Behind the Headlines – March 15, 2019

Behind the Headlines – March 15, 2019


– (female announcer)
Production funding for Behind the Headlines is
made possible in part by: the WKNO Production Fund, the WKNO Endowment Fund, and by viewers like you.
Thank you. – Neighborhoods, blight,
and community revitalization, tonight on
Behind the Headlines. [dramatic orchestral music] I’m Eric Barnes,
president and executive editor of The Daily Memphian.
Thanks for joining us. I’m joined tonight
by Roshun Austin, president and CEO of The Works.
Thanks for being here again. – Thank you, Eric. – Steve Barlow is president of
Neighborhood Preservation, Inc. Thank you for being here again.
– Thank you. – Marlon Foster is
founder and executive editor of Knowledge Quest.
Thanks for being here. Along with Bill Dries, reporter with The
Daily Memphian. I’m going to start
with you, Steve, and then we’ll just kind of
go through a whole range of interrelated issues. You, though, we’ll start with
blight and the tools that you have fought for,
going back, in some ways, almost a decade. I think that you and I
have talked about it, that we’ve written about it,
that building a blight authority building Neighborhood
Preservation, Inc., lobbying at the state
legislature for more tools to deal with
blighted properties, abandoned properties,
and so on. I remember talking about this
during the financial crisis with you, and the
foreclosure crisis, and the swaths of empty homes. In that period
you’ve been doing this, what has changed the most? It seems like with Neighborhood
Preservation, Inc. now, and some of the
tools you all have, what authorities and
abilities do you have now, and other organizations, that
you didn’t have 10 years ago? – Well,
it’s really been a … There’s been a strong core of
believers that things can be better in our community when it
comes to abandoned real estate. The challenges that are present
in every neighborhood are unmarketable real estate,
empty houses that no one wants to buy. So there’s been a market problem
in certain neighborhoods. There’s a very large
vacant lot challenge in the City of Memphis. A whole lot of empty lots
where there used to be houses. The thing that I think has
really grown in these years since we first
started getting involved, since I was first
involved in the early 2000s, is that there’s a strong, local
coalition between government, private sector, philanthropy,
and local neighborhood and community organizations to do
something about the abandonment problem in our community. The market has
certainly changed. The financial crisis resulted
in even more abandonment, especially of
single-family houses, where mortgages that were
doomed to fail did fail, and then resulted in
empty houses and abandonment, and bad maintenance. In response to
those challenges, what we’ve identified as a
group in the community, the Blight Elimination Steering
Team is the coalition that NPI, Neighborhood
Preservation, Inc., convenes, and
has ever since … for a number of years now. We focus on the policy
areas of code enforcement, tax foreclosure
processes, and land banking. In those three areas,
we’re able to get involved by impacting policies at
the local and state level, and also by getting programs
and coordinated efforts that are related to those
three areas of… Those are the ways
that you deal with abandoned properties
in neighborhoods. – All right. We’ll dig in on
more of that, but I want to get Roshun involved.
