News Summary
The Chattanooga Land Bank Authority has kicked off its first affordable housing project by donating city-owned properties to a developer. This initiative aims to tackle the city’s housing crisis, particularly for first-time homebuyers. Wind River Built will construct two-bedroom homes priced below $200,000, with a covenant to ensure long-term affordability. This step is part of Mayor Tim Kelly’s broader strategy to address the housing shortage in Chattanooga, which has seen significant challenges with rising home prices.
Chattanooga Launches First Affordable Housing Initiative Through Land Bank Properties
The Chattanooga Land Bank Authority has initiated its first affordable housing project by donating city-owned properties to a developer committed to building cost-effective homes. This significant move aims to confront the pressing affordable housing crisis faced by many residents in the city, particularly first-time homebuyers.
In 2024, city officials sought proposals for a collection of parcels from the land bank, with the intention to hand them over to qualified developers at the beginning of 2025. Wind River Built, a modular home builder based in Cleveland, Tennessee, has been selected to develop the inaugural project on a property located on Oakland Avenue in the Alton Park area. This project will consist of constructing two-bedroom homes, ranging from 700 to 900 square feet, which are planned to be sold to first-time buyers for less than $200,000. This price point aligns with the affordability guidelines set by the land bank.
Wind River Built emerged as the sole developer out of four applicants capable of meeting the stringent requirements laid out by the land bank. Although the Chattanooga Land Bank Authority initially announced plans in September 2024 to donate 11 properties to developers, title issues limited the available options to just seven properties. Furthermore, an eighth parcel situated on McCallie Avenue is currently delayed due to a separate county tax concern.
The properties under consideration are mainly situated in Alton Park and East Chattanooga. These lands have historically faced challenges, including foreclosure and tax defaults, which have contributed to the area’s economic difficulties. As construction costs have risen since September, the requirement for selling homes under $200,000 may require reassessment. However, legal agreements stipulate that developers must ensure homes are sold or rented at rates affordable for individuals earning less than the area’s median income, approximately $70,000 for a two-person household.
To maintain long-term affordability, any homes sold will be subject to a covenant that preserves affordability for a period of 15 years, even as property values increase. Additionally, properties can revert back to the land bank if developers fail to adhere to these commitments, ensuring that the intention of providing affordable housing is met.
The Chattanooga Land Bank Authority is partnering with Pathway Lending to educate lenders about the mechanics of these public-private deals, optimizing the success of affordable housing projects. Since its inception, the land bank has dealt with various obstacles including legal and zoning challenges, many of which have been exacerbated by changes in administrations over the years.
Mayor Tim Kelly is prioritizing the land bank within his broader strategy to address the growing affordable housing crisis in Chattanooga. The strategic use of the land bank properties aims to encourage infill development in densely populated areas. Wind River Built has adopted a unique construction approach, building homes off-site before installing them on location to streamline the process.
The challenges surrounding affordable housing have intensified, especially considering that the average new home price in Hamilton County exceeds $400,000, making it increasingly difficult for first-time buyers to enter the market. In response, city officials have identified an additional 50 sites intended for future affordable housing development to help ease the shortage of accessible housing in the community.
As Chattanooga takes these significant steps forward, the hope is that these new initiatives will not only address current housing needs but also set a precedent for ongoing efforts to create affordable living solutions within the city.
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Additional Resources
- Times Free Press: Chattanooga Land Bank Moving on Affordable Housing
- Wikipedia: Affordable housing
- Nooga Today: Chattanooga Donates Land for Affordable Housing
- Google Search: Chattanooga affordable housing
- Chattanooga Pulse: Vacant City-Owned Properties to be Donated for Affordable Housing
- Google Scholar: Affordable housing Tennessee
- Planetizen: Chattanooga Offers Free Land for Affordable Housing
- Encyclopedia Britannica: Land bank
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.
