Memphis doesn’t see much capital investment – and when it does, the money goes to white neighborhoods

Ayers grocery store in the Klondike-Smokey City neighborhood. This and other predominantly black neighborhoods in Memphis have not seen significant capital investment, according to an Urban Institute study released Thursday. Photo by Brandon Dill for MLK50

Little private or philanthropic dollars are committed to improving Memphis’ neighborhoods, and the investment that exists goes largely to the whiter parts of the city, according to an Urban Institute study released Thursday.

Between 2005 and 2018, Memphis ranked 96th out of the 100 largest cities in the country in terms of per capita access to loans, grants and other forms of capital, according to the researchers. Memphis has seen just over $ 5,000 per household during those years, while most cities have seen over $ 10,000 and 10 at least $ 20,000.

This investment was more separated by race than by poverty level: while the low-poverty median neighborhood received 5.2 times more investment than the high-poverty average neighborhood, the white-majority median neighborhood received 5.8. times more than the predominantly black midpoint neighborhood.

“The capital flows in Memphis are deeply separated, much like the city itself,” the study says. “The city lacks the quantity, but above all the quality, investment capital and projects necessary to have a meaningful impact in underserved communities. “

Sources: Community Development Financial Institutions Fund, Community Reinvestment Act, CoreLogic, US Department of Housing and Urban Development, Home Mortgage Disclosure Act and data from the Small Business Administration; Quinquennial estimates from the American Community Survey 2014-2018. Notes: Capital flows are presented in constant 2019 dollars. The analysis of capital flows is performed at the census tract level. Because many census tracts are only partially located in the 100 largest cities, all census tracts that are more than 25 percent within a city are included.

Fast facts

  • Little money is invested in Memphis. Between 2005 and 2018, researchers found that Memphis was 96th of the 100 largest cities in the country, in terms of per capita access to loans, grants and other forms of capital.
  • The money that comes is pouring into East Memphis, downtown and the white residential neighborhoods. The predominantly white median quarter received 5.8 times more than the predominantly black median quarter.
  • With a few dollars invested, Memphis’ black neighborhoods are unlikely to improve, according to Roshun Austin, who heads one of the city’s most respected community development organizations.
  • Despite much discussion of economic dynamics before the pandemic, neither real estate nor overall private investment in the city has reached the levels many other cities were seeing in the years leading up to 2020.
  • While the city has a reputation for charity, researchers have found a weak philanthropic community development ecosystem compared to other cities.

Downtown and eastern Memphis recorded the most investment in the years studied. With little money flowing into the city’s poorest and blackest areas, neither the neighborhoods nor their crime problems will improve significantly, according to Roshun Austin, who heads one of the leading development organizations. city ​​community, The Works.

“We’re caught up in ‘Groundhog Day,’” said Austin, whose nonprofit works primarily in South Memphis.

While a lack of capital may seem abstract, it allows for the construction of new grocery stores, quality housing and many other neighborhood assets, according to Brett Theodos, senior researcher at the Urban Institute, co-author of the study. .

“(Capital) is not the end. But, that’s the means to most ends, ”Theodos said.

When it comes to for-profit investing, Theodos and his co-authors wrote that Memphis may struggle to attract investors due to its stagnant population and economic growth. Since the end of the 2001 recession, Memphis’ gross domestic product – a measure of total economic output – has grown only 65%, while those of Louisville and Little Rock have increased by 80% and those of Louisville and Little Rock have increased by 80%. of Nashville by 152%. The city is too dependent on low-wage industries, incredibly large geographically, and has rental rates so low that it is difficult to develop real estate profitably, their research has found.

Sources: CoreLogic; five-year estimates from the American Community Survey 2014-2018; Map layers from Esri, HERE, Garmin, OpenStreetMap contributors, and the GIS user community. Notes: A multi-family household is defined as a household in a building of four or more units. Capital flows are presented in constant 2019 dollars. The analysis of capital flows is performed at the census tract level. Since many census tracts are only partially located in the city of Memphis, all census tracts greater than 25% within the city are included.

