Nashville’s popularity and real estate boom are leaving low- and moderate-income renters behind.
Estimates that as many as 100 people a day are moving to Music City mean that the supply of affordable and workforce housing is disappearing.
Property owners can raise rents to charge market rates or use the dwellings as short-term rentals, which benefit visitors but not residents.
That puts a squeeze on tenants’ budgets and leaves them vulnerable to eviction and displacement from their neighborhoods.
This is an especially acute problem for low-income renters who receive federal Section 8 rental assistance because landlords have little incentive to lease to them in a hot market.
They are among the most cost-burdened people who are working in low-paying jobs, such as, custodians and caregivers, and are being driven out of the urban core and even out of Davidson County, pushing them farther from jobs, public transit and community networks.
Changes in ownership and renovations of apartment units across town have, in some cases, doubled rents. While apartment units are being built in Nashville, — just look at all of the cranes — they are appealing to the higher-end renter.
“Nashville was known for its housing affordability,” said Metro Planning Director Doug Sloan, whose office is among the agencies working on the affordable housing crisis in Nashville because he knows that is no longer the case.
Census data show the gross monthly rents used to average $872 between 2011 and 2015. In January the website RentJungle reported that figure had ballooned to $1,401. That’s an increase of more than 60 percent in six years.
“Basically people can’t find a place,” said Jim Fraser, a Vanderbilt University associate professor and affordable housing researcher and advocate. “One of the problems is that all the rentals that are being built are for market rate.
“The extent of the problem is that now we see people moving out of the county,” he added. “Places like Antioch and Madison are becoming unaffordable for people who are moderate-income families.”
One-third of the Nashville region’s residents are renters — close to the national average of 36 percent, per census figures. Like the rest of the United States, the homeownership rate is dropping.
New census data released Tuesday show the U.S. homeownership rate fell from 62.2 percent in 2015 to 61.9 percent in 2016, a 50-year low. In the Nashville-Murfreesboro-Franklin metropolitan statistical area (MSA), the number fell from 67.4 percent to 65 percent.
Meanwhile, the number of renters has grown by 9 million nationwide in the past decade, according to Harvard University’s The State of the Nation’s Housing 2016 report.
“The rental market continues to drive the housing recovery,” the report states.
Factors including foreclosures, short sales and anemic wage growth have limited buying options for homeowners, who may be reluctant to borrow money at a high interest rate because of poor credit. In addition, millennials are not buying homes until they are in their 30s.
There are 1.6 million renters making at least $100,000 a year, who are more attractive than lower-income renters.
“There’s very little new affordable housing being built (in Nashville),” said Bill Freeman, chairman of Freeman Webb, which manages apartment buildings in three states, including Tennessee.
“That’s not just what people build. If they build new property, they want it to have all the bells and whistles, and, by definition, it’s not affordable,” he said.
Those include apartment units at 505, which will be downtown Nashville’s tallest high-rise building. Units will be available in October, and rents are for $2,200 to $6,300 per month.
The Harvard study notes that for the typical renter who make $35,000 a year, even the national rent average of $1,381 per month is “well out of reach.”
The report said of those earning less than $15,000 a year in the Nashville MSA, monthly housing costs averaged $680, but 70.8 percent of these renters faced severe cost burdens. For those earning between $15,000 and $30,000, monthly housing costs were $780 and 32.1 percent faced severe housing burdens.
Last year a community of Burmese immigrants at Edmondson Manor in South Nashville were forced out because of post-renovation rent increases. One-bedroom apartment rents rose from $675 to $899, and two-bedroom rates increased from $775 to $999.
Howe Garden Apartments in East Nashville, which rebranded as Eastwood Green Apartments, is charging $1,149 to $1,549 a month in rent – twice as much as before renovations last year, displacing working-class creatives and social workers.
A tough set of circumstances drove Kennetha Patterson out of Nashville nearly 35 miles west to Chapmansboro in neighboring Cheatham County.
In 2016 the 34-year-old working mother of five got sick, her husband had been in prison and she got behind on the rent by one month.
Patterson, a native Nashvillian, received a 14-day eviction notice.
“I always thought if you got put out that fast, you did something wrong,” she said. “It was so traumatic to find something else because not all people believe in a second chance. They really hold it against you if you have an eviction.”
The family was forced to leave the rapidly growing and changing Edgehill community near downtown.
“I think my neighborhood outgrew me,” Patterson said. “That’s the best way I can put it. I experienced gentrification at its finest.”
Although she describes her new commute as a “downfall,” she is able to afford a four-bedroom house with three bonus rooms. Her husband, Quentin Patterson, is now reunited with her and their children, Ayana, 16, Jaquan, 15, Myasia, 11, Kalanni, 7, and Zynovia, 4.
For $1,400 a month, in Nashville, she could have afforded only a two-bedroom apartment.
“It ended up a being a good thing on my end,” she said. “It’s a blessing in my family.”
However, longtime residents are losing out on Nashville’s growth, she said.
“I’m not opposed to growth at all,” she said. “I’m a person that fully believes in growth. It’s just, take care of your people who are already here.”
Meanwhile, 57-year-old Louis Johnson, a playwright who lives in Five Points in East Nashville, is hoping to stay in his apartment, as the caregiver to his wife.