The Works, we’ll talk more about what
The Works does through the course of the
conversation, but in short, my poor summary of it will
be that you all focus on affordable housing, low-income
housing, education… you have a charter
school under your purview. farmer’s market, you’ve been involved with
getting grocery stores into neighborhoods that
didn’t have them. Talk about how blight impacts
it at the neighborhood level. It’s not just an ugly
house you drive by, right? I mean, there’s more to that,
both in terms of the spiraling effects of blight and
abandoned properties. Talk about that. – So Steve spoke a
little bit about the market. These are, it makes a
neighborhood, or a street, or a commercial
strip unmarketable. Because an investor or a
developer cannot make a return on their investment,
if they want to buy this house at a very low rate. I always say, as the developer,
that “Sticks and bricks cost the same, no matter
where you’re putting them.” If I’m putting them in
some part of East Memphis, or Germantown, or Collierville,
that the cost of number two pine in a residential
build is the same for me, but my return… If I spend $120,000 in a house,
and I can only get an appraisal at $40,000 or $50,000 … On the development side,
that’s what we’re seeing. But like you suggested, a
vacant building or a house is more than just a vacant
building and a house. It keeps me from doing
anything to the market, to spur development of either
a non-profit developers or for-profit developers. But we always
like, in our work, we do a lot of things, and we
look at the comprehensive needs of children and families. We’ve gotten into health. It impacts the
health of a community. That’s collectively, but
individual families’ mental and physical health … When a kid is
passing a vacant building, what does that signal to
them about their neighborhood, the place where they are? Often, our mental health
impacts our physical health. It causes things to happen. – Yeah. Let me get Marlon,
and before I forget, I should disclose that you
are a board member of The Daily Memphian, just to put
that out there so all know. Marlon, talk about what
Knowledge Quest does, and how it relates to
that neighborhood level. You’re focused on just
a couple of zip codes, and work there with children,
with farmer’s markets, and again, the work of the
Blight Steering Committee and the work on blight… I think it, at a glance, people
wouldn’t necessarily connect vacant lots, vacant properties,
with your work in terms of farmer’s markets and
educating and helping kids. – Yeah, I think,
for Knowledge Quest overall, it’s a methodology around home,
health, and opportunity. Under the health banner,
started doing community gardens back in 1999,
in a former Fowler Homes Public Housing Community. Made that a formal
program in 2010. The way that ties into blight
is that it now exists on what was formerly 30
vacant, blighted lots, and even three long-abandoned
buildings that have now been incorporated into this USDA-
certified organic operation. Part of that response was,
yes, the education and the good health and nutrition,
but then really seeing what was a challenge. These lots are
blighted, need to be mitigated, bringing the
property values down. A lot of those
community elders said, “Hey, this used to be
farm land in many regards.” So we just started calling
them “green assets,” and at the community level, beginning to
change the identity and the context of how we saw ourselves
in our own neighborhood led to others from the outside,
from major sports franchises, to Fortune 100 companies now
investing on these vacant, blighted lots that
need to be mitigated. But it started with
the community context. That’s how we tied in
with this whole remediation, to see how can we
take these assets, vacant lots,
quality tree stock, and really repurpose
them for positive use? Just really working with
what we had right there at the at the community level. – Bill Dries. – Roshun, in
your work with The Works, do you think there is
a critical mass now? Have things turned a corner? Or is this still
lot-by-lot-by-lot, house-by-house? – I think we’re beyond
just this one single-family house at a time. That we’re thinking larger, so
we are starting to think about large, multi-family, which we
own and operate a multi-family development for the
last 18 years or so, but we’re about to do another
146 units in the community. We’re looking at
commercial strips or corridors, and the corners, like the corner of
Parkway and Lauderdale. We’re looking at a
comprehensive strategy around that intersection. We’re not doing the one-by-one. That’s what CDCs, or Community
Development Corporations, in Memphis have somewhat
been forced to do because of financing or
funding opportunities. We’re at a time in our growth
as an organization where we can invest some of our equity, or
the dollars we earn through mortgage programs,
principle interest payments from commercial loans
we’ve made back into doing larger projects. – Was it
strategic at first? Did you have to
pick the right corner? Do you still have to
pick the right corner? – You always
have to pick the right corner. You have to pick
the right house, even, if you’re going to
do the one house at a time. – What is a right corner? What makes a
corner correct to pick? – Well, I mean,
it’s just like the retail and commercial guys or
women are looking at, always, they’re
looking at traffic counts. It’s not necessarily automobile
traffic that we’re looking at. Pedestrian, because many
people in the neighborhoods where we work
don’t own automobiles. So we’re looking at traffic. We also are looking
at the “lack of.” So there’s a lack
