Most Tennessee residents probably know nothing about Low-Income Housing Tax Credits — a highly technical tax incentive.
But these complicated credits are critical because they’re the primary way the government subsidizes the construction and renovation of affordable housing.
MLK50: Justice Through Journalism spent countless hours researching how the State of Tennessee distributes these tax credits and wrote a detailed story about what we found. Here are four main takeaways:
- Where we build affordable housing matters. Decades of research — most notably from a Harvard economist — show a distressing connection between the neighborhood a child grows up in and how much they earn as an adult. In Shelby County, a 35-year-old who grew up in Whitehaven tends to make half the income of someone who grew up in the more affluent Germantown — even if both had low-income parents. Low-income neighborhoods also increase children’s chances of suffering from poor health or dying at younger ages.
- The Tennessee Housing Development Agency ignores the research. The THDA does not steer affordable housing toward middle-class parts of Shelby County, as experts would recommend. Instead, it grants the majority of them to affordable housing developments in high-poverty neighborhoods.
- The THDA’s staff has proposed new policies that would push development to higher-income neighborhoods. However, the agency’s board of directors has rejected these proposals. The board sided with developers who argued such changes would increase their costs, which could mean fewer apartments built.
- Experts question the “racially concentrated” way the THDA administers the tax credits. In Shelby County, over 96% of the residents of LIHTC housing are Black, and the housing almost exclusively gets built in majority-Black neighborhoods. This occurs as Memphis remains one of the most segregated cities in the country.
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
This story is brought to you by MLK50: Justice Through Journalism, a nonprofit newsroom focused on poverty, power and policy in Memphis. Support independent journalism by making a tax-deductible donation today. MLK50 is also supported by these generous donors.