City reworks controversial housing tax breaks

City reworks controversial housing tax breaks

July 19th, 2016 by Joy Lukachick Smith in Local Regional News

Mayor Andy Berke walks past openings for office windows during a tour by city officials of the future Family Justice Center on Wednesday, June 15, 2016, in Chattanooga, Tenn. When completed, the center will offer services to victims of domestic violence.

Photo by Doug Strickland /Times Free Press.

Chattanooga Mayor Andy Berke announced this morning that the city and county will retool a tax incentive program for developers who build rental property downtown. 

City leaders said the current housing program did what it was intended to do and helped spark the market with 2,100 new rental units coming online in the next two years. 

But the controversial payment-in-lieu-of-taxes, or PILOT, program won't completely end, Berke said. The city will still retain the right to award developers with a tax incentive if they believe the project creates a significant amount of affordable housing. 

That means the city will no longer accept projects that set aside 20 percent of their rental units for renters who meet 80 percent of the area median income — the current standard to receive a PILOT —  but the city might consider a tax incentive to a developer who is willing to set aside 50 percent of their units at an affordable rate, the mayor said. 

But the mayor didn't give specific guidelines that developers will have to meet to still receive a tax incentive. 

"[The tax incentive] will be considered on a case by case basis," Berke said. 


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