Chattanooga, TN, September 18, 2025
News Summary
Chattanooga has approved its first affordable housing development under the PILOT Program, aiming to combat rising homelessness. The project will create 278 rental units at 702 Manufacturers Road, with over 40 units dedicated to affordable housing for those earning between 60% and 80% of the area median income. Expected completion is set for June 2027, alongside significant tax benefits projected to aid local schools and community resources.
Chattanooga Approves First Affordable Housing Project Under New PILOT Program Amid Rising Homelessness
Chattanooga has formally approved its first development project under the affordable housing PILOT (Payment In Lieu of Taxes) Program. This program is designed to incentivize contractors to build affordable housing units with lower rental rates, addressing the pressing issue of homelessness in the area.
The initiative comes in response to rising homelessness rates in Hamilton County, which have increased this year to 762 adults reported homeless, a rise from 635 last year. This growing concern is largely attributed to the ongoing lack of affordable housing options, as noted by experts in the community.
The new project is set to be developed at 702 Manufacturers Road, where Atlantic Companies plans to create 278 rental units. More than 40 of these units will be dedicated specifically as affordable housing for residents earning between 60% and 80% of the area median income. The current area median income for a two-person household in Chattanooga is $76,400.
Although some city council members have raised concerns about the long-term affordability of the housing units, project planners have assured stakeholders that measures are in place to keep costs manageable. The PILOT program mandates that the affordable units must maintain their rates for at least 15 years.
The project will also qualify for a 69% tax abatement on the improved property value. This abatement is projected to significantly increase tax contributions from the site, from $9,055 annually to $341,931. Furthermore, the development is expected to generate $142,161 in tax revenue for local schools, enhancing further community support and resources.
Support for the project is evident among city officials, including Council Chair Jenny Hill, who acknowledge the urgent need for affordable housing in the area. Mayor Tim Kelly has also expressed that the affordable housing crisis remains a major concern for the city and is in favor of initiatives aimed at creating more affordable living options.
Construction of the new affordable housing complex is anticipated to be completed by June 2027, contingent upon the approval of necessary permits. This development seeks to play a crucial role in addressing the affordable housing shortage that has significantly affected many households in Chattanooga.
Summary of Key Features of Chattanooga’s Affordable Housing Project
| Feature | Details |
|---|---|
| Approved Development | 278 rental units at 702 Manufacturers Road |
| Affordability | Over 40 units for residents earning 60%-80% of area median income |
| Current Area Median Income | $76,400 for a two-person household |
| Tax Abatement | 69% on improved property value |
| Expected Tax Contributions | $341,931 annually (up from $9,055) |
| Tax Revenue for Schools | $142,161 |
| Completion Date | June 2027 |
Frequently Asked Questions
What is the Chattanooga affordable housing PILOT Program?
The Chattanooga affordable housing PILOT (Payment In Lieu of Taxes) Program incentivizes contractors to build affordable housing units with lower rental rates.
How many adults are reported homeless in Hamilton County?
This year, there are 762 adults reported homeless in Hamilton County, compared to 635 last year.
Where will the new affordable housing project be located?
The new project is located at 702 Manufacturers Road.
How many units will be dedicated as affordable housing?
More than 40 of the 278 rental units will be dedicated as affordable housing for residents earning 60% and 80% of the area median income.
When is the expected completion date of the housing project?
The construction of the new affordable housing complex is expected to be completed by June 2027.
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Additional Resources
- Local 3 News
- News Channel 9
- Times Free Press
- Times Free Press
- News Channel 9
- Wikipedia: Housing in the United States
- Google Search: affordable housing
- Google Scholar: affordable housing policy
- Encyclopedia Britannica: housing
- Google News: Chattanooga affordable housing
Author: STAFF HERE CHATTANOOGA WRITER
The CHATTANOOGA STAFF WRITER represents the experienced team at HEREChattanooga.com, your go-to source for actionable local news and information in Chattanooga, Hamilton County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Riverbend Festival, Chattanooga Oktoberfest, and Moon River Festival. Our coverage extends to key organizations like the Chattanooga Area Chamber of Commerce and United Way of Greater Chattanooga, plus leading businesses in manufacturing, insurance, and utilities that power the local economy such as Volkswagen Chattanooga, BlueCross BlueShield of Tennessee, and EPB. As part of the broader HERE network, including HEREBristol.com, HEREKnoxville.com, HEREMemphis.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
