The Chattanooga Housing Authority is partnering with a Nashville developer to house low-income residents in a Hixson community where the average annual household income tops $59,000 and the average home value reaches more than $145,000.
"To the extent that we can offer affordable housing opportunities in different areas in the county that's a win," said Betsy McCright, CHA's executive director.
The housing authority gave the Elmington Capital Group 27 project-based housing vouchers at its last board meeting in August.
The vouchers fund housing for families seeking two or three bedrooms at the 108-unit River City North Apartments in Hixson.
Hunter Nelson, senior vice president of Elmington Capital Group, could not be reached for comment.
McCright expects paperwork for the project-based vouchers to be complete and available units to be ready for rent within the next four weeks.
The vouchers guarantee developers will be paid for eligible residents who live there for up to 15 years, housing officials said.
The project-based voucher program differs from the tenant-based Housing Choice voucher in that funding for the housing is tied to the housing unit, not the family. So a family who lives in a project-based unit and moves does not have any right to continued housing assistance. However, the family may be eligible for a tenant-based voucher when one becomes available.
River City North offers two- and three-bedroom apartments.
A 961-square-foot two-bedroom, two-bath rents for $703. A 1,078-square-foot unit with three bedrooms and two baths rent for $805 a month.
Developers funded the site with low-income tax credits and made the apartments available only to those who meet maximum income requirements. A single person who qualified to live at the site could earn no more than $25,920 a year. A two-household income could be no more than $29,580.
Instead of paying the full $703 for rent, a person living in a unit with a project-based Housing Choice voucher attached to it only has to pay a third of his income.
According to a voucher payment standard from 2012, the housing authority pays up to $720 for a two-bedroom unit in the 37415 ZIP code. So even a person with no income could live at the site if they lived in a unit with a voucher attached.
The project-based housing vouchers provide another way low-income residents may live in the Hixson community, where most homes are owner occupied and where nearly 40 percent of grade school students attend private school, according to city-data.com. And no public school in the area is listed among low-performing schools in the state.
"People have more choice. They don't have to live in the urban core. Maybe they have schools that they prefer in Hixson, medical facilities and shopping," McCright said.
The housing authority seeks to use project-based vouchers to fill in gaps for populations who lack housing. The vouchers can also help deconcentrate poverty.
Deconcentrating poverty allows residents to move into areas that may have better access to jobs, services and educational opportunities.
Within the past two years the housing agency has issued project-based vouchers to help youth who become adults and age out of foster care, people with brain injuries and those overcoming alcohol and drug addictions.
As funding for public housing across the country and in Chattanooga decreases, housing officials say they may use project-based vouchers as a development tool for more affordable housing.
"It provides a certain level of market-based funding to projects," McCright said. "So to the extent that we want to engage in new development, we would likely be able to use some ourselves."
Contact staff writer Yolanda Putman at yputman@timesfreepress.com or 423-757-6431.