Nashville Mayor Megan Barry has announced an incentive program for affordable and workforce housing.
The pilot program developers meeting the guidelines would be given a grant to cover the difference between the price of market-rate housing and the price of the affordable or workforce housing units.
The announcement of the pilot incentive program came on the heels Barry's effort to increase the city's focus on affordable housing.
In June, the Mayor devoted an additional $10 million to the Barnes Housing Trust Fund in an effort to bring more affordable housing to the Music City.
The Metro Council also approved the creation of a 138-unit complex of affordable and workforce housing on a Metro-owned lot at 12th and Wedgewood, which would be done through a private-public partnership with Elmington Capital Group.
They've also worked with the Barnes Commission and local non-profit developers to re-use other city-owned infill lots around Nashville and Davidson County to build affordable housing properties.
Under the incentive proposal, developers wanting to take part would need to provide affordable or workforce housing at a rate that is equal to or less than 30% of household income. For example, utilizing the 2014 figures, the maximum monthly rental for a family of four making 60% of MHI would be $901, or $1,802 at the 120% workforce level.
Once the developer meets those terms, they would then apply for the grant, which would be reviewed by the Mayor's Office of Economic Opportunity and Empowerment (OEOE) and Metro Council.
The grant would cover the difference between the price of market-rate housing and the price of the affordable or workforce housing units. For example, a developer who has market-rate apartments at $1,500 a month and offers comparable workforce-level affordable units for $1,200 would get a grant for the difference of $300 per unit, total not to exceed the cap of 50% of the increase in property tax value.
The program will be launched with a 24 months sunset provision and FY17-18 cap of $2,000,000 in order to collect data and give developers and rental managers time to become acclimated with the new program.
In addition to incentives for new construction of rental properties, the pilot program also has options for owner-occupied units and existing rental. The incentive grants for owner-occupied units outside of the UZO will be capped at $10,000, and they will be capped at $20,000 for properties within the UZO or along a multimodal corridor. Owners of existing rental properties can also apply for grants in the event that increases in the market will displace current residents, subject to rules and limitations.