the voucher because there is not an available unit that will pass housing quality standards and will be in the affordable market. For Oak Ridge, they have forecasted a 25.6% inflationary rate in the rental market. It's the highest rate in the state.
Herron: In the old days, I could build a house for $220,000 or $240,000. Today, that house because of land cost, is now costing us $275,000-$300,000. ... To maintain affordable housing units, the stipulations are now putting on almost all grants requiring 30 years for affordability. How do you continue doing that when there's starting to become a growing gap from what it's going to cost me to build it vs. what I can sell it for. Who's going to pay for that gap?
Catron: In our area, it's dirt. Affordable dirt. It's just not there. Just getting ahold of available, affordable land is the start for us.
Schaftlein: For us, we have the land utilities in bringing down the cost of infill development. The permanent financing is really hard to find in Memphis, especially for the homeowners, qualifying folks, it takes a lot of time. Emerging developers can't get access to financing. They will do more if they can find the financing.
Herron: The only way you're going to solve the numbers game is density. Big density. Going back to advocacy, you're going to have to have council members support some pretty extreme density and without great transportation in Nashville, that's a hard sell.