of access to food, or a lack of
access to health care. Our community members, in a
plan that we did about 11 years ago, the South Memphis
Revitalization Action Plan, determined that there were
nine priorities they wanted us to focus on, because we
consider ourselves the stewards of that plan,
not the owner. It’s a neighborhood-led,
resident-led, neighborhood stakeholder-led plan and we just
implement the vision that was set out in that plan. We decide based on economics. Can we acquire the lot
at a reasonable rate, or the building at
a reasonable rate? What is it going to cost for us
to renovate it or rebuild it? And can we get
some kind of return, and if there’s a gap, is there
available subsidy dollars to help us do that deal? – The other thing
that a non-profit affordable housing and neighborhood
revitalization developer does is looks for the
connective tissue, the existing strengths, the
community organizing capacity. That’s why I think such a great
example of what it takes to do community revitalization, to
just look at Marlon and what Knowledge Quest does to
build the community fabric. People, kids, older folks,
homeowners, renters. Everybody has a place at this
community garden which Marlon’s organization converted from
abandoned houses and overgrown lots into a very structured,
very attractive destination, really, in South Memphis. Meanwhile, you have somebody
in a nearby neighborhood thinking about the
physical assets. It takes both, and that’s
why, in the work that we do city-wide, and collaboratively,
we’re always talking about community engagement, data … meaning where does it
make sense to do what? We’ve got to know where do
we have the abandonment? Where do we have
the opportunities? Where do we have the
future market potential? Then we’re also talking
about some of the laws, and the policies that
need to be changed. Sometimes that has to do
with code enforcement or tax foreclosure laws. Real exciting
stuff to talk about. [group chuckles] Then finally, there’s a whole
area of work around reclaiming and re-using property. We’ve got to think about,
sometimes it’s a specific property that’s just
holding us back. Sometimes it’s a whole cluster
of abandoned vacant lots in an area that, but for
those vacant lots, the area could
really turn a corner, or really be an asset. – What can you do, though? Let’s say there
is that building, in that neighborhood, and
it’s somebody like Marlon, or Roshun, or someone else has
got these great things going, but you go
halfway down the block, and there’s an
abandoned property? What are the tools
people like you, or anyone, has to force that
property owner to clean it up, to sell it, to do something? – That is exactly
the question that I started asking myself in the ’90s,
when I was working in the LeMoyne-Owen College area. I was so frustrated with the
difficulty presented to us by an abandoned house, or even
an occupied house with… I remember an occupied
house with no utilities, with a hole in the roof that
was probably three feet across, a veteran lived in the house,
and it had been going on for a long time by the
time I got involved. I was so frustrated by the fact
that that could be in my city. I started to
realize that we needed, as a community, to get more
organized around what tools, what approaches… There are all kinds of social
safety-net types of things that we need to do better,
but what I focused on, and the tools that I’ve
been working on developing, have been mostly
the legal tools. Because what I started to
realize as I looked around the country at who was being
successful at dealing with this challenge is that everywhere
that people were having success, they
had a coordinated, very high-level legal strategy. They were using
the building codes. They were using the
property maintenance codes. They were using the
tax foreclosure laws. They were using the
lien foreclosure laws. All sorts of legal tools. These tools tend to be… They begin with
property maintenance codes, and that’s code enforcement. – Yeah. How, again, back to
you, Marlon, for you all… Do you use those kinds
of tools that Steve said? Or do you call
Steve up and say, “Hey, do this for me?”
I mean, but, and I’m– -Pretty much, I’m going to
have Steve on speed-dial, [Roshun laughing]
but that’s what’s required. We are, there are two levels
of policy, if you will, at work. There’s our formal policy, and
of course I’m going to get on the phone with
Steve to have NPI, to have this, to use that
term again Roshun referred to, just kind of “steward of the
process,” someone who has a handle on that legalese,
and being able to activate and execute quickly… But then, for us, there’s
another level of policy at the community level. For instance, this neighborhood
we’re talking about, I gotta live, work, and worship here. There’s another
dynamic at work that… we’re working alongside
families that I may live next-door to.
Or I go to church with. So being able to have a
community partner at that level, to be able to work
with a family more directly, to be able to have
some translation, some support,
to say, “Hey, let’s get this to a better place.”
And to do that with dignity. To do that with
coming alongside. You have to work
both of those ends. The grassroots level,
some say grasstops level, but both are
required in this work. – Let me… Bill? – Yeah, you’ve, there’s a list
of violators that you’ve gotten. I think we have a … – (Eric)
We’re going to put a map up. – a map of that.
When you go after a violator, what is your goal
in that process? Is it a penalty? Is a re-use of the property?
What– – (Eric)
Let me, before, just to explain what people have.
