Memphis housing has a math problem. The cost to build a new home in many of our core neighborhoods runs $15,000 to $30,000 more than the home will appraise for once it’s done. That gap between what it costs to build and what the market will pay is why builders won’t build; why vacant lots stay vacant; and why Mayor Young’s goal of 10,000 new units by 2030 can only succeed if we change the equation.
It’s important to note that this didn’t happen overnight. Memphis kept annexing outward — Frayser, Raleigh, Whitehaven — chasing tax revenue that never covered the long-term cost of those new streets, schools, and pipes. Meanwhile, core neighborhoods aged, families with means moved to the next ring of suburbs, and nobody reinvested inward. When one house on a block falls into disrepair, it drags down every neighbor’s land value. Local urban studies experts say one abandoned property cuts roughly $7,500 in value from surrounding lots. Multiply that across the 25,000 vacant lots in the city and you understand why entire ZIP codes have lost their economic footing.
One of the most common paths to abandonment is one that Habitat for Humanity’s Aging In Place repair program sees consistently: a roof leak. Unaddressed water damage spirals into structural failure. Eventually the home is condemned, then demolished. Each demolition adds to those 25,000 vacant lots. Once land values sink low enough, it becomes impossible to build a new home that appraises for what it costs to construct. Even nonprofit builders can’t make the math work. One roof leak becomes a damaging neighborhood-level economic event.
When new home construction stops, so does population growth. And when population declines, economic activity follows. Businesses look for “beds and heads.” If people aren’t moving in, neither are they.
And those vacant lots don’t just sit there. The research is unambiguous: Vacant and abandoned properties are engines of crime. Studies from Philadelphia found that blocks with unsecured vacant buildings had more than three times as many drug calls, nearly twice as many theft calls, and twice as many violent calls as comparable blocks without them. In Philadelphia, when vacant lots were cleaned up and maintained, nearby gun violence dropped by 29 percent. The same pattern shows up city after city. Vacant lots are both an economic and a public safety issue. A program that systematically converts them into occupied homes is, among other things, a crime reduction strategy.
There is an excellent and proven example of a path out. In 2000, Philadelphia faced the same crisis — population loss, a hollowed-out core, and roughly 36,000 vacant lots. The city adopted a simple, citywide 10-year property tax abatement on new residential construction. Here’s their mechanism: When a buyer knows their property taxes will be significantly reduced for a decade, that future savings gets folded into what they’re willing to pay today. Appraisers adjust accordingly. Suddenly a home that cost $300,000 to build could actually sell for at least $300,000 and likely more. Construction permits tripled almost immediately. According to an American Enterprise Institute study, over the following two decades, Philadelphia added more than 60,000 new housing units, reversed five decades of population decline, and saw median household incomes rise sharply. The program cost the city almost nothing upfront, and its long-term property tax base expanded dramatically as those abatements expired.
Detroit’s recent experience confirms the lesson. Every single-family home built in Detroit since 2019 was constructed inside a tax abatement zone. Even a partial abatement — Detroit’s covers 50 percent of property taxes for 15 years — turns out to be a prerequisite for private construction in distressed neighborhoods. Without it, building simply doesn’t happen.
Memphis can do the same, with a two-part plan. First, dedicated public funding for home preservation, which keeps occupied homes out of the roof-leak-to-demolition pipeline, is relatively low cost ($18,000 per repair) and stabilizes neighborhood land values from the bottom. Second, a meaningful property tax abatement on new residential construction on vacant lots changes the math so that nonprofit builders like Habitat can break even, laying the foundation for traditional builders to make a profit again. Paired with the city’s new zoning map that could expand what can be built in core neighborhoods, these two tools create the conditions for a genuine housing renaissance. Instead of relying only on a few massive developments, we can spark thousands of small bets made by builders who finally see the finances pencil out.
This program would change the economic calculus that has kept abandoned places forgotten. It’s about making Memphis competitive with its own suburbs. It’s about fewer vacant lots breeding crime on blocks where families are trying to live. It’s about rebuilding wealth in neighborhoods that have been left behind. It’s about believing in ourselves enough to bet on our own people.
Because nobody’s got us like us.
Zachary Amos is Associate Director, Advocacy & Public Policy, at Habitat for Humanity of Greater Memphis.