When Shameka Nevonia lost her job of 10 years in February, she was able to cover her rent by pulling from her retirement account.
The 43-year-old found a job as a probation officer in Memphis in June. At about $30,000 a year, it paid less than half of what she made working for Boar’s Head, but it was enough.
However, when she learned that same month that her home for the last three years, The Luxe of Southaven Apartments, was raising the monthly rent on her two-bedroom unit from $900 to $1,300, she knew she couldn’t make it work.
To avoid the 44% increase, she started looking for a new apartment for her and her son, but struggled to find something she could afford.
“Everywhere I tried, the rent is sky high,” Nevonia said. “It’s never been that way.”
Nevonia was caught in a national trend hitting Memphis-area residents harder than most: fast-rising rental rates. This trend is forcing her and many others to move or spend more than the recommended share of their income on rent. If the rise continues, it could cost the city its prized status as one of the nations’ most affordable places to live.
Before the pandemic, rates in the eight-county Memphis metropolitan area had been rising slowly — by 2% in 2017, 5% in 2018, and 4% in 2019, according to research from Apartment List. They stayed even during the first half of 2020, before rocketing skyward in the last 15 months.
But between September 2020 and last month, the median apartment rent in the region rose by 19%, while the national median rose by 15%, the Nashville metropolitan area’s rose by 18%, Little Rock’s rose by 11% and Louisville’s rose by 7%, according to the Apartment List data.
The rocket is being fueled by many elements, according to local and national experts. A fiercely competitive for-sale housing market, few new apartments being built and an increase in apartment renovations locally are all factors.
Amin Zaki, a local landlord who owns numerous apartment properties in Downtown, Midtown and East Memphis, said most of the increase is likely driven by the uptick in renovations. He hasn’t tried to push his rates much, except at properties that the Shelby County Assessor of Property office decided were worth “dramatically” more than they were in 2017, during the 2021 reappraisal. At those properties, he felt forced to renovate, then hike rents, to be able to pay his debt on the buildings.
Aisha Raison is glad Zaki hasn’t been significantly raising rents everywhere; she rents a two-bedroom unit at his Helix at the District property for $925 per month. She worries, though, that it’s a matter of time before she can’t afford her home of five years, given the fast-rising rates at nearby buildings in the Medical District. And recently, the building’s previous owner renovated a three-bedroom apartment in her building and listed it for lease at $1,900 per month.
“If my rent goes up (to more than) $1,000, not only will I not be able to afford it, a lot of people (here) won’t,” said Raison, a photographer and material handler. “I’ll have to find a place in the next year to make sure I have an affordable place to stay.”
Along with apartment renovations, the Memphis metropolitan area had the nation’s highest rate of home flips — which can also increase rental rates — in 2020, according to Bankrate. This has forced many Memphians to pay more in rent or move. It’s not an entirely negative outcome for the city. Neighborhoods other than Downtown and East Memphis have long struggled to attract investment, which has led to low property values and the highest property tax rate in the state. And, when investors renovate homes in uninhabitable conditions, they help alleviate the city’s plague of roughly 13,000 blighted properties.
Still, Memphis Tenants Union organizer Alex Uhlmann said the city needs to be doing more to help renters, such as buying property to lease to residents affordably like Germany’s largest city recently did. He finds it “misplaced” that Memphis has multiple programs to help people buy homes but none to help tenants, when the majority of Memphians — and, especially, the majority of Memphians in need of help — are renters.
“I think if Memphis doesn’t do something … the problem is going to get worse and we’re going to lose that amenity we’ve talked about for decades — of Memphis being an affordable city,” Uhlmann said.
The increasing number of renovations is related to what national experts say is the main driver of rent increases in places like Memphis: more people deciding to rent there.
During earlier parts of the pandemic, many people moved out of cities and more young adults decided to live with friends or family. Those trends have been reversing recently, Zillow market analyst Nicole Bachaud told CNBC. Additionally, prices to buy a home have risen steeply in the last year, pushing many Americans toward renting.
Newmark vice chairman Blake Pera, who’s one of Memphis’ top experts on the market for apartments, said a major driver of the rate increase is the low number of new apartments and new homes in the city.
“Demand is as strong as ever … (but) new apartment supply has been at manageable levels for years, and new home construction has also been low for a market our size,” Pera said.
Pera said prices are increasing for all types of rentals, but are increasing faster for higher-end apartments.
In September, Veronica Miller received an email from her Cordova apartment complex that listed a new rental rate of $1,700 for an apartment that was $1,000 pre-pandemic. In disbelief, she asked her teenage son to look at the email, and he asked what they were going to do.
Miller started looking for a new place but realized many in Cordova and Midtown — her desired destinations — were similarly priced. A resident of the complex for five years, she used her rapport with its staff to negotiate them down to $1,495 and then reluctantly signed.
In Southaven, Nevonia wasn’t able to negotiate her rental company away from the $1,300 it wanted to charge. So, while it took months, she eventually found a place for her and her son — a small house in southeast Memphis that will cost $850.
At that price, Nevonia will still be paying more than 30% of her probation officer income on housing — which is the U.S. Housing and Urban Development’s definition of being “cost burdened.”
To help pay for the house and her other expenses, she’s decided to take a second job.
Correction: An earlier version of this article incorrectly attributed the ownership of an apartment at the time of its renovation. The apartment was not owned or renovated by Amin Zaki at the time it was leased.
Jacob Steimer is a corps member with Report for America, a national service program that places journalists in local newsrooms. Email him at Jacob.Steimer@mlk50.com
Chart by digital editor Stephanie Wilson
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