- (female announcer) Production funding for Behind the Headlines is made possible in part by the WKNO Production Fund, the WKNO Endowment Fund, and by viewers like you, thank you.

- Infrastructure and development in Memphis tonight, on Behind the Headlines.

[intense orchestral music] I'm Eric Barnes with The Daily Memphian.

Thanks for joining us.

I am joined tonight by John Zeanah.

He is the new Chief of Development and Infrastructure for the City of Memphis.

Thanks for being here again.

- Thanks, Eric.

Along with Bill Dries, reporter with The Daily Memphian.

I say new, it's a new job completely for the city that was created this past summer.

You've been with the city and in many different roles.

We were talking before the show, I think this is the fourth role, all with the city or around the city that you've been here under, but let's do the quick snapshot.

What is this role in 30 seconds or less?

And then we'll dig into all the parts and pieces.

- Sure, so it's chief-level position in the Mayor's Office that coordinates the internal divisions and quasi-city agencies that have roles or responsibilities related to planning, housing, community development, economic development, and infrastructure with the goal of bringing cooperation and collaboration across those agencies so the city can take a more proactive approach to ensuring that our physical built environment has a dedicated focus within the Mayor's Office.

- Is it all public infrastructure?

Or is it overlapped with, you know, private/commercial redevelopments and developments?

I mean, where are the lines with that?

- Well, certainly when you think about the role of the planning department, HCD, you think about- - Housing and Community Development?

- Housing and Community Development.

- Yep.

- But then you also think about a lot of our, what I refer to as sort of quasi-city agencies, like Community Redevelopment, EDGE, and the like.

There's a lot of relationship with the private sector, public-private partnerships that are involved in making projects work in our city.

And so having a role that is cutting across all of those elements, I think, is important to ensure that we're maximizing our ability to leverage our public resources with how we're making things move in the private sector as well.

- You said streamline, I mean, is it just, I mean, people have talked about, I think, as long as we've been doing this show, and just there is a lack of efficiency in certain areas.

You know, you go to one place for your things like building permits, and then you've got code enforcement, you've got, you know, your incentives, you've got who fixes the sewers versus who fixes the road, versus the sidewalks.

You've got Downtown Memphis Commission.

I mean, all this kind of all the alphabet soup of agencies is not always as efficient as people want it to be, so that is what you're trying to address?

- That's exactly right.

That's a big part of what we're trying to address.

Part of that is through, you know, process efficiency that we can put in place by working across these agencies.

Part of it is just having, whereas before, you know, these responsibilities are cut across these different agencies, having a little bit more formal means of cooperation across functions that have been fractured among so many agencies.

- Yeah, let me bring in Bill.

- So a project is happening, it may be a private development, let's say, but the public infrastructure that goes with it, I mean, you can build the best private development, but if the roads aren't there, no one can get to it, right?

I mean, that's kind of the philosophy here in an oversimplified way, right?

- In a lot of cases, what happens is, you know, we rely on the private developer to provide the public infrastructure, and then it comes to the city, but many times, in order to make a deal work, to make a development work, there's gotta be support by the public sector in one way or the other.

And so one such type of incentive would be for the city to work with the developer, maybe through tax increment financing, for example, to help fund the public infrastructure in another way.

Having this role allows us to be a lot more nimble and responsive to the individual needs of development projects, understanding how we can, again, sort of work across what is now really close to a dozen divisions and agencies that have some type of responsibility in either community development, economic development, or infrastructure, so that we can be more seamless, and be more responsive to the needs of development.

But, another part of this, too, is just getting the fundamentals right for how we're impacting the physical built environment of our city, whether that is, you know, buildings that go vertiCal, or whether it's public infrastructure.

There's a lot of need for coordination so that we can make sure that we have strategies that help us increase our housing supply, that we have strategies that allow us to maintain and increase the standard of service for our infrastructure.

And so this role, and what I've brought to this role, I think helps to elevate how we've approached those things in the past.

- And affordable housing is a huge issue.

A lot of people are working in that area.

What's the public role in helping to make that happen, and helping to make it happen on a continuing basis?

- So there's a lot of roles for the public sector here.

So we think about the work that needs to be put toward not just affordable housing, but increasing our housing supply generally, and really, four sort of main dimensions.

The first being regulatory, which obviously, the public sector has a significant role in helping to move forward.

You know, of course, my past role with the city was I was director of Planning and Development for seven and a half years.

One of the main things that Planning and Development does is obviously, the long-range plan, Memphis 3.0.

