HIPP will allow developers and apartment owners to seek grants from Metro to offer mixed-income workforce housing in new and existing developments
Metro Press release - At a networking reception hosted at Emma Bistro on Tuesday night, Mayor Megan Barry announced the start of the Housing Incentive Pilot Program. Created by the Mayor’s Office and approved by the Metro Council, HIPP was designed with feedback from the developer and housing advocate communities to help address the need for workforce housing in Nashville.
“In order to meet the unique housing needs of people of all economic strata, we need a diverse set of tools and policies that will result in more individuals and families finding the housing options they need to succeed,” said Mayor Megan Barry. “HIPP will help us to incentivize mixed-income housing developments that will preserve the option for teachers, construction workers, service employees, and others to live and work in Nashville.”
HIPP was developed to work in concert with the Metro Council’s Inclusionary Housing Policy, BL2016-133, while also operating as a stand-alone incentive program for apartment owners and developers in Nashville. The Freeman Webb Company, which has experience administering programs for MDHA and other affordable housing developments throughout the county, was recently awarded the contract to serve as the administrative agency for the program.
Under the program, developers wishing to take advantage of the incentive program would need to provide affordable or workforce housing at a rate that is equal to or less than 30% of an individual or family’s household income. For example, utilizing the 2015 figures, the maximum monthly rental for a family of four making 60% of MHI, or $35,882 would be $897. For a family of four at the workforce level making $71,764, or 120% of MHI, the maximum rent would be $1,794.
Developers who meet these terms can apply for a grant to cover the difference between the price of market-rate housing and the price of the affordable or workforce housing units. For example, a developer who has market-rate apartments at $1,500 a month and offers comparable below-market housing units for $1,200 would get a grant for the difference of $300 per unit. For new construction the total grant will not exceed the cap of 50% of the increase in property tax value. The program also allows for existing residential units to be converted with the total grant not exceeding the cap of 20% of the property tax value.
“Having diverse housing options is critical to Nashville’s continued success,” said Adriane Harris, Senior Advisor –Affordable Housing. “We’re excited to announce an additional tool for developers to assist in increasing the housing supply needed to retain our teachers, hospitality workers, recent college graduates, and other residents who simply need a place to call home.”
The Metro Council approved a supplemental appropriation of $500,000 that will allow the program to operate for the remainder of FY16-17. Mayor Barry has proposed $2 million in the FY17-18 budget to continue the pilot program into the next year. For housing managers and developers seeking more information or wishing to apply, please visit http://hipp.nashville.gov
My Comment: While Nashville's Inclusionary Housing Policy is likely to be invalidated by legislation working its way through the State legislature, the Housing Incentive Pilot Program would not be affected. The two policies were designed to work together. The Inclusionary Housing Policy was the stick and the Housing Incentive Pilot Program was the carrot. For more on this issue see, State legislature to stop Nashville's rental price-fixing policy from taking effect.