With Nashville losing ground in the number of affordable housing units we have, there is one new creative model and strategy we could/should be following.
There is an old apartment complex in Nashville’s inner city that is very affordable because rats and cockroaches run free, deep dirt and filth is easy to see, poor wiring, poor plumbing and poor insulation are a hallmark of every unit.
Everyone agrees that it needs to go as it is beyond rehab. Several looked at buying it, and it just sold to an out-of-town visionary developer. CREA has a vision to voluntarily create some new affordable housing within its planned 1,150 unit, mixed income development.
The existing apartment complex will be demolished, and CREA has committed to replace 120 of the current 150 occupied units with new affordable units (below 60% AMI).
In addition, they offered to re-rent their new clean, safe affordable units to the current tenants once the new units are completed. On top of giving the city 120 new affordable units for those on SSI to making $20/hour, the new owners are committed to, on their own, provide 100 new units to serve our workforce or those making over $20/hour. This totals 220 new, clean and safe affordable and workforce housing units which is greater than a one-on-one replacement of the current older units that have run their course.
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A win for Nashville
CREA is creating these 220 new affordable and workforce units without asking the city for permission. They also avoided the state legislature whose habit is to deny creative affordable housing development opportunities in Nashville. They did it because they could and because they embrace Nashville’s need for more affordable housing. Politics helped but it did not drive their decision.
The cost of these new 220 affordable and workforce housing units will be incorporated into the 1,150 mixed income apartment units they plan to build on the site.
According to Greater Nashville Apartment Association (GNAA) there are over 24,000 apartment units currently under construction in the Nashville market. In an unscientific survey, local builders who build affordable housing as a mission estimate that 700 or so of these 24,000 units under development as affordable. For the sake of this article let’s be generous and say 1,000 are affordable. According to GNAA, that means 23,000 apartment units are being built for our wealthier citizens.
How many of these developers building these 23,000 units were asked by our administration to offer up some units for affordable or workforce housing as the developer above voluntarily did? Did the administration ask any developers of these tens of thousands of units for a single affordable unit?
Affordable housing should be more available
It is important to understand that by recent state law it is illegal for Nashville to require developers to include some affordable housing in their developments. But it is not illegal for Metro to ask developers to include, as a good citizen, some affordable units.
Honestly, what will it cost in monthly cash flow to include five affordable units out of 100? If our administration had asked these developers of the 23,000 higher end apartments to voluntarily provide an average of 5 units as affordable units for each 100 high end units, we could have had 1,150 new affordable units coming online next year. These are units that do not exist but could have existed.
We know that developers understand our state law, that the city cannot demand any units be affordable, and therefore, some will tell the administration heck no. But others may even provide 10% of their units as affordable and workforce. In the example above CREA provided 20% for affordable and workforce.
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The non-profits are looking to bringing on close to 1,000 new units next year—rental and homeownership—many in partnership with the Barnes Fund. This means that with what is in the non-profit pipeline and what could have been in the for profit pipeline we could have had 2,150 units of new affordable and workforce housing next year.
Why has the administration not asked the developers of these 23,000 upper end apartment units to find a way to provide a few crumbs of affordable housing in their well-built, high-end developments? There is a great passage that addresses our current lost opportunities; “…you do not have because you do not ask.”
Is our administration asking developers to do what the generous developers above did on their own? To voluntarily develop some affordable and workforce units among all their middle income and high-end units? That would make a difference in the lives of our workforce and nature of our city.
Eddie Latimer is the CEO of Affordable Housing Resources.
This article originally appeared on Nashville Tennessean: How apartment complex can help Nashville's affordable housing crisis