This just gives a scale of the top-10
code violators that you all at NPI have identified,
and where they’re concentrated across the city and county.
So go ahead. – (Steve)
Right. The data about code enforcement is more
organized than it’s ever been as a result of this coordinated
effort I’ve mentioned. What we’re able to do
at this point in time, just with
publicly available data, is to provide every three
months a list of the owners of real estate with the most
number of violations of code enforcement standards. That’s just for
informational purposes, and it’s objective.
That’s the reality. That’s who has these things. Some of the owners
on the list have some good properties, too. Some of them will talk about
the challenges that lead them to have so many
code violations. I know one of the organizations
on the list has said that when they are managing a large
number of single-family rental properties, they don’t
do the maintenance at the single-family houses. The maintenance of the yard and
the exterior is on the tenant. There are certainly a
lot of mitigating factors, and all of that.
But our goal is always, the goal of code enforcement,
or of property maintenance enforcement is always
compliance with the codes. It’s not to penalize. It’s not to take
property away from somebody. It’s to get compliance. If you can’t get compliance by
knocking on the door nicely, and saying, “Can
you please do this?” Then you might have to
go to code enforcement. Knocking on the door
and giving a ticket. If you can’t get that ticket
corrected within 30 days, then you might have
to take them to court. If you can’t get it by
taking them to court, then you might need to sue them
with a more aggressive action that might end up
with them losing some control over their property. Currently, we have, at
the City of Memphis, a process in place
working with the University of Memphis
Law School, and students in that program, to bring lawsuits against
hundreds of owners of vacant abandoned
properties every year. The only way that the owners
are going to be able to get out of court is by fixing the
property to where you can live in it, tearing it down, or
selling it to somebody who commits to doing one
of those two things. Compliance is always the goal. – Can you tell someone, “You own a vast
real estate portfolio, properties that you
have never seen,” can you tell them “You just
own too many properties?” Is that part of the process?
[group laughs] – That’s what you’d
like to tell them. – I feel like that’s
the American Way. We’d like to tell
people that, I think, but we don’t want
to infringe on people’s personal right
to own property. I think we just want them to
do better in the neighborhoods where they have distressed
neighborhoods already, where they have properties
that have code violations. Because often, when they
own lots of real estate, they have places,
like Steve mentioned, where their real
estate is great. It fits within the standards of those neighborhoods
where it’s located. – Then how do you
get them interested in their properties in
Memphis, Tennessee, a place that they may
not have ever visited, may not have ever seen, may
not have ever thought about? That’s just an
address in their portfolio? – Steve is the legal side, and so Steve, Marlon, and I
have worked together for… more than two decades. We’re very youthful–
[group chuckles] but we’ve been in this
business since the ’90s. And we are very
interdependent in our work. He can do the legal side,
and Marlon is a minister, so he’s going to
be the good cop. I’m going to be the bad cop.
[group chuckles] We tend to … Grasstops, grassroots,
we organize neighbors, and we educate them about their
rights around code violations. “You have a right
to report this. This is not acceptable
in your neighborhood.” I get more into the shaming
aspect than Steve would, and I do– – (Eric)
Is that effective? – It is. I do it in … I don’t
do it single, by myself. I do it with neighbors,
that “This is absolutely unacceptable in
your neighborhood, where you live, property owner. So it should be unacceptable
in the neighborhood where me and my children live.” – Does that include,
and then I’ll go back to Bill, does that include,
I mean, as Steve alludes to, sometimes it is the tenant
who is responsible. Is there some of that, or no?
Of shaming the tenant. I mean, I hate to
say it that way, but– – It’s not shaming the tenant, but actually I’d
rather educate the tenant. Sometimes, you leave
the tenant out of it, because you don’t want them to
be penalized by the landlord. They’re afraid. They may not have
anywhere else to go, so if you can’t find
them somewhere else to go, you keep them out of it. It’s more about the
neighbors around, that you are reporting. You have access online to 311,
so you’re reporting through the code violations to
the City of Memphis. You’re calling. You’re saying
“That’s unacceptable.” Sometimes it’s more aggressive,
because you’re pushing your mower over into that yard. It’s doing
neighborhood cleanups. – Marlon,
on the good cop side, do you show them all of the
community work that’s going on? That this is more than a
collection of addresses, I would imagine. – Yeah, I mean,
it’s very tactical. You’ll see one of our
primary colors is green. You’ll see every
time we have a fence, or a standing seam roof, that
we’re communicating by color. We’re communicating by … Then you go by St. Jude’s,
you see the same tones, so it’s the same type of setup.
