Chattanooga Neighborhood Enterprise will proceed with a 32-unit affordable housing project at 2003 Bailey Ave. after city and county leaders this week approved a 20-year tax break.
The tax break would enable at least half the apartments to be affordable for people making about $45,000 per year, which is 80% of the area median income. Rent would be $1,195 per month for one-bedroom apartments and $1,434 for two bedrooms, according to a breakdown.
(READ MORE: Financing plan approved for more affordable apartment complexes in Chattanooga)
The Chattanooga City Council and the Hamilton County Commission both voted this week to move forward with a payment in lieu of taxes agreement with Chattanooga Neighborhood Enterprise, meaning the organization won’t have to pay property taxes on land improvements at 2003 Bailey Ave. over a 20-year period, according to the contract with the city. It will, however, continue to pay the portion reserved for Hamilton County Schools.
Chattanooga Neighborhood Enterprise expects it will cost $5.9 million to build the complex, and the tax break will provide an annual savings of $53,000. The tax break was necessary to hold rents at those levels, officials said.