How a Tennessee housing policy concentrates poverty and denies opportunity


A little-known but powerful council runs affordable housing in segregated, poor neighborhoods where black children have little chance of reaching the middle class.

Latoya Akinyemi watches over her youngest children as the warm winter weather allows them to play outside on a Sunday afternoon.

Her 4-year-old son shows off his scooter skills in the driveway, stopping periodically to make sure he has onlookers. His older brother rides his bike nearby, crashes into the grass, and laughs. Akinyemi, who works in medical billing, enjoys living in the quiet Winsdor Pointe housing estate in Whitehaven. There is little traffic to interrupt children’s play and relatively little crime.

But Akinyemi, who grew up nearby, isn’t as thrilled with the surrounding neighborhood. She and her husband see too many teenagers with too little adult supervision and too few constructive outlets, as well as the decline of neighborhood schools.

The Akinyemis and thousands of other Memphians live in neighborhoods with poorly rated schools and low incomes due to policy choices made by a little-known state agency. Under a federal program, the Tennessee Housing Development Agency largely dictates in which neighborhoods affordable housing is built. Over the past 15 years, THDA has awarded just over $2 billion to subsidize more than 200 low-income housing developments across the state, including Windsor Pointe.

Tennessee’s system for determining which developments receive grants makes this an outlier. Of the nation’s 20 largest states, only Tennessee and Florida don’t reward developers for building in middle-class neighborhoods or in neighborhoods with amenities like grocery stores.

Without such incentives, known as low-income housing tax credits or LIHTCs, developers build where land is cheap, test scores are low and poverty rates are high.

In Shelby County, these are almost always majority black neighborhoods. Because the developments have virtually no white residents, experts say the scheme perpetuates racial segregation.

Decades of research — including that of the THDA — show that when affordable housing is built in high-income neighborhoods, it improves residents’ health and economic opportunity.

But in the past 15 years, none of the 18 developments built or renovated with the appropriations in Shelby County are located in such neighborhoods, according to an analysis by MLK50: Justice Through Journalism.

And in recent years, when THDA staff have proposed new policies that would push development toward these neighborhoods, the agency’s board has voted them down. Developers argued that such changes would increase their costs, which could mean fewer apartments built.

The board, which has one black member and five with ties to the development sector or the banking sector, opted to maintain the status quo.

Indeed, the THDA policy directs thousands of Black Memphians to neighborhoods that are segregated and where research shows their children have little chance of reaching the middle class.

The THDA could direct affordable developers to other parts of the city, but chooses not to, said several experts, including Roshun Austin, a prominent community developer. She recently built housing with the LIHTC grant (lie-TEK) in Frayser, where the poverty rate is 42%.

While THDA sometimes talks about the benefits of having people of different income levels living side by side in mixed-income apartment complexes, its LIHTC policies make it question its commitment to economic desegregation.

“’We don’t want (low-income people) in our middle-income areas.’ … [The THDA is] saying it loud and clear,” Austin said.

Where land is cheap

When developers build middle-class rental housing, they place it in areas where they have determined that people want to live. A new apartment building in Midtown or Downtown has become a safe bet to attract tenants willing to pay top dollar, so that’s where the construction is.

For social housing, however, developers’ calculations are radically different.

Developers can only charge rental rates that the federal government deems affordable for low-income Memphis. And with a shortage of quality affordable housing the size of the Grand Canyon, finding occupants is rarely a problem.

In this environment, developers are looking for cheap land, developers and experts told MLK50.

The problem is that the cheapest lots are often found in the city’s less desirable neighborhoods, said Adam Gordon, executive director of the Fair Share Housing Center in New Jersey. One of the biggest tax credit projects of recent years, Crescent Bluff Apartments, is sandwiched between two noisy train tracks and busy EH Crump Boulevard. Two others sit in the shadow of I-55 in Whitehaven.

“(Tax credit developers choose) sites that no one else wants,” Gordon said.

Other states are increasingly forcing developers to build in places where people of means choose to live if they want to take advantage of the tax credits. Massachusetts, for example, places great importance on the quality of nearby schools and proximity to jobs, which has led to LIHTC developments throughout suburban Boston.

“It’s state policy that determines where people have the choice to live,” Gordon said.

Where test scores are low

In interviews with MLK50, advocates for affordable housing in middle-class neighborhoods all pointed to the research of Harvard University economics professor Raj Chetty.

Chetty’s now famous Opportunity Insights research shows a painful link between the neighborhood a child grew up in and how much they earn at age 35. For example, a 35-year-old man who grew up in Whitehaven tends to earn half the income of someone who grew up in more affluent Germantown – even though both had low-income parents. Chetty and other experts call neighborhoods “high opportunity” or “low opportunity,” depending on how well they prepare kids for economic success.

In Shelby County, the median household income is just over $52,000. However, for the past 15 years, the THDA has not provided a tax credit in a census tract in Shelby County where low-income children are expected to have a family income of $30,000 per year at the age 35, according to research. That’s the equivalent of a full-time single worker earning about $15 an hour. Someone who grew up with low-income parents in the Akinyemis area should be making about $20,000 a year by age 35, or about $10 an hour.

The Harvard economist’s work fits with other research that shows economically disadvantaged students have better futures when they attend low-poverty schools, thanks to the quality of the school itself and the benefits of the social network to learn alongside the children of college-educated parents.

“Because of multiple levels of systemic racism … areas of high poverty are often those with the fewest educational resources,” Gordon said.

Before the pandemic halted statewide standardized testing, Tennessee assessed public schools primarily using its Tennessee Value-Added Assessment System.

Here’s how TVAAS (TEE-vahs) works: Using a five-point scale, with five being the best, it measures how well a school is improving the knowledge of its students.

For example, a school that helps a student move from a second-grade reading level to a fourth-grade reading level will score higher than a school that takes a student from a fourth-grade level to a fourth-grade reading level. fifth year. TVAAS is designed to level the playing field between schools in disadvantaged neighborhoods and those in wealthy suburbs.

For example, Westside Elementary, which is in a Frayser census tract where the median household income is just over $35,000, received a 5 in the 2018-19 TVAAS ranking, the most recent year available. In a Collierville census tract where the median is just under $105,000, Tara Oaks Elementary received a 3.

Of the competitive credits THDA has awarded in Shelby County over the past 15 years, 75% have been awarded to projects where the neighborhood elementary school received a 1.

In other words, the state of Tennessee awards these credits to the schools it deems the worst to help students improve.

The developers won

The THDA knows how its LIHTC system can hurt low-income families.

In early 2021, she published five research articles on fair housing. In one, staff members Laura Swanson and Teresa Anderson write that placing affordable housing in very poor neighborhoods, through the LIHTC or other means, “can exacerbate the incidence of poverty by pushing households away from low-income jobs, schools and services, such as broadband access.

In another, researcher Kevin McCarthy, who has since left the THDA, wrote that the lack of affordable housing in high opportunity areas is a major barrier to fair housing in Tennessee and that targeting state programs on “opportunity-rich” areas would expand housing choices for Tennessee families.

In July 2020, THDA staff sent the board a plan that would have rated the projects based in part on school quality, access to public transit, poverty and unemployment rates in the area. surrounding census tract.

“These are the factors real households use to assess housing opportunities,” McCarthy said in an MLK50 email obtained via a public records request.

The developers, however, fought back.

To find out how developers won and why the THDA system may run counter to the Fair Housing Act, click here.

Thanks to MLK50: Justice Through Journalism for allowing us to republish this story.

Jacob Steimer is a corps member of Report for America, a national service program that places reporters in local newsrooms.

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