Exciting Changes Ahead for Affordable Homeownership in Chattanooga

Exciting Changes on the Horizon for Homeownership in Chattanooga

Chattanooga has [taken significant strides](#) towards making homeownership more accessible and revitalizing its housing market. On Tuesday, the city council authorized a grant application to the U.S. Department of Housing and Urban Development (HUD) that could potentially unlock $7.5 million in funding to tackle the pressing issues of affordable housing.

A New Zoning Plan

Over the past year, the Chattanooga government has revamped its approach to urban development by introducing a revised zoning policy that aims to adjust what types of buildings can be constructed and where. This summer, the council passed this new zoning law unanimously, paving the way for a more flexible and innovative housing market.

According to Megan Miles, the city’s director of housing policy, the new policy is a response to the growing demand for affordable and smaller homes. The city is particularly keen on facilitating “permanently affordable housing” — a model where homeownership benefits can be passed down through generations, preserving stability for families.

Addressing the Housing Shortage

The reality in Chattanooga is that there’s a significant shortage of affordable housing options. High demand for developable land has driven housing prices up, and many families are struggling to find their first home. Miles explained, “Increased competition for developable land is driving up housing prices, the market is not producing enough starter homes, and we lack the partner capacity to scale affordable housing production to meet demand.”

This grant application intends to help the city acquire parcels of land designated for affordable housing development. The aim is to utilize properties in a way that supports homebuyers and creates a more equitable housing landscape.

Innovative Housing Models

One of the exciting aspects of Chattanooga’s approach is the introduction of a land trust system. This model allows the land surrounding homes to be leased while the home itself is owned by the homeowner. Miles noted that this strategy will make affordable housing more sustainable and provide long-term benefits for families. “It’s a new model of housing in Chattanooga,” she said, indicating its potential to shift the dynamics of homeownership in the area.

Combining Efforts for Better Outcomes

Working alongside Miles is Hanneke van Deursen, a Bloomberg Harvard City Hall fellow, who highlighted the complementary benefits of both land banks and land trusts. Land banks serve to eliminate regulatory barriers, allowing for quicker acquisition and transfer of property, while land trusts ensure that affordable housing continues to serve public needs long-term.

The partnership aims to become a “housing ecosystem” that not only addresses current shortages but also paves the way for future growth and stability.

Looking Ahead

Chattanooga previously applied for this grant in 2023, but Miles expressed optimism that recent changes in their application could enhance their chances of success this time around. Although Chattanooga is not on the priority geography list for HUD’s funding, the compelling case for its housing needs sets the city apart.

With about 30 grants expected to be awarded to various cities across the U.S., the local government is hopeful that its proactive measures will lead to positive outcomes. If the city receives this support, the announcement could come as early as mid-2025, potentially marking a pivotal moment for residents seeking affordable housing options.

As Chattanooga continues to work towards easing housing challenges, the city stands poised for a future where homeownership is within reach for many. Residents and city officials alike are excited about the possibilities ahead, keeping fingers crossed for funding to bring these ambitious plans to life.