The board of the Chattanooga Housing Authority on Friday at a special called meeting approved a long-term ground lease of 21 acres at Cromwell Hills for a private affordable housing project.
Mike Sabin, development manager, said Pennrose Properties was the only firm to submit a proposal.
He said the tentative price that is still being negotiated is $400,000.
Mr. Sabin said there was an earlier appraisal of the property on Cromwell Road of $157,000, though he said that may be on the low side.
Elizabeth McCright, CHA executive director, said the move supports the agency's mission of providing affordable housing, though it will not be involved in the new housing.
Mr. Sabin said it is believed that all the infrastructure is in place at the site.
Rents are expected to be in the $500-$600 range with a number of Section 8 vouchers involved.
The firm plans to apply for tax credits.