An over 4,000 affordable unit housing deficit is not a problem… it is a Crisis. Chattanooga has two of the top most gentrified zip-codes in the United States and the 7th quickest rising rent in the nation. There is not one answer to fix the city's problems; there will need to be many solutions. But there will be no change without public action and progressive policy.
Chattanooga Organized for Action (COA) has openly called for a re-evaluation of the city of Chattanooga’s Payment in Lieu of Taxes (PILOT) Program for Affordable Housing since early in 2015. This program, which is currently administered by River City Company and the city’s Health, Education and Housing Facilities (HEB) Board, has demonstrated itself to be ineffective in addressing the needs of a majority of Chattanoogans. These Chattanoogans, particularly those in working class communities and communities of color, are unable to meet the income requirements placed upon the residents of these units. The current program also does nothing to support the creation of affordable units over the long term. For a more thorough analysis of the current PILOT program, Click Here. In order to ensure that all Chattanoogans have housing that is affordable as well as support for sustainably diverse communities, COA is advocating for an expanded PILOT program modeled after more successfully inclusive programs. There are many examples of inclusive and successful housing PILOT programs across the United States. COA’s recent dialogue with John Baker of the Memphis Health, Education, and Housing Facilities (HEHF) Board demonstrates the significant contrast between Chattanooga and Memphis’ PILOT program. It is important to note that in assessing our Affordable Housing PILOT program in comparison to Memphis’s program, our city and Memphis have nearly identical income and wage issues. According to HUD, the Memphis Area Median Income (AMI) is $58,000 for a single person. The Hamilton County AMI is $59,000 a year. Memphis has a poverty rate of 27.2% in comparison to Chattanooga’s poverty rate of 27%. We stand side by side as two cities suffering under the crises of economy and housing. MEMPHIS PROGRAM DETAILS 1. The Memphis program reaches a far deeper level of affordability than the current Chattanooga program. The Memphis program specifies that 20% of the project's units must be occupied by households whose income are below 50% of median income for the county, or 40% or more of the units must be occupied by households whose income are below 60% of median. The standards for the PILOT program are meant to mirror the standards of the State Low-Income Housing Tax Credit (LIHTC) system, so that affordable housing developers do not have to operate on two divergent sets of standards. Currently, the Chattanooga program specifies 20% of the units at 80% AMI. In Chattanooga, this results in studio apartments designed to cost around $800 a month in exchange for the tax breaks. 2. The scope of the Memphis program is far larger than Chattanooga’s current program. HEHF currently has around 75 properties enrolled, but the Board has approved over 100 projects since the start of the program in 2002. There are currently 15,000-16,000 units involved in the program. The area approved for PILOT projects, what is referred to as the “capture area,” is the entire city of Memphis. The downtown business core development is overseen by the Downtown Memphis Commission, which also issues separate PILOTs for multi-use apartments. The Chattanooga PILOT program currently affects the Downtown area. A wider scope would allow affordable housing to be developed in other areas of the urban overlay with incentives better fitting the development of those areas. 3. The Memphis program is far more thoroughly monitored for compliance to the tax incentives. HEHF receives quarterly reports from each property. For every report, they also ask about any changes of management for the property. Managers use the quarterly reports to fill in blanks for every property. The HEHF board crunches the numbers to give an electronic report card for compliance. Twice a year HEHF “puts boots on the ground” to inspect every property for compliance with the program. An inspector walks around with a building manager, takes photographs, and judges the state of the property. Currently in Chattanooga, oversight over the PILOT tax break program is handled by a non-government entity with no public reports or regular inspection of properties in the program. 4. The Memphis program has a formal process for housing developers who are non-compliant with the PILOT agreement. When properties are out of compliance, they are put on notice that they will be kicked out of the program; usually a 60-day notice. Past issues with compliance in the Chattanooga PILOT program have resulted into audits and even legal action in order to ensure compliance to the agreement. Share This
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AuthorChattanooga Organized For Action The mission of Chattanooga Organized for Action is to assist individuals and organizations in becoming the essential agents of real systemic change to achieve social, economic and environmental justice.
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