So communicate by color. We communicate by
community direct engagement. You have some ranges
or brackets of blight. From the commercial
context, with warehouse, stores, things of that nature. You have a few, you know,
hey, hedge fund guy from out-of-state, bought a
thousand properties. But even tighter down
to the community level, you have a lot of abandonment
where there was a family home, a couple of generations. Children may have
went off to college, did not come back.
The house is there. Parents are deceased. We have some
reverse-mortgage nightmares. A lot of things. Vacant lots from large-scale
demolition programs in the past have all led to these
houses and these lots. Many times, there is a
local connection to this lot, that the child now
lives across town, but this lot has just
been in the family, mom’s house, dad’s house,
we just still own the lot. It’s working through even
some of those sentimental connections to say,
“Hey, what we’re doing is going to honor this.” We had a family
that owned five lots. It was really
from their parents, and their parents’
real estate endeavors, right there connected. They bought the
neighbor’s house, the next neighbor’s house. They bought up two
houses across the street. But now it’s all vacant lots. It’s just them being
able to come back, to see the way
that we’re honoring, because not to mention
these three buildings, one is about to become
a college dormitory. 10 one-bedroom units. One shotgun house is
a former pack house, process and
packaging of produce. Healthy classes. In one house, there’s some
visions of a granddaughter to have small
farm-to-table restaurant. For these families to come back
and to see the way that we’re honoring this legacy home,
or this legacy property, has also helped to
really move things along. – Steve, so does the
squeaky wheel get the grease in this case? In terms of pointing
out these violations, and then showing a
road, a path to recovery? – Well, the best approach
in code enforcement is to have a systematic
approach with categories of type of enforcement. For example, if you have very
low population remaining in a certain part of town,
a certain neighborhood, or a certain census tract,
and very low investment, low population… There’s a lower
response required. When you have a
highly-populated area with a lot of problems, that’s where
you need the most activity. And then when you have an area
where there’s not a lot of code problems, you need very little. There’s a need for
a triage approach. I hate to say “squeaky wheel,”
because squeaky wheel indicates that you only respond
when somebody calls. Historically, that’s the way
code enforcement has been done. I mean, it’s similar
to law enforcement. When you get the
call, you respond. But what our code enforcement
office has been moving towards, and with the adoption of the
new International Property Maintenance Code in December,
and with some new ideas coming up on how to handle rental
properties in the City of Memphis coming this year,
we’re thinking systems. How do we do it
smart, the right thing, at the right time,
at the right place? We’re trying to move
away from squeaky wheel, although, yes. When people get
organized and say, “We’re not going to put up with
this property looking this way anymore,” that helps a lot
on the enforcement side. – Just a minute left. The impact of hedge
funds and big, we’ve alluded to it, but one
of the big outcomes of the financial crisis, hedge
funds and other big investment companies bought up
thousands, tens of thousands, of single-family
homes across the country, and rent them out. When you’re trying to deal with
a problem property owned by, say, a New York
hedge fund, is that … How is that different?
With 30 seconds, I guess I’ll talk
to you about that. – Raise the cost of
doing business in the City of Memphis
for somebody who wants to own a lot of
rental properties. They’re allowed to own them. We can’t do
anything about that. But we can make them, we can hold a standard
for the City of Memphis, and if you’re going
to do business here, this is how you
do business here. – Raise the
cost in the sense of … Not just arbitrarily,
but relative to upkeep and the issues
you’re talking about? – That’s right. If they’re getting away with
very low maintenance costs, and they’re delivering a
product that’s inferior, then–
– Right. Okay. Thank you all for being here.
Thank you for joining us. Join us again next week. [dramatic orchestral music] [acoustic guitar chords]

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