Memphis, September 27, 2025
News Summary
Memphis is facing a significant housing crisis driven by rising construction costs coupled with a shortage of affordable housing options. With an annual income of at least $91,000 required to buy a home, this disparity highlights the challenges residents face. Efforts by the city include a $1 million Middle Income Housing Program and improvements in permit processing to boost the construction of affordable units. With new developments appearing, such as customizable homes in Soulsville, city officials aim to tackle this pressing issue.
City of Memphis Faces Housing Crisis as Construction Costs Rise and Affordable Options Dwindle
The City of Memphis is grappling with a housing crisis worsened by soaring construction costs and a decrease in affordable housing options. Current data reveals that to buy a home in Greater Memphis, one needs an annual income of at least $91,000. Yet, the average annual salary for workers in the transportation sector is around $43,000, and the median income in the city is just over $51,000. This discrepancy highlights the growing divide between home prices and income levels.
According to Memphisโ chief of infrastructure and development, John Zeanah, hidden costs associated with building homesโsuch as upgrading old infrastructure to connect to utility and sewer linesโadd $20,000 to $40,000 per new construction. This financial strain is coupled with a dearth of new housing developments; only 11 new home construction permits were filed in the 38126 zip code from May 1, 2024, to May 1, 2025, with developer Casey Cooper holding five of those permits.
In an effort to counteract these challenges, new affordable housing options are emerging in neighborhoods like Soulsville, where customizable homes are priced around $240,000. Cooper, who moved to Memphis in 2021, is focused on developing homes that meet the communityโs needs. However, he emphasizes that building affordable homes requires more than financial investment; it also necessitates the establishment of essential services such as grocery stores, schools, and safe walkways.
The City of Memphis has launched a $1 million โMiddle Income Housingโ Program to help offset construction costs. Additionally, progress has been made in awarding funds for mixed-use projects that have created nearly 50 housing units in the Medical District, including successful developments like 24 units at Leath Quad Community and 23 units at Bellevue Montgomery Development. Since 2021, the city has also provided down payment assistance to 87 households, furthering its efforts to alleviate housing challenges.
In terms of urban development, City leaders are modernizing permitting processes and simplifying zoning laws to stimulate construction and create workforce housing. Recent zoning changes have reduced the minimum size for urban lots to 3,000 square feet and allowed increased flexibility for accessory dwelling units and townhouses. Zeanah’s team has improved the permit response time to an average of 2 to 3 days, with overall project times now under a month.
A housing task force established in 2024 aims to identify policies to increase housing supply, with a focus on land acquisition and financing. Collaborations with organizations like Jones Urban Development are underway to build more affordable housing, advocating for the reduction of development barriers. Jones Urban Development has reported significant savings by eliminating unnecessary costs, such as sprinkler requirements, generating savings of $20,000 to $25,000 per building.
While housing prices continue to rise, with the median listing price reaching $347,200 in June 2025โa 51% increase since 2019โMemphis is also observing a housing boom in nearby Millington, which has issued 5 to 7 building permits per week. An estimated 250 new residential permits are expected for the year 2025 in that area.
Looking ahead, the City of Memphis is in the process of a five-year update to its comprehensive housing plan, which will encompass new zoning and flexible development options, including exploring modular construction strategies. These efforts aim to enhance the availability of affordable middle-housing options, addressing a critical need in the community.
FAQ
What is causing the housing crisis in Memphis?
The housing crisis in Memphis is primarily caused by rising construction costs and a decrease in affordable housing options, creating a significant gap between home prices and local income levels.
How many new home construction permits were filed in the 38126 zip code from May 1, 2024, to May 1, 2025?
Only 11 new home construction permits were filed in the 38126 zip code during that period.
What is the annual income needed to buy a home in Greater Memphis?
To buy a home in Greater Memphis, one needs an annual income of at least $91,000 according to Realtor.comโs April home report.
What programs has the City of Memphis initiated to address the housing crisis?
The City of Memphis launched a $1 million โMiddle Income Housingโ Program in October 2023 to offset construction costs and has provided down payment assistance to 87 households since 2021.
What are some recent developments in affordable housing in Memphis?
Recent developments include nearly 50 housing units in the Medical District and new affordable housing options in Soulsville that are priced around $240,000.
Key Features of Memphis Housing Crisis
| Feature | Details |
|---|---|
| Rising Construction Costs | Hidden costs add $20,000 to $40,000 per build. |
| Affordable Housing Options | Customizable homes at about $240,000 are emerging in Soulsville. |
| Income Requirement | Annual income of $91,000 needed to buy a home in Memphis. |
| Construction Permits | Only 11 new home construction permits in the 38126 zip code from May 2024 to May 2025. |
| City Initiatives | $1 million Middle Income Housing Program launched in October 2023. |
| Recent Developments | Nearby Millington experiencing a housing boom; 250 new residential permits expected for 2025. |
| Permit Processing Improvement | Permit response time improved to 2-3 days. |
Deeper Dive: News & Info About This Topic
HERE Resources
Memphis Theater Scene Flourishes with Community Support
Habitat for Humanity Begins New Affordable Housing Project in Memphis
Financial Crisis Faces Memphis-Shelby County Schools
Habitat for Humanity Breaks Ground in Uptown Memphis
Memphis City Council to Reconsider Blight-Remediation Ordinance
University of Memphis Closes Office of Multicultural Affairs
Memphis Urban Farming Initiative Empowers Veterans
Tennessee Launches Initiative to Combat Food Insecurity and Health Disparities
Memphis-Shelby County Schools Faces Teacher Shortage Ahead of School Year
University of Memphis Faces Enrollment Challenges
Additional Resources
- Daily Memphian: Habitat for Humanity of Greater Memphis North Housing Development
- We Are Memphis: Memphis Tackles Missing Middle Housing
- Action News 5: New Program Looks to Bring More Affordable Housing to Memphis
- Forbes: Memphis Mobilizes to Deliver on Missing Middle Housing
- Local Memphis: MUS Announces $200 Million Construction Plan
- Wikipedia: Housing Crisis
- Google Search: Memphis Housing Crisis
- Google Scholar: Housing Affordability Memphis
- Encyclopedia Britannica: Housing
- Google News: Memphis Affordable Housing
Author: STAFF HERE MEMPHIS WRITER
The MEMPHIS STAFF WRITER represents the experienced team at HEREMemphis.com, your go-to source for actionable local news and information in Memphis, Shelby County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the areaโwith deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Beale Street Music Festival, Elvis Week, and Memphis in May International Festival. Our coverage extends to key organizations like the Greater Memphis Chamber and the Memphis Convention & Visitors Bureau, plus leading businesses in logistics, healthcare, and music that power the local economy such as FedEx, St. Jude Children's Research Hospital, and AutoZone. As part of the broader HERE network, including HEREBristol.com, HEREChattanooga.com, HEREKnoxville.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
