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.
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.
The three-building project would occur on a roughly half-acre of land. Of the 32 units, 20 would be one-bedroom apartments and 12 would have two bedrooms. The land is currently vacant.
The nonprofit has also received eight vouchers from the Chattanooga Housing Authority, which will help cover rent for another eight of the 32 units. Thanks to federal funding, an additional seven units would be reserved for people earning at most 60% of the area median income. In Chattanooga, 100% of the area median income for one person is about $55,800.
The average rent for a one-bedroom unit in downtown Chattanooga is $1,439 and $2,100 for a two-bedroom, according to the rental website Zumper.com.