Photo by Alexis Marshall / Assistant News Editor
The National Low Income Housing Coalition recently released its annual Out of Reach Report, which compares minimum wage to housing prices within each state. This year, Tennessee was ranked more affordable than most states and was listed as the 38th most expensive state out of 52, including Puerto Rico and Washington D.C. Despite this, not a single state met the benchmark for housing affordability. In this report, the definition of affordable is a modest two-bedroom apartment that costs no more than 30 percent of an employee’s gross income. If you are in a position of struggling to afford the home you are living in then you might like to use comparison sites to ensure your bills are as small as possible. IF this interest you then you can compare energy at Simply Switch. But there is so much that still needs to be done to improve housing affordability.
The report also breaks down housing affordability by regions within the state. Since 2011, Rutherford, Williamson and Davidson County have consistently been among the most expensive in Tennessee .
Tennessee’s minimum wage is $7.25 per hour, the same as the federal minimum that has been in place since 1991. At that wage, the report states that an employee in Davidson County would need to work 102 hours per week in order to afford rent. Even to afford the average one-bedroom apartment, the report states that minimum wage earners would need to work 83 hours per week.
According to the report, in order to afford a one or two-bedroom apartment, employees must earn $15 per hour or $18.44 per hour respectively.
While low-rent options are available throughout the state, demand is significantly higher than supply, according to Ralph M. Perrey, the executive director for the Tennessee Housing Development Agency.
THDA is the state housing finance agency. It helps first-time homebuyers get mortgages, and with these mortgages, they’ll be able to find their dream home. Of course, hiring professional real estate agents from places like Upnest, (click here for more information), will allow them to find a house that is at the correct price for what they can afford. And when they have a mortgage, this will be particularly important. Using profits from those mortgages, it finances other projects like low-income housing developments.
Perrey described some of the challenges specific to working in Nashville and the surrounding area.
“Nashville has become a very popular place, and supply and demand is what drives rent,” Perrey said. “When a lot of people want to live in an area, the price of housing across the board goes up, and that is seen in sharply increasing rents.”
He said that THDA uses tax credits and bonds to create grants that encourage developers to invest in affordable housing. This increases the supply of affordable housing to meet the booming demand. However, he said this housing is still more affordable for those earning between $11 and $13 per hour.
When it comes to affordable housing for those making the bare minimum, Perrey said the situation is difficult.
“Probably the most impactful thing we can do for the very lowest income Tennesseans is make sure that the public housing stock can accommodate them,” Perrey said.
Danielle Nix works as a cashier at Publix and makes $10 per hour. The New Orleans native moved to Nashville in the wake of Hurricane Katrina and has lived there ever since. She is an amputee and provides for herself and her teenage son through Urban Housing Solutions, which provides her with a low-rent apartment. Nix said she can’t imagine living in Nashville on minimum wage.
“I assume it’d be hell,” Nix said
Perrey said that some minimum wage earners will qualify for housing choice vouchers, which are allocated by the federal government. Others will rely on public housing projects and non-profit housing agencies.
Urban Housing Solutions manages over 30 properties in Nashville and also connects residents with support services for drug addiction and health advocacy. The agency is looking to double its capacity in the coming years according to their director of fundraising and communications, Deb Daugherty. She said that some of the money to achieve that goal will come in the form of grants, but $30 million will need to come in the form of donations from the Nashville community.
Another issue for affordable housing is the price of land near Nashville, according to Perrey. If you were wanting to look further afield for affordable homes, why not try Castle Rock homes? They have a huge range of properties just waiting for someone to move in.
“As land becomes more expensive, it gets harder to put an affordable property on an expensive piece of land,” he said.
Perrey said that even with tax incentives to build, Tennessee tax codes can cancel out the economic benefits of building affordable housing.
Although cities across the country have independently increased their minimum wages, Nashville is not likely to do so. Mayor Megan Barry has said she supports an increase in the minimum wage for Nashville. However, she said that in order for that to happen, the state legislature would have to change its policies, which currently restrict municipalities from raising the minimum within their jurisdictions.
With significant pay increases unlikely, Nashville’s Metropolitan Development and Housing Agency has made efforts to better serve the growing low-to-moderate income population. Resources on property management on issues such as cash on cash return has also helped the local populace understand the assets that some still own without renting, whilst giving others perspective on the rental situation and the means to take some level of control over it. Perrey cited some projects that are making progress.
“Nashville’s whole Envision Cayce Project… that’s going to increase the number of units, really redevelop that whole area and increase the supply of affordable housing,” Perry said.
Perrey also noted that the new developments in Nashville are of a higher quality than one might traditionally associate with affordable housing. He referred to the Laurel House Lofts in the Gulch district of Nashville. The income-restricted apartments are well-built in a trendy part of the city. However, they are on a three-to-four-year waiting list at the moment.
For those who do find affordable housing, Nix said it is invaluable.
“Affordable housing is exactly what it’s meant for. We don’t have the things we really want,” Nix said. “It’s a blessing to have somewhere to stay though.”
With rising housing prices and more people relocating to the city each day, there may not be a clear or easy solution for Nashville’s affordable housing crisis. For those earning minimum wage and looking for affordable accommodations in Nashville, Perrey said”(it’s) always going to be a challenge.”
To contact News Editor Andrew Wigdor, email newseditor@mtsusidelines.com.
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