The city is planning a voluntary program aimed at boosting affordable housing by giving zoning incentives to developers.
Megan Miles, city director of housing policy, said over 500 similar programs are in operation across the country "with proven results," but this would be the first in Tennessee.
"Chattanooga is really the statewide leader on this," she said.
To make it possible, state Senator Todd Gardenhire helped pass a law that lifted a state ban on such incentives.
Ms. Miles said 44 percent of Chattanooga households make less than 80 percent of area median income. Also, 58 percent of renters earn less than 80 percent of area median income. She said income is rising, but housing expenses are going up much faster.
In Chattanooga, an annual household of $56,000 is at 80 percent of area median income.
She said, "We really need new developments to provide units that are affordable to these households."
Many, she said, pay more than 30 percent of their income for housing.
She said many Chattanooga housholds have only one or two persons, but many homes are built for larger families. There are almost 30,000 single-person households.
The incentives will be available only in zones that allow multi-family housing.
The units would stay affordable in perpetuity.
Ms. Miles said the program allows developers to build more units at the same site. She said Chattanooga has a large supply of larger homes, but not enough studio and one-bedroom units.
The program includes lessening parking requirements to as low as .5 per unit. She said on a number of developments it is found that a number of spots stay unoccupied.
There would also be a 30 percent height bonus on the residential building in some cases with requirements such as being within 500 feet of a CARTA bus stop.
Other incentives for developers in some cases include not having to build parking islands and reductions in minimum lot size requirements.
The affordable units would be available to those making 80 percent of the area median income.
Councilwoman Demetrus Coonrod said many in her district are more in the range of "zero to 40-50 percent of area media income."