Chattanooga: Housing costs change Main Street area

Chattanooga: Housing costs change Main Street area

March 8th, 2009 by Elizabeth Ryan in News

As Chattanooga's latest up-and-coming neighborhood, Main Street has become synonymous with artisanal bread, trendy boutiques and rising property values.

But not long ago the surrounding Jefferson Heights and Fort Negley neighborhoods were home to a diverse community of low-income renters, many of whom now are gone.

"We have a lot less low-income people living in our neighborhood now," said Marion Pound, 35, who moved to Jefferson Street five years ago. "That's been disappointing to us, because the real draw was that we would be able to live around all different types of people. ... The slow displacement of all of those people worries me because I feel like they're being priced out of our neighborhood."

Homes that five years ago sold for about $60,000 are surrounded by properties that are selling for about $200,000, according to Larry Means, a member of the Southside Historic District Neighborhood Association.

Mr. Means, who has advocated a greater mix of affordable rental and sale properties in the area, said initial efforts by nonprofits such as Chattanooga Neighborhood Enterprises to develop affordable housing have been supplanted in recent years by market forces.

"As the private developers moved in, that whole initiative just got pushed aside," he said. "The private homebuilders and the private people don't care about affordability ... if they can push up prices to $200,000 and $300,000, that's what they're going to do."

Indeed, the erosion of affordable rentals in the area is tied to the history of CNE, which once helped develop many of the rental properties near Jefferson Park that no longer exist.

In the mid-1990s, the city agency renovated properties in the area and rented them to people with Section 8 vouchers, according to Rayburn Traughber, former CNE chief operating officer and president. The cost to maintain the buildings soon outpaced revenues, however, and between 2005 and 2006, CNE lost $1.2 million on its rental portfolio alone, he said.

The agency subsequently shifted its focus from rentals to homeownership and helped many low-income residents become first-time buyers, he said. Some CNE duplexes were sold to private homeowners and others were torn down and the lots sold to private developers, he said.

Tenants who were affected by the changes in CNE's policies were moved to other CNE properties or given cash incentives and moving expenses, Mr. Traughber said.

Looking back, he said, the agency could have done more in the early stages to promote affordable homeownership, but the strategy to develop a mixed-income community largely was successful.

"You can't build all-poor neighborhoods," he said. "I think it (the agency's strategy) really revolutionized that neighborhood and changed it around and made it stable, and you still have some affordable rentals in the neighborhood."

In the Fort Negley neighborhood, many residents - new and old - seem pleased with what's going on. Ken Hays, former president of RiverCity Co., who lives on Mitchell Avenue, said he likes that his new neighbors sit on their front porches and talk, and that neighborhood children feel free to play from house to house.

"It's a combination of young folks, old folks, artists, blacks, whites, Hispanics," he said. "There is a heck of a lot better sense of community on Mitchell Avenue than there was on Glenway Avenue where I lived on Signal (Mountain)."