Note: The story was changed to correct the amount of Tesco’s contract with HUD.

MEMPHIS, Tenn. — The U.S. Department of Housing and Urban Development announced it’s ending its contract with the owners of the Peppertree apartments in Whitehaven after a long history of maintenance and crime issues.

The owners of the complex, Germantown-based Tesco, had a contract with HUD worth about $2.3 million a year for 10 years.

Tenants and government officials applauded the move, but acknowledged they now face the major task of relocating the people living in Peppertree’s 300 units.

Mayor Jim Strickland said the city started making a plan for this about a year ago when they asked courts to intervene.

“We actually found apartments in Whitehaven for all those families,” he said.

Now, HUD is taking the lead on relocating the residents with the help of the city of Memphis, the Memphis Housing Authority and a contractor called Leumas.

Housing experts tell the WREG Problem Solvers they have concerns about the Peppertree families and greater state of housing in Memphis.

“It’s pretty dire,” said Mary Hamlett, vice president of family programs at the Metropolitan Inter-faith Association.

Since 2021, MIFA has had more families than ever coming to them for help with homelessness, she said.

In fact, she says Memphis-Shelby County Schools saw an increase of 500 more students experiencing homelessness last year, up about 25 percent from the previous year.

She wanted to draw attention to the housing crisis a the biggest emergency facing the community.

“When people don’t have places to live and call home they become disconnected to the community,” she said. “I believe in some way that contributes to the crime were seeing. These are people who don’t feel like they’re part of Memphis so why should they care?”

She predicted the Peppertree displacements would add to the problem.

“I don’t think anybody has the resources to respond to that big closure because we don’t have enough properties to place people in,” Hamlett said.

Strickland acknowledged the uphill battle and said relocating Peppertree renters will take months.

“I don’t think anybody is going to be moved from Peppertree for a few months because it does take so long to get there,” Strickland said.

That’s why he says he’s been working for years to secure larger federal grants for affordable housing. He even met this week with other Tennessee mayors to push for the change.

Peppertree tenants tell us they haven’t gotten any information yet about moving.

Got a problem? Contact WREG Problem Solver Stacy Jacobson at 901-543-2334 or stacy.jacobson@wreg.com