Tax break program changes aim to increase affordable housing opt - WRCBtv.com | Chattanooga News, Weather & Sports

Tax break program changes aim to increase affordable housing options in Chattanooga

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CHATTANOOGA, TN (WRCB) -

More affordable housing options could be coming to Chattanooga. Tax breaks are coming to entice developers to start building.

City council voted Tuesday to require at least half the rental units be at a certain price to qualify.

To qualify for an affordable housing unit, you can't make more than $34,300. In exchange for not paying property taxes, landlords agree to not charge more than $858 in rent.

Some city council members see this as a good move, while others question if it's really affordable.

Construction noise fills the 700 block of Market Street in Downtown Chattanooga. City officials said the property was the last one under the old property tax freeze agreement.

"What we passed last night will ensure that there will be quality, low income housing for people who need it in Chattanooga," Councilman Chris Anderson of District 7 said.

Councilman Chris Anderson who covers the downtown area is pleased with Tuesday's vote.

Several big changes were made to the city's tax incentive program.

Instead of it being limited to downtown, it will now be city wide. Developers will also need to increase the number of affordable housing units to at least 50%. That's more than double from before.

"The price of rental units is accelerating a lot quicker than most people's incomes and we need to make some provisions to make sure that more people can live in apartments that can do so right now," Donna Williams of the city of Chattanooga said.

Some city officials see this as a way to help those struggling to find reasonable housing with low incomes. Others aren't so sure it will make a difference.

"In some cases, that does not count your water, your sewer, WiFi, or electricity," Councilman Larry Grohn of District 4 said.

Councilman Larry Grohn who represents the East Brainerd area and is also running for mayor voted against the proposal.

"So, unless those are rolled into the $860 roughly, then you're talking about something to me that seems way out of affordable," Grohn said.

"I know of a lot of projects coming along that they will cap out at 50% of the income or 60% of the income, so you're going to see a lot of rents in the $600, $700 range in areas where rents are normally $1200 to $2000," Anderson said.

The tax breaks don't last forever, but will be at least 10 years.

On Wednesday, city officials said they've already met with two developers about the program.

City council members will need to approve each developer's proposal.

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