Cooper signs bill to incentivize developers to build more affordable housing in Nashville
NASHVILLE, Tenn. (WSMV) - Mayor John Cooper signed a new law on Tuesday aimed at incentivizing developers who are building apartments in Nashville to include affordable housing units as part of each development.
The program would allow qualifying developments to access a tax abatement in exchange for long term affordability for 20-40% of the units.
The program provides a tiered structure for the abatement; the more affordable the rent, the higher the abatement.
The tool is focused on housing security for Nashvillians making 50-70% of the area median income. This payment in lieu of taxes, also known as the Mixed Income PILOT, was approved by Metro Council by a 24-4 vote on May 5.
“As Nashville grows, it’s critical Nashvillians can afford to continue living and thriving here, which starts with more affordable housing,” Cooper said in a statement. “This initiative partners with builders to provide the right incentive so that new housing complexes will include more units below market rate, helping families across the city.
“I’m grateful to the Metro Council for voting overwhelmingly in favor of the program and look forward to seeing its impact as developers begin adopting it.”
The Mixed Income PILOT program is intended to apply to construction projects that would not typically offer units at rates lower than the market price. Applicants that take advantage of the program will be offered at a 15-year term with the option to apply for a second term of the same length. The tax abatement would decrease by 20% between years 11 and 15. The program application will be posted after June 1 on the Health and Educational Facilities Board webpage.
This new tool in Nashville’s affordable housing toolkit is one of the first innovations of Cooper’s new Division of Housing within the Planning Department, according to a news release.
“I’m already hearing from developers who are eagle to use this tool,” Council Member At-Large Burkley Allen, the lead sponsor of the legislation passed by Council, said in a news release. “It’s exciting that we have created a mechanism so that more builders can participate in creating housing that is affordable to Nashvillians who make the city run.”
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