Then also, they administer our zoning and subdivision regulations, the UDC, Unified Development Code, for the city and county.

There are a lot of restrictions around what can be built that are in your zoning and subdivision regulations, and so working through the zoning and subdivision regulations to allow more types of housing, allow more and different types of affordable and attainable housing is a major role for the public to play, public sector to play, but there's a lot of connections across the building code, stormwater regulations, service development fees and charges, and rules and regulations from Public Works and MLGW.

All of that is just within the regulatory bucket.

There's also areas of land acquisition and availability, funding and financing, workforce development, all of those are roles that the public sector either can play or be a major participant in that need to be leveraged in order to see us increase supply of housing in our community.

- So from where you sit, having described all of that, how daunting is the task of creating affordable housing, not just for homeownership, but the combo of rental and homeownership?

- Well, I wouldn't say it's daunting.

There certainly are solutions to doing this.

We've gotta work across those four dimensions, and we need to make sure that we've got all of the right strategies and tools in each of those four dimensions in order to move things forward.

Right now, we're at a point where just the cost of constructing housing is so high, and it's particularly high when you compare it to the value of property, the value of housing in a lot of parts of our city.

So the recent estimates I've gotten from, you know, some of our nonprofit developers to build a 3-2, it's costing, you know, $200,000 to $225,000.

You know, you put that in a lot of neighborhoods in Memphis, that's the most valuable house in the neighborhood, so already, the appraisal on that house is gonna be under the amount that was put into building that house.

So those are big issues that have to be overcome.

There are certainly a lot of ways that we can help bridge those gaps.

Funding and financing is part of it, but we cannot subsidize our way out of this.

We've gotta be able to use those other tools, like some of the regulatory measures that we talked about.

And, you know, one of the things that we started towards the end of my time as director of Planning and Development, and that we're still working on now, is through the update of our comprehensive plan, looking at how our zoning map needs to be updated to allow for more housing types to be built in more areas throughout our city, updating the UDC so that we have a little bit more variety and flexibility, as well as clarity in how we are regulating housing from zoning and subdivision regulations.

So there's a lot of opportunities that I think carry over from my past role and into this one, but then touch on all these other dimensions that we're talking about.

- Right.

Is the appraisal gap a function of different values for different parts of the city?

I mean, is the appraisal gap, at some point, a fairness question for where you build new housing?

- Well, I understand where you're going with that, and I wouldn't necessarily frame it as a fairness question, though.

I certainly see why you would frame it that way.

I think a lot of it has to do with just the realities of what an appraiser's going to find in terms of comparable values in an area when they're appraising a new building.

Whether or not that's fair, I think that's maybe for somebody else to decide.

At least from the position where I sit, it's certainly a gap that a lot of builders have when they're trying to do things in the city, and not just in the city, but in neighborhoods in the city that have a lot of assets that can be leveraged for rebuilding the neighborhood.

If you think about, you know, where we have some of our highest vacancies, and we would like to get a lot more development in places like North and South Memphis, those are areas that are close into our downtown.

They're older neighborhoods, so you've got a lot of, you know, old, walkable infrastructure already in place.

You know, maybe there's a lot of road, and utility, and sewer infrastructure that is underused in those areas, so there's an advantage for a lot of different reasons to try to invest more in places like North and South Memphis.

It has advantages not just for those neighborhoods, it has advantages for downtown, it has advantages for the city as a whole, but obviously, that appraisal gap is an issue that a lot of builders face, but like I said, there are different ways to work through that.

The appraisal gap is really, you know, about a number.

How we sort of get to solving that number, I think is where a lot of these different strategies can come into play.

- Right.

The final point on that, so if you can't do enough subsidies to kind of solve the appraisal gap, what are some of the alternatives to that?

- So I'm just gonna go back to regulation for a second.

So, you know, a lot of our areas, residential areas, are zoned for exclusively single family detached, which means that you're only going to be able to get one housing unit on a lot.

So one way to solve for a gap is to be able to create additional opportunities for rental income to come in, whether that is a single-family home that's owned by a family, and then they have a secondary unit that they rent out, and so they have additional rent that's coming in to help support that way, or we're talking about creating, you know, additional units, like allowing for three-family or four-family on certain lots.

So that's one way to do it.

Another way to do it is to think about the cost of construction, and that can be cost of construction in the building itself.

So one of the things that we've worked on over the last few years in Planning and Development, and we're still continuing to work on, is how our building code treats small multi-family, and particularly how much more expensive it is to build once you go from two-family to three-family, because you go from the residential code to the building code.

