Chattanooga may get another 80 units of affordable housing within the next year.
In a recent special meeting, Chattanooga Housing Authority board members authorized an option to convey up to 21 acres of vacant land near Cromwell Hills Apartments to Pennrose Properties.
The Philadelphia-based company proposes building 70 to 80 units of two- and three-bedrooms apartments at the northwest corner of Camilla Drive and Cromwell Road.
"In Chattanooga there is a very large demand for affordable housing," said Mark Straub, Pennrose's senior development officer. "We should look at every opportunity we can to get quality affordable housing in the community."
If all goes as desired, the Tennessee Housing Development Agency will award Penn-rose Properties a 9 percent low-income tax credit, which will translate into about $8 million to $9 million to fund the development.
Although the housing authority isn't creating more public housing, it is creating housing that would serve the same customers, said Betsy McCright, CHA's executive director.
To be eligible for the low-income tax credit housing, tenants must earn 60 percent or less than the area medium income, she said.
Straub said his company considers the Cromwell area prime property for quality affordable housing because it puts residents close to jobs at industries like Amazon and Volkswagen.
Pennrose Properties and CHA are still negotiating the financial details of the lease agreement, but Straub said CHA needed to at least be willing to lease the land on Friday so that Pennrose could start preparing this week to apply for the tax credits.
"We needed some type of understanding just to start the process because it's going to cost us money to apply," said Straub.
Pennrose intends to submit its application to the Tennessee Housing Development Agency on Feb. 3. It will know in July whether the agency awarded the tax credits.
If so, construction could start as early as late fall this year and be completed in December 2015, said Straub.
Pennrose is proposing to pay a lump sum of $400,000 up front at closing to lease the site over 50 years, plus a nominal fee of $10 a year.
Pennrose would manage the property until the lease expires, when full control of the property would go back to the housing authority, said Straub.
The housing authority would retain long-term control, and that provides greater opportunity to make sure that the product being developed is of good quality, he said.
Pennrose Properties also manages the Oaks at Camden, the Villages at Alton Park and Maple Hills apartments.
Contact staff writer Yolanda Putman at firstname.lastname@example.org or 423-757-6431.