They moved from Boston nine years ago for better weather, but now Nashville rents are starting to match those up north.
Johnson’s monthly rent recently rose from $465 to $490 and he is feeling strapped.
“This is supposedly affordable housing,” he said. “I don’t think they’ll keep it affordable.”
Tenants have complained that they are blindsided by rent increases. They say if they complain they are threatened with eviction.
That has led to protests by housing advocates in areas like Edgehill, “Tenants Rights 101” courses by advocates and a move to create a tenants union in apartment complexes across Nashville.
Austin Sauerbrei, organizer with the Edgehill Neighborhood Partnership and Open Table Nashville, is one of those leading the effort to create tenant unions, which are present across the nation from Seattle to Philadelphia.
The purpose is to organize residents to ensure that landlords are meeting their part of the bargain of leases on repairs, fairness and information, especially as it involves a potential sale or rent hike.
“What we’re finding is that tenants aren’t finding out what’s going on,” Sauerbrei said.
Other potential solutions include community land trusts, as recommended by Fraser, the Vanderbilt professor, as a means to get nonprofits to develop and manage affordable housing for the public.
At a Feb. 2 community meeting at the Watson Grove Baptist Church in Edgehill, eight nonprofit groups presented to neighbors the concept of community benefits agreements.
“Development is democratized” was the message in a crowd that is leery of developers because they see neighbors being forced out of their homes due to affordability issues.
Even the prospect of a potential soccer stadium coming to the Nashville fairgrounds area scared some people, who feared that would drive out lower-income residents.
The attendees split up into groups to talk about their concerns and their wants, which included better libraries, full service grocery stores and more opportunities for work.
The message from the first group’s spokesman, though, reflected the fears many residents have: “If we can’t live in the neighborhood, then what we’re asking for really doesn’t matter anyway.”
The Tennessee General Assembly is stripping tools from cities like Nashville to deal with issues of poverty and affordable housing. Since 1996 cities have been prohibited from enacting rent control policies.
During the past two years, lawmakers have nullified a voter referendum to require that 40 percent of construction workers on Metro projects live in Davidson County and nixed a city’s ability to mandate inclusionary zoning, requiring developers to set aside a certain number of units for affordable housing.
Even a voluntary inclusionary zoning program, which is set to go into effect this year, is in the crosshairs of lawmakers (House Bill 1143/Senate Bill 363).
And legislators also are proposing to restrict cities’ power to regulate short-term rentals (House Bill 1020/Senate Bill 1086), an issue affecting many other communities nationwide.
Asked about these proposals at the Tennessee Press Association luncheon Wednesday, Gov. Bill Haslam, who once served as mayor of Knoxville, said: “If the state is going to act there should be a compelling interest. The decisions should be up to the locals. Housing is at the root of solving so many problems.”
Cities like Nashville want to ban or put a moratorium on investor-owned short-term rentals in residential neighborhoods because of noise and nuisance complaints and concerns that they are driving up the cost of housing.
Of the 2,659 short-term rental permits issued as of Wednesday by Metro, 43.4 percent are investor-owned.
At the same time, there were 596 permits — or 22.4 percent of the total — issued to multifamily (i.e., apartment) short-term rentals.
Those are units that will not be available to people seeking a home.
Solutions like Envision Cayce, the Metro Development and Housing Agency plan to build mixed-income housing at the James A. Cayce Homes public housing development in East Nashville, are years away.
There’s a serious problem right now, and that includes a roughly 10,000-person waiting list for Section 8 rental assistance vouchers in Nashville. MDHA is presently not accepting new applications.
While renting has become more expensive in Nashville, homeownership is still the way to build wealth and avoid severe changes in monthly housing costs.
There are efforts afoot to help people afford a home even in this booming market.
On Feb. 8 Nashville Mayor Megan Barry and Tennessee Housing and Development Agency Executive Director Ralph Perrey announced a $15,000 down payment assistance program for first-time homebuyers who purchase homes in areas that did not fully recover from the Great Recession, like Bordeaux, Whites Creek, North Nashville and Southeast Nashville.
On Feb. 15 real estate investor and developer Bruce McNeilage delivered the keynote address to the Tennessee Affordable Housing Coalition monthly meeting at South Inglewood Park’s community center.
“The American dream is getting tougher and tougher to live,” he told the audience.
McNeilage is a pioneer in affordable housing projects, having owned and later sold Jefferson Manor Apartments in North Nashville, Charlotte Manor Apartments in West Nashville and Landmark Apartments in Columbia.
He is developing Solo Lofts, a 110-unit condo project on Dickerson Pike in East Nashville, which will sell for $99,000, $199,000 and $299,000. Groundbreaking is scheduled for later this year, and the condos will be available in 2018.
“The biggest blessing Nashville has right now is its biggest crisis. ‘It city’ real estate values are up,” McNeilage said. “If you don’t buy a house or condo right now, you’re not going to get on the train.”
Photographer George Walker IV contributed to this column.
Edgehill homeowners have choices to make as developers move in.
This is the second in a series of monthly columns on growth, housing, displacement and the future of Nashville’s neighborhoods.
Opinion Engagement Editor David Plazas and photographer George Walker IV are telling the stories of the community and individual residents.