The Hamilton County Commission on Wednesday voted 8-1 to approve a PILOT (payment in lieu of taxes) tax break on a Chattanooga Neighborhood Enterprises project in Highland Park.
CNE plans to invest $5.4 million in the 47-unit Mai Bell II at 1715 Union Ave. It will include six buildings.
Under the 10-year PILOT, the school taxes would continue to be paid as well as the water quality fee.
The PILOT would freeze the property taxes on the new venture for 10 years at the pre-development level.
Commissioner Sabrena Smedley said she usually does not support some PILOT programs, but she expressed support for a resolution which would delegate some authority to the Health, Educational, and Housing Facility Board to let the mayor execute an agreement for a PILOT.
“I will be able to support this one today, I looked back at the study we did in 2016 which called for a needed 6,750 units of affordable housing over a 10-year span,” Commissioner Smedley said. “If you look at the seven resolutions we’ve had before us since 2016, those resolutions only yielded 1,042 units, so roughly at this point we should’ve had 3,400 units. So we are way behind where we are in affordability.”
She said that Chattanooga “really has a problem” with affordability, and said average rent for a one-bedrooms and two-bedrooms units would be around $1,000, and that this PILOT would be an example of affordable housing. Commissioner Smedley said she is glad affordable housing is being provided, but also said she hoped home ownership, rather than paying rent, can begin to be promoted.
Commissioner David Sharpe said he appreciated Commissioner Smedley’s assessment, and said he, too, has noted the county’s need for affordable housing. He said residential properties are taxed at 25 percent of their assessed value, while commercial properties are taxed at 40 percent of their value. He said this this affects how much rent people have to pay.
“There are some structural issues in our tax codes and laws that not only cause higher rent prices for people who aren’t purchasing a home,” Commissioner Sharpe said, “and that’s just one more obstacle preventing people from saving for a sizable down payment.”
Commissioner Tim Boyd, who cast the only no vote, said he would rather support PILOTs that create better jobs for the community.
Commissioner Warren Mackey said he appreciated how the various commissioners are relying on each other to make decisions and called the meeting “pleasant.” He did ask that even if new jobs are not created, he wondered aloud if that if that would still benefit people who need affordable housing.
County Mayor Coppinger asked if the lack of affordable housing has to do with gentrification. He pointed to downtown as an example of this.
“You realize that some of what used to be considered affordable housing doesn’t exist anymore, because of the success in bringing business and jobs, which drives up prices,” the mayor said.
Ms. Guilfoil said there are several factors involved in rising prices and rent costs, including the rising cost of construction. She also said another challenge was that she did not want disinvested neighborhoods to be affordable housing. She said she has been speaking with mayoral candidates about working to invest in neighborhoods, while also making sure those neighborhoods are not being gentrified and driving out the residents.
Commissioner Mackey advocated for increasing pay for sheriff’s deputies and teachers so they can “live decently” and afford living comfortably. He said as automation continues to become more prevalent, he said he does not want to see those groups to be left behind.
Commissioner Katherlyn Geter said that the Commission should not forget there are many underlying factors people experience, and she said the Commission needs to address those experiences.
“It’s not just about jobs. We can raise minimum wage and salaries, but there’s other issues people have with even entertaining owning a home,” Commissioner Geter said. “For some, no one in their family has ever owned a home, so its foreign to them. That has to be part of the conversation. We need to talk about the social aspects.”
The commissioners spoke about forming a new committee to address these issues, and Commissioner Sharpe said that he would like Commissioner Smedley to be a part of the committee.