How much will Invest Chattanooga loan? Invest Chattanooga’s low-interest loans will cover up to 25% of the development cost of a housing development.
How many units will be required to be affordable and how do you define ‘affordable?’
In exchange for becoming a partner in the development, Invest Chattanooga will require that a housing development dedicate 20% of its units as affordable for Chattanoogans earning less than 50% of area median income (AMI); which would currently be someone making $35,000 or less per year. Invest Chattanooga will negotiate the affordability level on 10% of the units according to market conditions, requiring that they be affordable to households making between 50 and 100% AMI, which would currently be someone making $70,000 or less per year. That means 30% of the total units will be dedicated as affordable, while the remaining 70% will rent for market rate.
How long will the affordable units be dedicated as affordable?
Permanently.
How will Invest Chattanooga be repaid for its loans?
The debt incurred by multiunit housing developers is traditionally refinanced once the project is completed and the risk of delays, cost overruns or construction issues is gone. Like the other investors who funded the construction of the project, Invest Chattanooga will have its loan repaid when the building is refinanced.
Will Invest Chattanooga do anything else besides loan?
Taking an active role in its investments, Invest Chattanooga will work with development partners to ensure they’re taking advantage of other affordable housing incentives, like the newly-reformed PILOT (payment in lieu of taxes) policy and forthcoming voluntary no-cost incentives. They will also identify opportunities to leverage publicly-owned land and engage the local and national philanthropic communities for impact investment capital. Invest Chattanooga will remain a partner in its properties long-term, to ensure permanent affordability.
How will Invest Chattanooga be structured and will there be accountability measures?
To enable permanent affordability, Invest Chattanooga is structured as a 501(c)(3) nonprofit subsidiary of the Chattanooga Housing Authority (CHA). It will be financially and operationally independent from CHA with its own board to allow Invest Chattanooga to operate flexibly and meet the opportunities in the market. But as a public enterprise, its appointed board will hold public meetings and Invest Chattanooga will be audited and issue reports to the Chattanooga City Council annually.