In the first half of 2021, Nesha Newson lost both her job and her father, who she called her “backbone.”
Newson decided to move with her mother from Iowa to Memphis to be closer to her then-pregnant daughter. Since both she and her mother had Section 8 vouchers, she figured it wouldn’t be too hard for them each to find a place to live,
She was wrong.
Since July, Newson said she’s searched almost every part of Memphis for rentals that would accept her voucher — a federally funded tool the Memphis Housing Authority uses to pay rent for Memphians experiencing poverty. She’s tried showing up in person, calling random complexes and calling ones recommended by MHA. Some have told her they didn’t have space. Some said she should try applying. When she has filled out applications, which often means paying application fees as high as $90, she has ultimately been told there’s no room for her or that she doesn’t earn enough.
In lieu of her own home, Newson, her mother and their dogs have been bouncing between family members and are currently living with Newson’s sister and three other people in a 1,200-square-foot, four-bedroom home near Memphis International Airport.
Newson’s face beamed when talking about her 3-month-old grandson. But the house is crowded and not hers, so she hasn’t been able to let them visit as much as she wants.
“It’s hard telling your child, who needs help … you guys can’t come here right now,” she said.
Experts and locals searching for housing say finding affordable apartments is harder than anytime they can remember. The region’s vacancy rate for apartments has plummeted by 25%, from more than 12% in the fourth quarter of 2019 to a 10-year-low of 9% in the third quarter of 2021, according to national real estate firms CoStar Group and ARA Newmark.
And having a voucher — long considered a golden ticket worth waiting years for — is no longer nearly as helpful. The director of the voucher program for the Memphis Housing Authority, Cheiktha Dowers, said that her program’s “success rate” — which measures how many new voucher recipients find housing with the voucher — has fallen from almost 80% to less than 50% since the pandemic began.
Because people lose their vouchers if they don’t use them, more than 1,000 Memphians lost vouchers in 2021 — some of whom had waited years to receive that voucher — due to the current shortage of housing. Newsom hasn’t heard from MHA on her latest extension request, so she’s assuming she’s now one of them.
‘The hunger games of housing’
The bleak situation Memphis renters currently find themselves in is a reflection of what’s happened across the country during the last 18 months. Vacancy rates plummeted and rental rates skyrocketed in almost every city as the demand for rentals has risen and far too few new ones are made available.
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 then reversed in 2021, leading to a sudden increase in people looking for housing, according to CNBC. Additionally, home prices have risen steeply in the last year, forcing many would-be buyers to remain renters.
America’s housing stock was ill-prepared for this increase in renters. Between 2001 and 2020, the U.S. added 175,000 fewer apartments per year than in the three decades prior, according to a National Association of Realtors report. This massive shortfall, experts say, was caused in large part by increasingly restrictive zoning rules making it either illegal or unbearably expensive to build apartments in places where high rental rates would normally attract developers, such as Collierville, East Memphis or Germantown. While more apartments have been built in Downtown and Midtown in recent years, Shelby County as a whole hasn’t added all that many.
A lack of new apartments in wealthy parts of Shelby County affects the availability of apartments across the county. People who would otherwise rent something brand new settle for something that’s been recently renovated. Then, people who can afford the recently renovated settle for something that’s older. And, eventually, Memphians with low incomes and credit scores are pushed out of bottom-end apartments by Memphians who have slightly higher incomes or credit scores.
Building new apartments explicitly for low-income Memphians is incredibly difficult, according to Roshun Austin, a leader in Memphis’ community development world who has successfully developed some low-income apartments in South Memphis and Frayser.
Creating these complexes takes years and patience dealing with state and local officials. It also isn’t profitable, partially because the low-income neighborhoods she tries to build them in have outdated sewage lines and other public infrastructure she has to pay to replace. At the existing properties owned by The Works, Inc., the nonprofit Austin runs, there’s a two-year waitlist for rooms.
“It’s kind of the hunger games of housing,” Austin said.
These games are stacked against Hispanic and, especially, African American renters because of racial discrimination by landlords, according to a massive new economic study. A Black American applying for an apartment is 9% less likely to receive a response than a white one. Of the 50 cities studied, Memphis had the seventh largest gap between the response rate for Black and white would-be renters.
In the 24 years Dowers has been helping people receive and use Section 8 vouchers, she’s never seen prospects this poor for recipients.
Even if other Memphians struggled to find housing, voucher recipients were almost always able to find something, she said.
“Before (COVID), our families had no problems finding units,” said Dowers, who once held a voucher herself. “It’s really frustrating. It’s really frustrating.”
This changed in the last 18 months for two main reasons, she said.
The first is that the federal government hasn’t increased vouchers’ value nearly as quickly as rental rates have risen. Rental rates in Memphis grew by 16% between January 2021 and January 2022, according to Apartment List. Meanwhile, the “fair market rent” the government set for Memphis-area vouchers stayed virtually unchanged between 2021 and 2022, after rising by about 3% between 2020 and 2021.
Because the federal government does give local housing authorities some wiggle room, the Memphis Housing Authority paid 105% of the federally set rate in 2021 and plans to pay 110% — the most it can under federal guidelines — in 2022. Still, the increases haven’t nearly kept up with the broader market.
The second reason Dowers gave was that landlords don’t like dealing with the federal regulations attached to vouchers. The roughly 2,000 landlords in the program have to maintain their roughly 6,000 units and treat their tenants according to standards much higher than the State of Tennessee requires for landlords who don’t accept vouchers. While landlords have never liked these regulations, Dowers said increasing rents and decreasing vacancy rates in the larger market led many landlords to decide that 2021 was the time to leave the program.
To counteract this, the MHA has started offering them bonuses of up to $1,000 per unit to lease to voucher recipients. These helped recruit 334 new housing units to the program, which made up for some of the ones that left.
Still, Dowers knows voucher holders are in a tough spot. She’s advising Memphians such as Newson to stay in contact with MHA — even if it means waiting on hold with its call center for long periods of time — so the agency can try to work its connections with landlords. And, she’s telling them they may have to leave neighborhood preference aside.
“In an effort not to lose your voucher, sometimes you may have to settle for a unit that may not be in the area you want to go to,” Dowers said. “But get in a unit and then while you’re there, continue to search for something.”
Family and motels
While some Memphians who can’t find stable housing are forced to live in homeless shelters or cars, more are probably overcrowding their family members’ homes or turning to extended-stay motels, Austin said.
After Ashley Bowie’s Hickory Hill landlord wouldn’t fix her stove, she moved herself and her five kids into a motel in August. At the time, she figured she’d have no issue finding another three-bedroom for $850 or so per month.
“I didn’t know it was going to be this bad. I thought it was going to be like normal,” she said in November. “I barely can eat a lot of days. I barely can sleep. I can’t really focus on my life because I’m so worried about what my future is right now. I just want to be able to have something for me and my kids.”
At $650 per week, the motel stay depleted Bowie’s savings and required significant assistance from her father. She regretted leaving her last place. After all, as many Memphians have told MLK50 recently, living under a bad landlord is preferable to having nowhere to go.
The week after Christmas, Bowie finally found something big enough for her large family. But, Bowie said, she didn’t celebrate or spread the news to family and friends because she’s still struggling. The new rental costs $950 per month, which she can barely afford.
Still, she considers herself lucky to have found it and is sleeping and eating better. And, she said, the dreadful months of uncertainty have made her more compassionate for Memphians experiencing homelessness.
“I’ll look at life differently after going through this,” she said. “There’s nothing like your home.”
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
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