By Candice Ludlow
http://stream.publicbroadcasting.net/production/mp3/wkno/local-wkno-869171.mp3
Memphis, TN – Memphis is a city with serious deficits, many exacerbated by the mortgage meltdown. Even before the national crisis set off an avalanche of foreclosures, the city of Memphis had seen more than its share. Foreclosures are destructive and leave in their wake, blight, abandoned homes, and crime. WKNO's Candice Ludlow takes a look to see how academics and the city are piecing together a response.
Home foreclosures usually happen in the inner city, in poor neighborhoods. That's not what's happening in the Memphis area. Phyllis Betts is the director for Community Building and Neighborhood Action at the University of Memphis. She sees a big horseshoe of foreclosures around the city, starting at the river on the west and extending eastward.
"We're going to have the top arch of the horseshoe from the edge of Bartlett over into Raliegh into Frayser and then coming down a bit into North Memphis, skipping Downtown and our renewal areas then the horseshoe bottom arch picking up from Whitehaven to Parkway Village, Fox Meadows and Hickory Hill. In these areas where incomes are higher than in so-called inner city neighborhoods, this is where we're experiencing the biggest impact of foreclosure," Betts said.
More than 32,000 foreclosures have swept the city since 2000, far out pacing home sales. The challenge now is how to rebuild these neighborhoods -- without letting others slip into ruin.
That's hard to do when you don't have a bevy of middle-class homebuyers. Memphis has a poverty rate of 21 percent; and the unemployment rate is hovering around 10 percent.
Betts says, "There are two choices.Those properties go to investors and we empty out our big multi-family apartment complexes, and people move into single family as renters, and we've seen a lot of that already, or we do something to maintain those properties in a holding pattern until you can rebuild our homebuyer population."
By holding pattern, Betts means using a land bank to keep foreclosed houses away from profiteers who want to rent them out. Memphis and Shelby County do have land banks, but they're not being used to hold foreclosures. That's because the city neither owns them, nor has the cash to acquire them.
Robert Lipscomb heads Memphis Housing and Community Development. He says what the city can do is very limited because the banking industry is federally regulated.
"We have engaged the lenders in a lawsuit, but I don't know how successful that will be," Lipscomb said.
A year ago, the city and county joined forces to go after predatory lenders for reverse redlining, meaning targeting African Americans with subprime loans. A major part of Memphis' housing crisis is directly tied to predatory lending. The hope is the lawsuit will halt foreclosures and force the lenders to pay damages to the city.
The city is also working closely with community development corporations to help people stay in their homes. Recently, the federal government sent millions to Memphis and Shelby County to acquire 250 foreclosures to fix up and resell to homeowners. But that's just a drop in the bucket. The vacancy rate in Memphis was 18 percent last year, and that's an increase of six percent since 2005.
One radical approach to vacancy is bulldozing. That's what happened earlier this year in Victorville, California, but Lipscomb won't even consider it.
"I heard about that, but I would not be an advocate for that. I think I'd clean the neighborhoods up, but I don't think you bulldoze all neighborhoods. I don't think you write off neighborhoods like that," Lipscomb said.
Lipscomb doesn't have a clear-cut solution. To combat the problem in the short run, he recommends strong code enforcement and police protection. In the long run he says people need jobs and better educational opportunities.