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Room To Rent?

A proposal for 125 rentals in North Memphis is approved, but the issue of vacant property remains.



Quincey Morris grew up in the North Memphis neighborhood of Klondike, but things have changed dramatically in the several decades since.

"When I was growing up, I didn't have to leave Klondike to get anything I needed," she says. "It's not like that now."

After moving from Indiana as a child, developer Harold Buehler also grew up in North Memphis' nearby Hyde Park. Earlier this month, the two found themselves at odds when Buehler's $12 million proposal to build 125 North Memphis rental homes — 25 of them in Klondike — came before the Shelby County Commission. Despite the fact that Buehler was behind on almost $900,000 in county property taxes, the commission approved the project proposed for land seized from other owners due to delinquent taxes.

The county's Homestead program utilizes tax-foreclosed properties in an attempt to stimulate neighborhood revitalization and increase the amount of affordable housing. For a small application fee and a deposit, people can obtain a vacant lot. If they build a home on the property within 12 months, the deposit is refunded.

The Community Development Council of Greater Memphis generally deals with big-picture policy issues but decided to take a position against the proposal.

"We talked at great length about the economic impact and the potential for job creation and whether or not the neighborhoods need rental housing," says development council head Emily Trenholm. "Ultimately, it would put additional rental units in areas that already have [rental units] empty and boarded up. And not all of it is old."

Of Klondike's residential lots, about a third are owner-occupied housing. Almost half are rental property, and a fifth are vacant.

"On every street, there are an average of four to five houses already boarded up," Morris says. "If you want a community to thrive, you want more homeowners and legitimate businesses."

As head of the Klondike/Smokey City Community Development Corporation, Morris does a monthly inventory of the neighborhood's vacant lots. Overgrown lots are reported to city and county governments. But even with keeping blight at bay, she doesn't think new homeowners will want to move into an area with a rental rate of almost 50 percent.

Morris' development group doesn't build or rehab housing, so it is not in competition with Buehler for land.

"I have no idea who will move into these houses. Maybe if someone is living in a rat-infested home, they'll move into one of these new houses. But if you do that, you're going to have another vacant house," she says.

At any given time, the county has more than 3,000 properties, which range from a ditch to an office building, in its inventory. The city also owns vacant property, though less than the county.

"We're not going to create more rental housing," Buehler says. "The city is tearing down about 1,000 houses a year. ... I'm not increasing the rental population; I'm just replacing an eighth of it."

Buehler says he also would prefer to build owner-occupied homes, and did for a number of years, but found he could help more people with rental homes.

"It became increasingly difficult for people to be approved to buy homes," he says. "We were able to utilize financing to build homes to lease to families who weren't ready to buy yet."

As for his back taxes, Buehler says he is on an aggressive payment plan and notes that in the last four years, he has paid an additional $300,000 to the county in interest and finance charges.

"I think the majority of people are very frustrated by what's going on in the inner city," Buehler says. "I think this gave them a platform to talk about their community."

But if this particular proposal is a go, there is still a question of what to do in these neighborhoods. Morris says she would rather see the vacant property maintained and then redeveloped under a comprehensive plan.

Trenholm, also a member of the Land Use Control Board, says projects of this magnitude should require a public hearing.

"If someone in the neighborhood was going to build a garage one foot closer to the sidewalk than the code says it should be, you would have to have a public hearing," she says. "But you're going to build 25 brand-new homes in a small area, and there's no notification."

Buehler thinks the city or county should implement a tax freeze for new homeowners in the inner city, similar to the corporate payment-in-lieu of taxes program.

"They've watched their neighborhoods fall apart," Buehler says of the people who opposed his proposal. "They'd love to have another 25 homeowners, but that's not going to happen, not until you have some sort of program to entice people to come back."

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