Chattanooga Aims to Boost Affordable Housing Opportunities with New Initiatives and Grant Application

Exciting Development for Homeownership in Chattanooga

Chattanooga is making strides toward improving homeownership opportunities and streamlining land management, with plans expected to take flight by mid-2025. The city’s government has undergone significant changes in the past year, particularly in how city planners and private builders approach development.

Revised Zoning Policy and Housing Challenges

One of the main changes comes from a recently passed zoning policy that reclassifies which types of buildings can be constructed in certain areas. This change has even relaxed some size requirements for various home-building projects. As a result, Chattanooga now finds itself in a powerful position to tackle the persistent issue of affordable housing shortages.

City staff members are currently preparing another attempt at securing a substantial grant of up to $7.5 million from the U.S. Department of Housing and Urban Development (HUD). This initiative aims to assist communities actively working to diminish barriers to affordable housing, according to HUD’s official website.

What’s the Plan?

If Chattanooga’s application is successful, residents could hear good news by the middle of 2025. Megan Miles, Chattanooga’s director of housing policy, explains that the city is looking to fulfill two vital goals through this grant: addressing the dire need for affordable housing and creating a more sustainable housing market.

“There’s a shortage of affordable housing,” Miles said in a recent interview. “Smaller homes, in particular, are in great demand.” She added that the growing competition for available land is driving prices up, putting pressure on those seeking affordable options.

Addressing Supply and Stability

According to Miles, the city’s application points out that the local market is struggling to produce enough starter homes and lacks the necessary partnerships to scale up affordable housing production to meet the ever-rising demand. The city also grapples with the challenge of permanently affordable housing.

“Keeping the benefits of homeownership in families could provide families with stability across generations,” she explains, adding that the city aims to strategically acquire land parcels suitable for affordable housing development through the Chattanooga Land Bank Authority. The grant funds would aid in covering costs around property acquisition and sales.

The Land Trust: A New Model for Chattanooga

In an innovative twist, Chattanooga is also considering a land trust system. This model allows for the land to be owned separately from the home, making it easier for families to buy homes at affordable prices while securing the land through a lease. Miles believes that this model could significantly contribute to creating more permanently affordable housing.

“It’s a new model of housing in Chattanooga,” she said. “Its roots stretch back to Georgia and even the civil rights movement.”

Collaborative Efforts for a Thriving Housing Ecosystem

Hanneke van Deursen, a Bloomberg Harvard City Hall fellow, is collaborating on the grant application. She emphasizes that having a land bank authority alongside a land trust system can reinforce Chattanooga’s entire housing ecosystem. “Land banks are great at clearing regulatory barriers,” she explains, which can expedite the processes involved in acquiring and transferring properties. “Land trusts focus on long-term stewardship, ensuring that affordable housing investments are preserved for public benefit,” van Deursen adds.

Optimism for Success

Interestingly, this isn’t the first time Chattanooga has applied for this federal grant. The city submitted an application during the inaugural round of funding in 2023 but hopes that the changes to this second application will yield a more favorable outcome. Although the city is not positioned as a priority location for grant awards, Miles is optimistic. She believes the compelling case made in the previous application showcased Chattanooga’s urgent needs and proactive steps to address them.

“We expect about 30 grants to be awarded nationwide,” she noted. With all the hard work that has been put in over the past year, both Miles and van Deursen feel hopeful about their chances.

This effort reflects Chattanooga’s commitment to creating a vibrant, affordable housing market—one that benefits not just current residents but sets the foundation for future generations as well.