Martina Guilfoil, executive director of Chattanooga Neighborhood Enterprise, stands in front of the building in 2014.

Martina Guilfoil has been the CEO of Chattanooga Neighborhood Enterprise since 2013, leading the nonprofit organization's work to create fair access to affordable housing. She has also worked as the executive director of the Orange County Housing Trust in California, and the Rainier Valley Community Development Fund. The already daunting challenges of providing affordable housing have grown as the pandemic has driven intense demand for homes, she says. While median family incomes have increased over the years, they have not kept pace with the spike in home prices.

"If we don't have places for people to live, you have a lot of problems on the back end," Guilfoil says. "Where are your service workers? When you go to the grocery store, when you need a construction worker or a child care worker, who stocks the shelves at Walmart, who's your poultry worker? Maybe you don't think about these folks in the course of your day, but every person in your day makes your life happen."

This interview has been edited for length and clarity.

What are the most common barriers to affordable housing?

In a regular market, the challenges are the accessibility to loan products people can afford, low down payments, and people's own barriers related to credit and debt. A lot of younger people have a lot of student loan debt, and that limits what they can afford. Low interest rates have helped people, but they've been historically low, so that exacerbates something else — low rates drive everybody into the market, which drives up prices.

Really, the challenge has been income. When I first came to Chattanooga in 2013, the median priced home was affordable to someone making median income. Housing prices have skyrocketed, and while median income has gone up, folks who make $12 to $15 an hour, their incomes haven't increased substantially. That has impeded their ability to compete in the marketplace. Over time, as housing prices have risen and incomes haven't kept pace, they're left behind. In the last year, there is no inventory, and first-time home buyers are competing with investors who, sight unseen, are trying to buy houses. Realtors will tell you they have people on speed-dial, and these investors are just buying stuff.


How has the pandemic affected the affordable housing market?

We all thought the home ownership business was going to stall out, but people were at home on the real estate pages, so the Realtors never really quit working. People have realized, especially on the West coast, they could work anywhere. So the first pressure was already investors looking at Chattanooga, and then you start the pressure of you can work from anywhere, and people looked around and said, 'Where is it affordable and beautiful?' And they narrowed it down to Chattanooga and they moved here.


Does the increase in home prices benefit local homeowners?

You can get offers, but where are you going to go? This is the thing that's interesting about home equity. It's only worth something if you sell your house and move to somewhere no one wants to live. Then you can make it work for you. Otherwise, you borrow against it and it becomes debt, which is fine if you know how to manage that. In the collapse in 2008, we saw people using their homes as credit cards. I'm all in favor of people using equity to pay for college or start a business, but to pay for a car or consumer things, that's where people get into trouble.


Is this a bubble? Will it pop?

If you look at the Chattanooga market, it didn't really fall like other places, but until now it had never had great appreciation, either. This is a new phenomenon. The market was always flat. Having lived in L.A. for so many years, I can play the tape forward. It's not going to get any better, and we have to have a conversation about addressing it so we're not having this same conversation in 10 or 15 years. We need an aggressive down payment assistance program — not just a few thousand, but making up the difference between what someone can afford and what a house costs.

If you can afford $170,000 and houses are $230,000, you make up that difference with a loan you don't make a payment on. Whatever direction we go, there has to be a subsidy program in place to bridge the gap between what's available and what they can afford. You need an aggressive sort of scale.

Chattanooga median family income / Chattanooga area median home prices

* 2014: $54,200 / $147,900

* 2015: $59,000 / $152,000

* 2016: $63,100 / $160,400

* 2017: $59,500 / $175,000

* 2018: $61,700 / $187,000

* 2019: $70,100 / $203,085

* 2020: $72,600 / $230,000

* May 2021: $71,300 / $255,900

Median family income is up 27% / Median home price is up 53%

Sources: U.S. Department of Housing and Urban Development / Greater Chattanooga Area Realtors







Is new affordable housing an answer?

On the production side that's something we're always talking about — how do we create strategies and policies that help builders develop more at an affordable price? We have a wish list of things that would help us be able to build faster and without so much regulation that adds too much cost. I'm talking about CNE has to expand the sidewalk and improve the alley, so we're just giving you money from one department to the other. Those things add costs into my projects that we should not have to pay.


Why should we invest in affordable housing as a community?

Besides the moral imperative? Well, do we want to be a community of the few or a community of the many? There are consequences when people don't have a safe and secure place to live. There are inequities that we have to figure out. If we don't have places for people to live, you have a lot of problems on the back end. Where are your service workers? When you go to the grocery store, when you need a construction worker or a child care worker, who stocks the shelves at WalMart, who's your poultry worker? Maybe you don't think about these folks in the course of your day, but every person in your day makes your life happen. Entry-level school teachers — these folks are having to move way out in Georgia and Tennessee, and you see what sort of problems that causes with more traffic congestion and time away from family. There are real social detriments.


Is the issue more about housing prices or income levels?

If you go into the service industry, is it worth $12 an hour? I can't afford to buy or even rent a home. What is the living wage now in Chattanooga? I can guarantee you it's not $12 an hour. When you think about median income, think about minimum wage. It has not changed in Tennessee since 2006, and it's $7.25 an hour. Somebody used to be able to make minimum wage and they were able to live here 15 years ago. That's no longer true, but there are still jobs that pay $7.25 an hour.

The times when someone who had a regular, wage-earning job could go out and buy their house, I think, are over. I don't think prices are going to roll back significantly, so how do we as a progressive, forward-thinking city, what solutions do we come up with to be a community that's open and accessible to all people and not just one economic class? Do we value the diversity of our community in terms not just of racial but economic? I hope people believe that creates a more vibrant, thriving community.