Community Conversations: The impact brought on by a lack of houses for sale, soaring property values

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KNOXVILLE, Tenn. (WATE) — It’s a word you’ve likely heard. Its meaning and impact largely depend on what your family earns. The word is gentrification.

Oxford defines it as the process of renovating and improving a house or district so that it conforms to middle-class taste. Dozens of examples can be spotted throughout Knoxville, especially on the east side of the city.

A brief online search offered an example: On Zillow, one home on Selma Avenue is listed for $174,900. The site says it was sold in May for $50,000.

Nikitia Thompson, who was born and raised in East Knoxville, sees good and bad in urban revitalization.

“You have the ones that want to stay here that have been here two, and three, and four generations, that now may have to move out and they can’t afford to live here,” Thompson said. That’s the bad.

The Community Development Administrator for the City of Knoxville, Linda Rust, also sees the problem.

“Rent and values of homes to purchase, those have just increased dramatically, and significantly more than wages have increased,” Rust said.

Latest data collected by the city shows, in four years, housing prices in Knoxville went up 10%, rental rates increased 26%, but household incomes went up just 5%. That’s one issue behind the incredible need for affordable housing options in the city.

Another issue is supply and demand.

Thompson, a real estate broker, noted fewer than 900 properties are currently listed for sale. She explained that’s about a month and a half of inventory; a healthy supply would be about four times that number.

Rust noted problems associated with displacement and affordability have been made worse by the COVID-19 pandemic. Rising costs largely impact those living in the low-to-moderate income category, who depend on affordable rent or struggle meeting rising home costs.

More than one-third of households in Knoxville are considered to be “paying too much” for housing, based on their income. Rust also outlined ways the city is working to offset the negatives of revitalization.

The city of Knoxville has spent tens of millions of dollars in recent years to maintain existing affordable housing, and invest in new units, like the Village at Holston Court, which just started accepting tenants.

“Seeing people live here makes me very happy, because there is such a need,” Rust said.

The city also invests in various programs aimed at helping people keep their homes, or buy. Through the owner-occupied rehabilitation program, the city helps low-income homeowners with repairs, or with energy upgrades, which ultimately lower housing hosts. One initiative offers mortgage or down-payment assistance. The city also funds nonprofit, community, organizations, that offer assistance for low-income families.

As a real estate broker, Thompson works to connect people to these programs, to enable families who want to stay in East Knoxville to stay in East Knoxville.

“All of my good friends, we all came from here, on this street, in this community, and we know this is a great community,” Thompson said.

She’s also passionate about first-time home buyers and empowering families to build wealth, and avoid skyrocketing rent prices. She pointed to economic factors, such as a lack of locally-owned businesses in East Knoxville. Many places she recalled serving the community, including a grocery store a couple blocks away from her childhood home on Prentice Avenue, are gone.

“We had all those things going on…some things are still there, a lot of things are not,” she added.

Her parents bought the home she grew up in for around $9,000 more than 40 years ago. They later moved elsewhere, but kept the property and rented it for 15 years. The added incomes helped put Thompson, and her sister, through college. Then, her parents sold it to a first-time homeowner, their longtime tenant.

“Now she has equity in her house. So, she can actually now pass that on to generations. I think everybody has to find their place in all of this,” Thompson said.

Ultimately, Thompson is hopeful for the future of her community. She believes there are enough innovative minds in the city to find ways to create an environment “for everyone,” with the services needed for every community.

If you’re interested in selling your home, Thompson recommends calling a realtor first. She explained there is a no-cost service you can take advantage of, which will tell you whether you’re selling a property for the right price.

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