In 1980, Ronald Reagan asked Americans: Are you better off than you were four years ago? Enough of them thought the answer was “no” that Reagan beat incumbent Jimmy Carter and was president for the next eight years.
The Memphis mayoral election on October 4th will be an indicator of how well off Memphians think they’ve been since Willie Herenton was elected. Except Herenton has been in office for 16 years, not four years, which is so long that it may be hard for some people to imagine Memphis without him.
You want signs that things are bad?
If you are statistically inclined, a national survey of home loans by the community activist organization ACORN says Memphis is highly vulnerable to foreclosures because 46 percent of home purchase loans in 2006 were high-cost subprime loans. Memphis ranks first in the Southeast and sixth in the country in such loans.
If you are profit-minded, another survey, by CNNMoney.com, ranks Memphis ninth in the country in the number of foreclosures. One man’s misfortune is another’s opportunity, and last week something called the National Foreclosure Institute ran full-page ads in The Commercial Appeal for a series of workshops on how to make money off of this. Along with 10 other people, I attended one of the workshops this week. The speaker said, “You are sitting on the tip of the greatest fire sale in real estate history” — which you can exploit by taking their course for $1,495.
If you are fearful, you may have heard mayoral candidate Carol Chumney say in a debate this week that crime is so bad that Memphians are afraid to walk to their mailboxes, which, if true, will make voting problematic.
If you are nostalgic, you may have heard mayoral candidate John Willingham say in the same debate that the Mid-South Fairgrounds was a great place 40 years ago before Memphis lost, by his unofficial count, 115 major corporations.
If you are disgusted, you can move out of Memphis to the suburbs or to DeSoto County, Mississippi, the fastest-growing county in the state.
Thousands of people will vote for Chumney, but the one vote she needs is Herman Morris’. Thousands of people will vote for Morris, but the one vote he needs is Chumney’s. Apparently, neither one of them is going to get it. They are beating each other up instead.
That has to please Herenton. He won’t get the votes of the people who have thrown up their hands and moved or are scared to walk to their mailboxes or foresee the greatest real estate fire sale the world has ever seen or long for the good old days. He will, however, get votes from Memphians who think they are better off than they were 16 years ago, which could be enough.
On the bright side, Memphis is growing a bit, from 650,000 in 2000 to about 670,000 today. Before the housing bust, there was a housing boom from downtown to Whitehaven to Hickory Hill to Cordova. Inner-city housing projects came down. Robert Lipscomb, the city’s chief financial officer, says 16,000 Memphians became first-time homeowners in the last 12 years. The foreclosure crisis, he agrees, is real, especially in Hickory Hill and Frayser. “On the one hand, there is upward mobility,” he says. “On the other hand, there is no margin for error” if the buyer gets sick or loses a job.
Webb Brewer, head of Memphis Legal Services, says there’s a fine line between the benefits of the housing boom in Memphis and the excesses of a housing bust. “A decade ago I was championing the cause of home ownership, and people were talking about creative financing,” he says.
Now, he helps victims of predatory lending, creative financing’s evil twin.
“The big question,” Brewer says, “is how many people who got into the housing market were able to sustain it?”
If the foreclosure rate on subprime mortgages is 15 percent, is Memphis still better off? What if it is 30 percent? Does that mean 70 percent achieved the dream of home ownership? As Herenton has noted, it’s the nature of the media to report the bad news of crime, corruption, foreclosures, and flight. A growing middle class and a sense of well-being relative to 1991 are harder stories to tell, but they may determine the outcome of the Memphis mayoral election.