A few years ago, we attempted to move three to six-unit buildings into the residential code to gain some savings.

The state fire marshal balked at that.

We were able to get a bill passed two years ago through the General Assembly that allowed for some cost reductions for three- and four-family, which are helpful, but there are still other things that were left on the table.

So recently, just within the last few months, I've worked with the state Fire Marshal's Office to be able to come up with some additional provisions that could be put in the code to allow for cost savings for three units all the way up to 24 units that I think will help bring a lot of different styles of housing back.

Not just the three and four units, but I think it helps to, you know, bring some garden apartments back, which, you know, we see in sort of older parts of- - Cottages, that, yeah.

- Yeah, cottage, of course, absolutely.

So that helps in terms of the cost side.

I mentioned development charges is another one.

So the cost to connect to sewer, we have already in our sewer ordinance, if you're producing a unit of affordable housing and you're a nonprofit developer, you can petition to have your sewer development charge cut in half.

The issue is we have a lot of for-profit developers who are trying to build in, you know, areas like North and South Memphis, and they're building affordable housing, they don't get the same benefit.

If our goal truly is affordable housing, it shouldn't matter whether it's for-profit or nonprofit, so that's another way that we can sort of work our way back in terms of the cost of construction, and take that gap down to something a lot smaller.

- We did a show on affordable housing with some of the folks, nonprofit folks, The Works, United Housing, you can get that at wkno.org or go to YouTube and search for "Behind the Headlines", that got in all of these kinds of issues and the challenges they face right now.

Let's switch, another big part of your purview in this role is roads, and so let's break the roads.

I mean, people sort of drive around and think it's all these roads and highways, and it's all the same thing.

You've got state highways, you know, 40, 240, you've got the roads of the city, you've got county, you know, unincorporated Memphis, those kinds of areas, unincorporated Shelby County, I should say, and you've got state thoroughfares.

It's just a thing I constantly harp on with elected officials, is, you know, things like Poplar is actually a state road.

So how do you deal with that?

And it's a thing, I remember when Jim Strickland was first coming on the show, and he first won the mayor's race, and he had all these big plans, and all these things he wanted to do, and he'd go to a community meeting, and the entire meeting would be taken over with potholes, just conversation about potholes.

And he kind of knew it, but he didn't.

He joked about it, like, that's what really people were caring about, was just simple stuff like that.

What do you do about... Where do you wanna start in that?

The city roads, and then we kind of go from there?

- Sure.

So as you said there, you know, there's really the city roads that the city maintains, and some of those are major roads like thoroughfares, and obviously, many of them are local roads through neighborhoods.

You've got state thoroughfares, Poplar's a great example, and you've got interstates, interstates also being state responsibility.

So for the city roads, you know, what we see is there's a couple of things.

Number one, just the ongoing maintenance of those roads is something that is very much a major concern of many citizens, and potholes is obviously is the issue that always rises to the top, but resurfacing, repaving is something of major concern.

There's also, you know, sort of the stormwater drain inlets that are along the side of many local roads, which are a major concern, create issues not just for the stormwater system, but for the roads as well.

So one of the things that we've been working on, The Daily Memphian did a story not too long ago about potholes, how the city responds to potholes, and one of the things that was mentioned in that article is that, you know, it's largely a reactive type of approach, where, you know, citizens call in complaints to 311, we have crews that go respond to those complaints, and, you know, fill the potholes.

I couldn't give you a guess on what percentage of the actual issues that are out in the field we hear about through 311 complaints, but it's certainly not the majority of them.

So we've got a lot of issues that the city has to address that aren't being addressed through a reactive system like that.

So one of the things, and we're gonna talk, actually, with The Daily Memphian, I think, next week about this.

One of the things that we've done is to pivot towards creating a proactive approach to taking care of many of those issues, pothole repair, stormwater drain inlet cleaning, street sweeping.

We've created an approach where we're going through our city thoroughfares now in 10 grids across the city.

We're about to complete all of those roads within one quarter sweep, and just proactively identifying and addressing all of those issues.

- And so then there's the state roads.

So back in the day, and I think it was Strickland who changed this, and if it's not, he'll text me and tell me clearly that I was wrong, but I think it was early in the Strickland administration that the state used to pave, or deal with, or maintain the state thoroughfares, like Poplar, but there are many others, and then send a bill to the state.

And part of the frustration was the state really wasn't covering nearly anywhere near 100% of what the city was doing with that maintenance, but it doesn't seem like the state has really particularly upped its game to take care of these roads.

