MEMPHIS, Tenn. — As we have continued the conversation about African-Americans and the struggles that come with buying a home in today’s market, contractors who build affordable homes are finding it tough to add more inventory.
Homebuyers aren't the only ones who are impacted by this unreasonable housing market. Contractors like JRI LLC, Owner Anthony Jackson who want to build more affordable houses, have found it quite a challenge to be able to do so in certain areas because of the lack of funding.
“Builders are not incentivized to build in our community. So what’s happening is many of the wealthier communities that our builders are building in - our average communities that your average person - your teacher, your police officer - they can’t afford to move in some of these areas,” Jackson said.
The housing market is also directly impacting those like Jackson who develop affordable, low-income quality housing.
“And then the communities where many of our people have grown up in, South Memphis and Whitehaven, Hickory Hill, there’s no production being done there,” Jackson said.
This means there is also no incentive for builders to come into these areas, and Jackson said there is just not enough inventory.
“Trying to compare a comp to 50 years ago to a brand new house that I’m building in that area today," Jackson said. "There is a lot of skepticism and lenders that are kind of shying away from that... or they say, ‘That project is too small.'"
However; for quality and affordable housing, Jackson said most average pre-approvals are between $150,000 to $200,000, which is not typically enough for investors to see a return on investment.
“When I go right up the street and over to Desoto county and I can fund $300,000 or $400,000 houses," Jackson said. "Why would I fund your $150,000 project? From a buyer’s standpoint, for our community... we need those $150,000 houses. But funders are just shying away because there’s just not enough funding in it.”
Jackson said a step in the right direction is holding leaders accountable.
“Much of our funding dollars come from private investors out of Pennsylvania. Why do we have to go to Pennsylvania to get funding for Memphis projects? We should have local funders that say that they’re for Memphis that’s willing to fund Memphis projects.”
Jackson said the issue is that other people in different places are willing to invest in our community, but we are not willing to do the same.