Knoxville needs at least 6,000 more homes. 6 ways the city is trying to reach that goal

Knoxville needs 6,000 to 8,000 more housing units by 2029 to meet demand and undo years of underbuilding. The city hopes to solve this crisis with six strategies aimed at funding and preserving housing.

The city took a step in early February when it made it easier to build multifamily residences like duplexes and triplexes on property meant for single-family homes.

Knoxville Director of Housing and Neighborhood Development Kevin DuBose said the city is focusing on helping the extremely low-income people who rely on subsidized housing and median income families struggling to find housing at a price that won't burden them.

City officials presented solutions around subsidized housing, revitalizing blighted properties and tax incentives to the Knoxville City Council during a Feb. 15 workshop.

Here's a look at those solutions that could help the city reach its goal of adding 1,200 to 1,600 new housing units per year.

More affordable housing funds

The city wants to raise more money for its Affordable Housing Fund, which is used to incentivize developers building affordable housing.

The city is asking private organizations and nonprofits to contribute to the fund and wants to add an additional $1 million to $2 million to the fund.

The city estimates that for every $1 it invests in affordable housing, it gets a return of $15.

In 2021, the city pledged to commit at least $5 million in the budget annually to affordable housing developments for 10 years.

So far, it has spent almost $27 million, well exceeding the goal. Almost 1,600 residences have been built using those funds.

As of 2022, the latest available data, the city was short nearly 8,300 units that would be affordable for people making less than $20,000 a year, forcing many to pay more than they can afford for housing.

Utilizing tax incentives to spur development

While the affordable housing fund is for housing for people making less than 80% of the median income, tax incentives can encourage the construction of multifamily housing for people making 80% to 120% of the area median income, which is $91,700 for a Knox County family of four.

The city will prioritize using Payments in Lieu of Taxes and Tax Increment Financing districts to give developers a financial incentive to build housing, especially affordable units.

The city also will keep establishing redevelopment areas that provide greater incentive to catalyze growth, like on Magnolia Avenue, which is undergoing a streetscape project, and the Old City baseball stadium.

The city wants to prioritize mixed-use housing developments geared toward family, workforce or senior demographics, said Rebekah Jane Justice, Knoxville's chief of urban design and development. Projects also would be prioritized in areas that need redevelopment and are near public transportation.

Creating a comprehensive plan to address homelessness

Homelessness has been an ongoing issue for Knoxville, and lack of affordable housing contributes.

In January 2023, the most recent total count of Knoxville's homeless population, there were 925 homeless people in Knoxville, and 223 of them were unsheltered, but those figures are more than likely undercounts, according to data presented by Office of Housing Stability Director Erin Read at the workshop.

By the third quarter of 2023, 250 more people fell into homelessness each month. Of those surveyed in the third quarter of 2023, 62% reported they were becoming homeless due to a lack of attainable housing.

The new Knoxville-Knox County Office of Housing Stability is devising a plan to make the city's homelessness services more cohesive and streamlined, add more permanent supportive housing and support homeless youth.

Read said the department will begin gathering public input for the plan "in the next few weeks."

Read told Knox News she wants a five-year strategic plan to address homelessness by June.

Preserve affordable apartments through a tax freeze

Naturally Occurring Affordable Housing (NOAH) refers to apartments that are more affordable because they were built 30 years ago or more. NOAH accounts for 71% of the city's housing supply.

Because these apartments are already affordable and unsubsidized, the city wants to make sure they don't get torn down or redeveloped into more expensive complexes.

In November 2023, the city council approved a resolution to create an incentive program to provide tax freezes for NOAH developers.

The tax freeze would incentivize owners to make safety and modernization improvements to these older apartment buildings.

In return, they would be contractually obligated to use the saved money to keep rent affordable based on the U.S. Department of Housing and Urban Development housing rates and tenant income levels.

DuBose said the city is working on the final policy to begin offering the tax freeze.

Being smart with land and streamlining development

Knoxville doesn't have a ton of land to build new homes, so the city wants to be smart with how it uses that land.

That means updating its land use codes and policies to make it easier to build housing, and emphasizing development in areas that are near public transit lines. The city is working with Knoxville Area Transit to come up with transit-accessible housing opportunities. More details about this plan will be unveiled in March, said Knoxville Chief Policy Officer Cheryl Ball.

Ball said the city is hiring additional staff, updating technology and using third-party reviews to streamline getting development projects approved.

Redevelop abandoned properties

The city has allocated $2.3 million from American Rescue Plan funding to purchase blighted and abandoned properties and resell them to developers who want to build affordable housing.

Those developments would be subsidized through public-private partnerships with organizations like the Knoxville Community Development Corporation, or by the city lowering the price so the developer can close any funding gaps.

DuBose said the city has about a year to identify properties it could acquire.

Related, the homemaker's program allows the city to sell blighted properties to developers and nonprofits to redevelop or build affordable housing. The city sets a target sale price for the property, but it could accept lower offers if that's what's needed to ensure the home is affordable.

The city wants to expand that program to non-residential buildings, which would allow for larger housing developments with more units to be built.

Silas Sloan is the growth and development reporter. Email silas.sloan@knoxnews.com. Twitter @silasloan. Instagram @knox.growth.

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This article originally appeared on Knoxville News Sentinel: How Knoxville wants to solve its affordable housing shortage