Mark Wright runs Be A Helping Hand Foundation. He’s got long waiting list of large families who need affordable homes with 4-5 bedrooms. These houses were built in 2015 in North Nashville with a grant from the Barnes Fund.

Two years ago the Tennessee Tribune looked at gentrification in North Nashville. This is the 4th in The Tennessee Tribune’s series on Affordable Housing. What are city leaders doing to address the critical lack of affordable housing? What changes have we seen since 2019? What is the current stock of affordable single-family homes and apartments? What is the stock of market rate homes and apartments in Nashville and surrounding cities?

NASHVILLE, TN – Daryl Duffy, 36, has spent his entire life in Nashville. He, his wife, and four kids have been living in a 1200-sq ft. two-bedroom house. They are pulling up roots and moving to Dickson County into a five-bedroom house with three baths.

“That would cost a million dollars in Nashville,” he said.

Nashville is growing fast. Real estate developers are making tons of money. COVID infections are down and the economy is beginning to rebound. But it will take Duffy an hour to commute to COSTCO on Charlotte Pike where he has worked since 2006.

An April 2021 GOBanking study found it takes $84,787 a year for a homeowner to live comfortably in Nashville; $87,115 if you rent. The figures represent the minimal annual “living wage” for basic expenses, “fun money”, and savings.

According to GOBanking, the median household income(MHI) in Nashville is $52,858. Some analysts figure Nashville’s MHI to be about $60,000/yr.

The median is the middle number in a list of numbers, not the average. Whatever estimates you use, they lead to an inescapable conclusion: more than half of Nashville workers aren’t making a living wage.

“The cost to live in Nashville is about $85,000 and the median income is only about $53,000. That $32,000 gap is making the city inaccessible for people who have lived here for a long time,” said Gracie Rule, a graduate student studying community development at Peabody College.

Rule said people with money and high-paying jobs are moving into the city while locals are moving out. Real estate development in North and East Nashville has attracted younger and richer white residents into those two historically Black neighborhoods.

The Tribune’s 2019 housing series on gentrification documented how North Nashville homeowners were selling their modest single-family homes to developers who razed them and replaced them with two tall and skinnies.

Business deals with big companies like Amazon and Oracle will drive up the cost of housing even higher. Amazon and Oracle get subsidizes from Metro government and the state of Tennessee.

“That’s related to policy and it’s intentional,” Rule said.

“Most of the folks I know don’t make $85,000 and most folks coming into the city with these new jobs, do. So what kind of a community are we building if the city is only affordable to them?”

We will talk to Amazon, Oracle, and Metro officials about what they are doing to preserve affordable homes and build more of them.

Housing costs in Nashville are 20% higher than the national average and they take the biggest bite from peoples’ paychecks. Between 2011-2017, rents rose roughly 64% while average wages grew by only 14%, according to the Metro Human Relations Commission.

According to the median home price in April was $337,400, up 11% since last year. The minimum salary to afford a typical Nashville home with payments of $1300/month is between $54,614 and $63,980.

According to the Greater Nashville Apartment Association, the average rent in downtown Nashville is $1929: in Green Hills it’s $1840; average Nashville rent is $1407/mo.

Working a $15/hr. job would take 94 hours just to pay the rent on a one-bedroom apartment in Antioch or Bellevue or West Nashville. You’d have to work another 94 hours to put gas in your car, some food on the table, and clothes on your back. There aren’t enough hours in a week to make a living if you’re a member of the working poor.

According to the Bureau of Labor Statistics, in recent years Nashville’s economy has added about 33,000 jobs like security guard, cashiers, clerks, waiters, and janitors that pay about $15/hr. Thirty-five percent of Nashville’s 352,174 workers make about $30,000/yr. They have jobs but they are still poor.

Most of these frontline workers cannot find housing they can afford in Nashville. That’s why the Duffys are moving out. Households that spend more than 30% of their income on housing are considered cost-burdened. In 2017, 46% of Nashville residents were renters and 49% of them were cost-burdened. Excessive housing costs overburden Nashville renters by more $345 million per year and that is money they don’t spend in the local economy.

Mayor John Cooper’s Affordable Housing Task Force just released a new 39-page report. It found that in 2020 there were about 32,000 affordable units in Nashville. The report projected that Nashville could produce an additional 8,000 units, bringing the total to 40,000 units by 2030.

Red numbers represent unmet need.
Black numbers are estimates of surplus housing at a given income level but they are not really available. That’s because they get used up by people at other income levels.

Here’s the rub: the report projects Nashville will need 53,758 new affordable housing units by 2030. In 2019 the total number of units was 325,455. Given the available financing, there would be a shortfall of about 18,000 affordable units at 120% of Average Median Income (AMI) and additional need for 18,000 affordable apartments at 0%-120% AMI by 2030.

“For lower income households, that means they wind up in unaffordable units. However, because there’s also a gap among the highest earners, you see that dynamic in reverse, as they have the ability to bid up the price of more affordable units,” said Greg Claxton, Metro Planning Department.

In a 2017 housing report, the Metro Human Relations Commission predicted Nashville would need 31,000 units by 2025. Both these projections indicate the housing situation is dire and prospects for substantial change are gloomy.

“This is like Bethlehem and there is no room at the inn for those earning under $50,000,” said Eddie Latimer, a member of the task force. He is CEO of Affordable Housing Resources.

The 23-person committee met weekly for 6 months. It was supposed to examine if current housing tools were effective, study peer cities for best practices, and make recommendations for “significant progress within the next 1-3 years.” Cooper called for a blueprint to solve Metro’s housing crisis but the report does not mention best practices in peer cities or compare them with Nashville.

According to one Housing Task Force member, Nashville lags far behind peer cities like Austin and Charlotte; the Mayor’s proposed housing budget skimps on money and lacks vision.

“This crisis calls for bold investment that moves beyond small tactical steps and what we’ve heard for too long…’a good start, a good first step, a down payment toward helping solve our housing challenges’,” said Kay Bowers, Executive Director of New Level, a non-profit builder of affordable homes.

The report does make many recommendations. It lists 10 High Priority categories and 46 subcategories. One suggestion was to inventory all subsidized rental units, and multi-family units and single family homes and track when their affordability restrictions expire.

“There is no master list that has everything together,” said Greg Claxton. He and Jennifer Higgs in the GIS division created a preliminary inventory of housing data. It had never been done before. They gathered statistics and provided graphic analysis for the report.

Claxton said they relied on census data and databases to get a snapshot of the housing situation. More current data won’t be available until after the 2021 American Community Survey is completed. So the analysis and projections in the report are based on 2019 estimates.

“We very rarely get information on individual units. We don’t know what the square footage is or the number of bedrooms. In the reports we get, we don’t have what the affordability level is,” Claxton said.

The researchers used bits and pieces from multiple data sources to get an overall picture of subsidized housing in Davidson County. Some projections, like Low Income Housing Tax Credits (LIHTC), were based on future estimates (600 units) than the actual current number (425).

Claxton said it was tough to harmonize data from different sources. For example, they were able to get current home sales from the assessor’s office but not the number of home that didn’t sell.  “And we don’t really have any source of data on what a household makes,” Claxton said.

Some data wasn’t easy to pinpoint. “Habitat for Humanity will get funding for 30 units but it’s associated with a single address but technically it’s 30 addresses,” he said.

We will compare market rate homes and apartments with subsidized homes and apartments in the second part of this series.