Private real estate investment was on the rise before the pandemic, particularly in downtown Memphis; on his swearing-in for his second term, Memphis Mayor Jim Strickland hailed $ 19 billion in “recent, current or future development in the region.” However, even with this momentum, neither real estate nor overall private investment in the city reached the levels that many other cities saw in the years leading up to 2020. Strickland’s office did not immediately respond to a request for comment.

“I think there are green shoots and it’s good to be optimistic,” Theodos said. “(But) the fact that you’re 96th shows… downtown and even wealthy neighborhoods (didn’t) have access to as much capital as other parts of the country.”

Equipment increases during construction of new buildings along Riverside Drive in downtown Memphis in February 2020. An Urban Institute study released Thursday found most of the capital entering Memphis was in the downtown and east of Memphis. Photo by Andrea Morales for MLK50

While the city is renowned for its charitable giving, researchers have also found a weak philanthropic community development ecosystem compared to other cities. While there are many nonprofits that strive to improve different neighborhoods, “only a few have the capacity to carry out complex and impactful community development projects.” The authors compared this to Cleveland and Detroit, where “commitment, coordination and capacity” has led to major neighborhood revitalizations.

The researchers conducted 12 in-depth interviews with local nonprofit leaders while conducting the study. A representative of a local community development entity said: “One of the first things we learned is that there is no [community development] system. … It’s a bunch of chaos. There is an ambitious will, but no real money for community development.

A man waits at a bus stop near the corner of Vollintine Avenue and Breedlove Street in the Klondike-Smokey City neighborhood in September 2020. Photo by Brandon Dill for MLK50

Austin agreed, calling the local community development scene “childish” compared to other cities. Many local organizations that call themselves community development corporations do little actual development and focus the development work they do on single-family homes, as opposed to more comprehensive neighborhood redevelopments, he said. she declared.

The fact that few Memphis organizations have the capacity to complete complex redevelopment projects is hampering the city’s ability to attract national philanthropic funds, Austin said.

When it comes to local donors, the study indicates that the Hyde Family Foundation has been the leader in community development work. Austin agreed with this opinion, but said the Pyramid Peak Foundation was increasing its commitment to the industry and would surpass Hyde.

Austin is also cautiously optimistic about future investments through the City of Memphis Accelerate Memphis program – which is set to spend $ 200 million on infrastructure, parks and development projects across the city by the end of the year. Strickland’s second term as mayor. The effort may be successful if it strategically focuses on a limited number of expensive infrastructure projects, as opposed to cheaper ones meant to appease the residents of each neighborhood, she said.

“We have to say yes to some things and no to many others, otherwise everyone gets a pinch of it,” she said.

Here are the authors’ six recommendations to stimulate equitable investment in neighborhoods:

  1. Develop and strengthen the local ecosystem of loans and intermediaries. Technical assistance will be essential to increase the capacity of these groups to participate in more complex transactions that mix tax credits, other grants and other types of capital.
  2. Support CDCs to increase their capacity to sponsor and cultivate community development projects. Because CDCs are location-based, they are essential in attracting more capital to projects in neighborhoods other than downtown and East Memphis.
  3. Revise local and national tax structures so that collective housing is not disadvantaged compared to single-family housing. This is difficult and would include changes at the state level.
  4. Consider tax breaks and other incentives for community development projects that match city and county priorities, especially in historically underfunded areas, pushing development beyond its traditional nodes. Where appropriate, the public and private sectors can explore ways to strategically use these incentives in tandem with areas of opportunity to advance priority projects.
  5. Deepen corporate, traditional and family philanthropy in financing community development. Flexible, low-cost capital can help reduce the risks of potential investment opportunities in small and medium-sized cities. Support planning and technical assistance will also be required.
  6. Increase metropolitan coordination. Our interviewees agreed that the lack of coordination between the three states that contain the Memphis MSA and the layoffs between the City of Memphis and Shelby County were barriers to attracting capital.

Jacob Steimer is a member of the body of Report for America, a national service program that places reporters in local newsrooms. Email him at [email protected]


This story is brought to you by MLK50: Justice through journalism, a nonprofit newsroom focused on poverty, power, and politics in Memphis. Support independent journalism by making a tax deductible donation today. MLK50 is also supported by these generous donors.

Do you have a story idea, advice or feedback? Send an email to [email protected]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

*