Officials concerned affordable housing often left out of bigger economic development picture

TML Communications Specialist

When wildfires ripped through the Great Smoky Mountains in 2016, communities in the area like Sevierville found themselves faced with the challenge of rebuilding homes and lives.
Pamela Caskie, director of development with the Sevierville Development and Planning Department, said the wildfires not only devastated the community but also added to issues the city had already been dealing with.
“We were having issues with affordable housing before the wildfires, and the fires only exacerbated the problem,” Caskie said. “The good news – the silver lining in the cloud – is that the fires did call attention to the fact that this is a real issue throughout Sevier County. Because of the fires, we did get some additional consideration for housing funds.”
Sevierville – like many communities around the Great Smoky Mountains National Park – is a service-based economy. Tourism is the area’s biggest industry and while it brings in big bucks to the community, jobs like working in hotels and restaurants aren’t always the most profitable for employees.
Caskie said the average Sevierville resident makes about 60 to 80 percent of the median income or less, sometimes earning between $10 and $14 an hour for jobs they have held decades. The increasing costs of housing, food, and transportation have a deep impact on the community overall as a result.
“We are facing a situation where our economic development is customer service,” Caskie said. “We sell customer service, and the experience good customer service gives you. If we don’t have enough people to get the job done, if workers are frustrated, if they aren’t there because they’re working shorthanded, obviously our product and our brand diminishes. We want people to be able to focus on their job, not on whether or not they are going to make rent or if they can find a place to live. It is imperative to us that we get enough people in the workforce to provide that high-level of customer service.”
One of the ways many residents cope is by renting out units in short-stay hotels. However, when the tourist season picks up these hotels are out of reach for local residents.
“The need in our area is multi-family and apartments,” Caskie said. “The people who live in our community would prefer to have a standalone home with a little bit of land – not a lot – but sometimes you have to take what you can get or you can afford. It’s much harder for us to subsidize single-family housing units than it is multi-family units.”
Economic development and the ability to draw new businesses into the community are among the top goals of many communities across Tennessee,
Lindy Turner is executive director of community housing development organization Clinch-Powell Resource Conservation and Development Council and has been with the organization since 1989. She says housing is an important piece of economic development for any community, but sometimes becomes a lesser priority when faced with the needs of bringing in big business.
“Quality housing and quality affordable housing should be an intricate party of any community’s development plan,” she said. “We have a history of focusing on industrial development. It is rare for considerations of affordable housing to be included in economic development planning. We should be just as focused on community development as industrial.”
By putting housing needs on the back burner, communities can sometimes create bigger issues for themselves further down the road.
“Companies don’t just look at the industrial park,” Turner said. “They also want to look at housing. You can’t wait until a company is considering your community to look at adding housing to the people they are bringing with them. We need to think more holistically and how communities can help housing occur.”
A study by the Center for Housing Policy titled “The Role of Affordable Housing in Creating Jobs and Stimulating Local Economic Development” found that development of affordable housing has many more economic consequences than many realize.
“The development of affordable housing increases spending and employment in the surrounding economy, acts as an important source of revenue for local governments, and reduces the likelihood of foreclosure and its associated costs,” the report states. “Without a sufficient supply of affordable housing, employers — and entire regional economies — can be at a competitive disadvantage because of their subsequent difficulty attracting and retaining workers. In addition to these proven linkages between affordable housing and economic development, this review also discusses several promising hypotheses that have not yet been as well researched but that nonetheless suggest ways in which affordable housing can foster local economic growth.”
Beyond the jobs initially created by construction and the permitting fees that cities receive for new builds, the study found that housing availability and housing costs are among the top five concerns for companies when they look to move into a community.
The report also found that affordable housing can improve municipal fiscal and economic conditions in a number of indirect ways such as appreciating the values for nearby homes, thus creating a more robust tax base.
Affordable housing also brings housing costs below market rates, which in turn increases the money available for purchasing goods and services in the local economy.
Beyond merely new builds, renovating older homes can also have a positive economic impact on a community. In addition to increasing residents’ residual income, the construction and rehabilitation of homes to make them more energy-efficient can have significant economic implications for localities that encourage or incentivize such practices.
Lisa Strurtevant from Shelterforce, an independent, nonprofit publication that supports the community development field, said there are ways a lack of affordable housing can also negatively impact a city that most people aren’t aware of.
When workers are unable to find affordable housing near where they work, Sturtevant said the longer commute has a measurable economic impact – beyond just the wear and tear on roadways by vehicles taking longer journeys.
“As a result, they have less disposable income and have less to spend on other necessities, such as food, health care, child care, and savings,” she writes. “Family well-being can therefore be negatively impacted by these higher commuting costs. They spend less on local retail goods and services, which has a negative impact on local businesses. Workers with longer commutes are more likely to arrive late to and leave early from work. As a result, worker productivity suffers, which has negative repercussions for business productivity and growth. In addition, workers with longer commutes may eventually be more likely to look for employment closer to their homes. Local businesses, therefore, will face higher employee turnover and elevated costs for recruitment and retention.”
Sturtevant said that officials in Chesapeake, Va., and with Housing Virginia brought people from the Hampton Roads region of the state together to look at how economic development, city planning, transportation, and housing play into overall economic development for the region. By looking at where housing and places of employment were located, they could better plan transportation outcomes as well.
“By making the economic case for affordable housing, the conversation brought together not just the usual suspects who care about affordable housing, but also local land use planners, elected officials, economic development professionals, and transportation analysts and advocates,” Sturtevant writes. “This broadening of the discussion around the future demand for housing is important not only to increase understanding of regional housing needs, but also to engage a larger and more diverse set of stakeholders who can help convince local officials and residents of the need to plan for more housing around transit and near growing employment centers, to re-zone areas to allow for multifamily and higher density housing, to allocate funding to build and preserve housing affordable to very low-income families, and to explicitly link business attraction efforts to the housing needs of new workers.”
By making affordable housing an overall part of economic development and realizing how housing plays an important role in the local economy, Sturtevant said communities can better plan for their future.
“Making the economic case for affordable housing can feel uncomfortable to those who believe that having access to safe, decent and affordable housing is a right that everyone should enjoy, without exception,” she said. “But by linking housing needs to a region’s economic prosperity, we can bring more people into the effort to help find ways to make sure there is a diverse mix of housing affordable to individuals and families all along the income spectrum.”