Study: Affordable housing elusive in Tennessee

A key pillar of the American Dream is increasingly out of reach in Tennessee as housing costs swell and residents face a greater shortage of affordable homes than in most states, according to new research.

The state’s housing challenges are detailed in a report released Tuesday by ThinkTennessee, themoderate public policy research organization, and the Tennessee Housing and Development Agency.

The state ranks 34th in the nation for adequate affordable housing supply. It needs 133,581 more low-cost units to address the issue in the poorest communities, according to the report.

“This is a problem that affects Tennessee families as a whole – even if you’re not one of those families that struggles to find affordable housing,” said ThinkTennessee President Shanna Hughey. “If your child is in class with kids who don’t have housing stability, it’s hard for the classroom as a whole. It really is a hard thing for a child with insecure healthcare or food.”

This report was released during election season to highlight the issue for policymakers.

Working-class families have to spend a higher percentage of their income than they did a decade ago to keep a roof over their heads as wages have stagnated.

The result is that low- and middle-income residents are increasingly strapped for food, health care and other basic living expenses.

“About a quarter of renter households in Tennessee are extremely low-income,” the report states. “Hundreds of thousands of Tennesseans must spend more than a third of their income on housing.”

Extremely low income residents are those who earn 30 percent of the median income, which is $61,644 a year in Tennessee. Full-time minimum wage workers can only comfortably afford $377 monthly rent.

But low- and middle-income residents are also giving a higher share of their paychecks to housing costs compared to a decade ago, the report found.

The result is a 3 percent decline in home ownership across the state from 2010 to 2015, according to the report. Still, two out of three Tennesseans own their own homes – on par with the national average.

The state’s median housing price went up $20,000 in the past 10 years, with the greatest surges in Knoxville, Memphis, Nashville and Chattanooga, respectively.

The number of affordable rental units is declining too.

“The proportion of Tennesseans burdened by the cost of rent increased significantly between 2007 and 2016 across all income levels,” the report states. “Eighty-five percent of extremely-low income renters are cost burdened with housing expenses that exceed 30 percent of their income.”

There are 45 available affordable rentals for every 100 extremely low-income residents.

“Our goal right now, in campaign season, is to give would-be policy makers a menu of options that they can consider for their campaign platform,” Hughey said. “Land banks are working in Georgia. Our role is to shine a light on what’s working in other states.”

Land banks are collections of vacant, abandoned or tax-delinquent properties by local governments and non-profits designated for low-cost housing. There are 15 land banks in Georgia but Tennessee currently restricts them and there are only three in the state.

Another solution offered in the report is shared-equity programs such as community land trusts that provide belowmarket-rate mortgages. Statewide legislation creating tax incentives for private developers is also encouraged in the report.

Reach Sandy Mazza at smazza @tennessean.com or 615-726-5962 and on Twitter @SandyMazza.