A developer building homes on the former Cigna property off Goodwin Road wants the city’s blessing for a special assessment that officials said could help lower the cost of housing.
The assessment would essentially act as an extra tax charged to homebuyers who move into the upcoming neighborhood, which would in turn pay down tax-exempt bonds issued for public infrastructure. This mechanism was recently approved by state lawmakers to help spur affordable housing by cutting the cost of construction.
Hanneke van Deursen, the director of housing finance for the city, said this funding tool has been used extensively in Texas and Florida to decrease the cost of development. Tax-exempt bond financing is much cheaper than conventional debt for building roads and sewers, meaning the overall purchase price of the home is lower even though homeowners have a higher annual tax bill, she said.
“It’s not going to make your $300,000 house $200,000, but it might make a $300,000 house $280,000,” van Deursen said in an interview. “That’s the kind of incremental change we have to see.”
Chattanooga officials eye special assessment to boost affordability of Goodwin Road housing
The city’s industrial development board unanimously approved a resolution associated with the project on Monday. The item in no way commits the panel to approving the special assessment or issuing debt for the project, van Deursen said. It just preserves options for negotiations moving forward. Discussions are still in an early stage, she said.