The Greater Memphis Chamber occasionally publishes contributed blog posts, like this one, from its members. To inquire about contributing a post, please email Director of Communications Ryan Poe.
According to Realtor.com, Memphis, TN was recently rated as the #1 real estate market in the United States, a place where first-time buyers regularly compete with investors for homes. There are an exceptionally high number of renters in the city (54% compared to the U.S. average of 36%) which is also known for its business-friendly environment with three Fortune 500 companies (FedEx Corp., AutoZone Inc., and International Paper Co.) headquartered there, and thousands of other companies making the city their home.
In 2019, Bloomberg ranked Memphis as the #1 metro area in the U.S. for job growth rate over the previous decade and this was before Ford announced its plans to build BlueOval City, a $6 billion electric vehicle manufacturing facility just outside Memphis that will ultimately create more than 6,000 new jobs. Memphis’ future is bright, but the community faces the same critical issue that faces the entire nation – an enormous lack of affordable housing that is growing direr every day.
According to the City of Memphis’ 2020 State of Memphis Housing Report, Memphis has capacity for more than 30,000 additional affordable housing units (those with rents at 60% of Area Median Income or lower). Closing this gap immediately will require innovation, a shift in development approach, and increased stakeholder collaboration via public/private partnerships. These alliances and strategies can be implemented through a variety of methods.
One of those innovative solutions is employer-supported workforce housing. One Stop Housing is currently in preliminary discussions with several large employers in Memphis to replicate this innovative model it successfully originated in Sarasota FL. This model involves local employers partnering with developers to build or renovate affordable housing units specifically for their employees. The employers typically co-invest alongside the developer, in exchange for providing affordable workforce housing for their employees, to improve their recruitment and retention. Once completed, these properties not only provide more workforce housing options in the local area but also reduce blight and typically help spur additional development.
Memphis is well-positioned to implement employer-supported workforce housing. It is strongly recommended that local employers, public officials, and housing advocates explore this as one smart, logical solution for its affordable housing crisis.
A for-profit company with a philanthropic mindset, One-Stop utilizes an inventive business model focused on renovating hotels, malls and other types of properties, and converting them into affordable rentals. In some cases, they build new from the ground up, leveraging vacant land on existing developments where density can be added based on affordability. By acting as both developer and operator, they are able to convert savings into lower rents. Average rents on new developments are all within 60%-80% of the Area Median Income (AMI) range, without the need for additional grants, tax credits, or other governmental subsidies. This leaves the government subsidies to be used for programs that serve extremely low-income families and individuals.