Is that unfair?

And just how do you manage that?

How do you get the state to come and fix these main roads?

- Yeah, I don't think that's an unfair characterization at all, and if we're being honest, I think TDOT would also agree that that's not an unfair characterization, so you're correct.

When Mayor Strickland was in office, you know, the protocol was, you know, there's an agreement between the city and TDOT.

The city would perform maintenance on those state thoroughfares, send a bill, the rate of compensation that the city got from TDOT was very low, did not match the level of effort and resources that were going in to doing the work.

Since that agreement has been voided, I think that you're correct, what we haven't seen is TDOT coming in and providing a level of maintenance that is comparable to what we would do, but also, what I think our citizens expect and deserve.

So one of the things that we, since I've taken this role, that I've done, is to meet with the TDOT commissioner, meet with the regional staff, talk through, you know, what the issues are that they're having in order to perform the necessary maintenance on interstates as well as state thoroughfares.

And so there's a few things that they're doing and that we're working towards that I think have some promise.

- So here, the issue seems like they're not doing it, right?

I mean, the issue, as a person driving around, it's like, yeah, the issue is they're just not doing it very often, but you're gonna tell me that they have deeper, it's more complicated than that?

It just feels like a choice to not, I mean, they've got money.

The state isn't hurting for cash.

- They have money, you're correct.

The way that they have the maintenance set up is essentially, they've got in-house crews that are responsible, in-house staff, okay, FTEs that are responsible for this maintenance.

The issue is that they have a lot of those positions that are vacant.

So there's not nearly enough resources on the ground - Right.

- Here in Shelby County from TDOT to perform the responsibilities that they need to perform.

They also have a contractor that they use for grass cutting, that sort of thing, along the interstate.

That contractor is working all over West Tennessee.

So how those resources have been put into place are not meeting the needs that we have here.

So what they're working towards, though, first, is TDOT, they've already begun paving.

They've got a plan for paving 200 lane miles of interstate roads.

They've already begun on many stretches of road, and this will run through, I think, May that that schedule is, so, and they're also working now to put in what they're calling a performance-based contract, where they're using those resources, Eric, that you mentioned that they do have available to them to essentially bring on multiple crews of contractors under a performance-based contract so that they're delivering services in a way that can only be maximized by the highest level of service.

That's along the interstates, and so what they say is, "Well, that's gonna help "put the resources that we have in-house on many of these thoroughfares to the city," but as I just said, they're understaffed there, so there's still a gap, all right?

- I know this is not your fault.

I mean, I am acting like it's your fault.

- Oh, sure, sure, sure.

- But, I mean, people.

- But they're just- - It drives people nuts.

- It does, it drives us nuts, too.

- Yeah.

- And to your point, the city has a responsibility, because these roads go through the city to figure out the solution.

So one of the other things, too, I'll just mention, - Yeah.

- Is that we've talked with them about if the city got back into a contract with the state, having that to be much more fair to the city relative to the compensation that we're getting to do the services, but also allowing us, essentially, their words, a la carte, an a-la-carte approach to where the city is able to perform the services that we're good at, and then we are able to hold TDOT responsible for other services that we still need them to perform on those roads.

So this is early on, I want to caveat that.

- Yeah.

- But I think there have been some really great discussions, and I am sure you know this, the new commissioner of TDOT is a Shelby County native.

He's from Bartlett.

And, you know, - Yeah.

- I think he's very much attuned to these issues that we have here, not just in West Tennessee, but in Memphis and Shelby County.

- We've got really just a minute, really, about 30 seconds left.

Has federal funding changed at all?

Federal funding to HCD, to the roads?

Have you all seen cuts, increases, steady state?

- Formula funding generally has stayed about the same.

We haven't seen really any issues there.

I think part of the concern right now relative to federal funding is some of the grants that were awarded to the city during the Biden administration still haven't gotten under contract yet, but they haven't been pulled.

- So much more we could talk about.

We'll have you back, but thank you.

Thanks very much for being here.

Congratulations on the new role.

People will probably be texting you about potholes now, and roads they want fixed, so I hope they do.

Can't wait, exactly.

Thank you, bill, and thank you all for joining us.

If you missed any of the show today, you can get the full episode online at wkno.org, YouTube, or The Daily Memphian.

You can also download the podcast version of the show wherever you get your podcasts.

Thanks very much, and we'll see you next week.

[intense orchestral music] [acoustic guitar chords]