published Sunday, October 7th, 2012

Hold the housing mandate

Chattanooga's urban and downtown revival, as in other re-emerging cities, has been accompanied by new and rehabilitated housing in the urban core as more people seek the convenience and ambiance of living in or near downtown. That may well help spur housing costs in both rental units and home purchases in urban neighborhoods over time, and negatively affect already burdened middle to low-income residents whose income isn't keeping pace with rising housing costs. The question now posed by urban residents who feel threatened by the potential costs of gentrification is what to do about it.

The Westside Community Association, aided by research and organizing work by the activist group Chattanooga Organized for Action (COA), has put this question to the City Council. But it's done more than raise the issue; it has also asked the City Council to adopt an affordable housing policy. The proposed ordinance would require housing developers in specified urban core Census tracts -- mainly those from Missionary Ridge to downtown, and from North and East Chattanooga to St. Elmo -- to designate 10 percent of newly developed housing units for affordable housing.

There apparently are considerable precedents and undeniable merit for such a proposal. Chattanooga has a lower rate of affordable housing than Tennessee's other large cities, and due to declines in federal and state support, housing initiatives by the Chattanooga Housing Authority have fallen badly behind the number of low-income residents seeking affordable housing. Chattanooga Neighborhood Enterprise has also lagged housing needs in recent years.

Research obtained by COA from a Massachusetts planner reports that two states and more than 200 cities have adopted model "inclusionary" prescriptions for new housing in core urban areas. Among these are Chapel Hill, N.C.; Franklin, Tenn.; Boulder, Colo.; Montgomery County, Md.; Massachusetts and 170 jurisdictions in California.

Some of these inclusionary plans, a look online shows, provide financial incentives to developers in the form of zoning and density waivers or tax abatements to help offset the costs to developers of providing affordable below-cost units for families with moderate-to-low incomes. Such incentives would be fair, and probably necessary, if private developers of market-rate housing were to be required to set-aside housing units in each new development in selected neighborhoods.

City Council members need to take the housing petition seriously, but there's a lot of research to be done before they draw up any mandates. Among the apparent issues are the justification and broad impact of an affordable housing mandate, and, if it's needed, whether the city should designate only an urban core prescription, or seek city-wide or county-wide policy.

It seems likely that if developers found the costs too high to set aside housing units in every development in the urban core, the result might be to drive more building outside of the urban core, or even outside the city. The latter could promote sprawl while simultaneously depressing the desired rate of emerging housing growth downtown to sustain the city's revival.

Affordable housing is a compelling issue. Yet more study and broad conversations with all stakeholders are needed before city government considers imposing any mandates.

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nucanuck said...

The cost of construction for affordable housing is virtually the same as market rate housing which means tax payer funded subsidies must come into play to create 'affordable' housing. The minute subsidies come into play we get pigs at the trough fighting over government largess.

Raising wages and narrowing wage differentials are better approaches to building a stronger middle class.

I marvel every day at the social success I see here in Victoria BC with pay scales higher for all levels of skilled work. The cost of living is higher, taxes are higher, with poverty and illiteracy being rare. The quality of life is high and general contentment is epidemic.

There are some builder subsidies to insure a small percentage of lower rent housing within each project, but more importantly, lower rents are not within zones that tend to ghetto-ize a city. I do not know of a single neighborhood in the entire city that would be considered dangerous.

It seems that the best way to build lower cost living units is to build them smaller. Apartments as small as 300 sq ft are on the drawing boards here because that is what is required to meet some budgets. 450-700 sq feet would be the norm for new units.

October 7, 2012 at 1:32 a.m.
aae1049 said...

Chattanooga's addiction to Pilot tax abatement is out of control. The basis or minimum standards for issuance of PILOTS is purely arbitrary with no real analysis on whether the taxpayer investment will return form developer and industry. PILOTS should not be used or abused for developers to enrich themselves. The real solution is more public housing and beefing up the HUD voucher Section 8 program. Our city is tax abatement hurting for revenue.

October 7, 2012 at 11:25 a.m.
Dumbledore403 said...

I am sorry but delaying to do what is needed to happen will just increase the problems that not having affordable housing is giving now. Over 200 cities and 2 states has it so there is no reason that we cannot.

October 7, 2012 at 3:10 p.m.
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