Affordable Housing

Though Mayor Briley disagrees, Nashville is in the midst of an affordable housing crisis. Between 2011 and 2017, rents in Nashville rose by 64 percent. During the same period, wages rose by only 14 percent. Not surprisingly, half of all renters and a quarter of all homeowners now spend more than 30 percent of their income on housing. Rising rents and gentrification have pushed many residents out of their homes. Before we can talk about neighborhoods, we must deal with housing.

As everyone in Nashville knows, the private market has responded to the demand for housing. As Nashville grows, developers are building more apartments and more houses. That’s a good thing. Increasing the supply of housing is an important first step to addressing costs. But it’s not enough. Most new units are priced for affluent renters and buyers. Middle class residents need options too. So do our workforce and lower income residents. By 2025, Nashville is projected to have a shortfall of 31,000 housing units for low-income residents. The market alone will not address this problem.

Affordable housing isn’t simply about putting roofs over people’s heads; it’s about creating community. Having access to secure housing allows families and neighborhoods to thrive. Children do better in school; mental and physical well-being improves; seniors remain more socially connected and live longer; residents’ mental and physical wellness improves, particularly when people live close to where they work.

I have spent my career in finance, real estate development, and project management. I know how to manage large, complex projects. No one in the mayor’s race understands the real estate development and financing market better than I do. After four years on the city council, I’ve seen what Metro is doing to address the housing problem. The answer is not much. In the past couple of months, this administration has talked a lot about its affordable housing plan. Look closely, though, and you will see a plan that is all sound bite and no substance. In short, this administration is faking it.

 

A press release pretending to be a plan.

Briley wants to give the impression that he is hard at work addressing the affordable housing crisis through his Under One Roof affordable housing proposal. However, his one-page proposal is completely inadequate. Here is how Mayor Briley’s $750 million headline number breaks out:

  • “Made-up” money. $250 million, one-third of the total, comes from imaginary “private-sector philanthropy.” This is imaginary budgeting. Local foundations and the private sector have made no such commitments. Wishful thinking won’t build housing units.
  • Bailing out MDHA. The Metro Development and Housing Agency (MDHA) is the city agency responsible for public housing. It is important to remember that we need both effective public housing as well as privately developed affordable housing for the community. MDHA is one of Metro’s least transparent agencies, and not always in alignment with our needs today. The MDHA has long insisted that it has sufficient funding to carry out its Envision projects, without additional funding from the city. Mayor Briley’s plan would allocate an additional $350 million to the agency over ten years. In exchange, the public will receive — accordingly to the mayor’s one-page press release — “at least 1,000 deeply affordable units…plus another 1,600 affordable and workforce housing units.” This is a disturbingly low number of units for a $350 million investment.
  • Claiming credit for future funding. $150 million in Mayor Briley’s plan is an investment in the Barnes Fund, the city’s affordable housing fund. This is an exaggeration. Metro already allocates $10 million per year to the Barnes Fund. The mayor’s plan envisions increasing the city’s contribution by $5 million a year. Mayor Briley’s current budget proposal amazingly does not include any new funds for the Barnes Fund, certainly not $5 million a year. The Barnes Fund has done great work, but the funding is too unpredictable from year to year. The Barnes Fund needs a dependable source of funding and I will work with the community to create one.

In short, the mayor’s supposedly three-quarter billion dollar housing investment is made up of unsecured promises for private contributions and a reframing of pre-existing funding and development plans.

 

The real solutions we need.

We can do better, and as mayor, I will do better. Here are some of my ideas.

  • Make affordable housing central to everything we do. Metro needs to make affordable housing central to every incentive that it gives. We’ve created a lot of growth but the growth has increased rents and priced people out of their neighborhoods. As the city continues to grow, housing should be a part of every development incentive deal, but it hasn’t been. I have already cosponsored legislation that would match affordable housing dollars with incentive dollars. I will also explore ways to use tax increment financing for affordable housing with the end goal of putting workers closer to jobs. Per state law, TIF loan proceeds may not pay for unit construction but can fund land acquisition and site preparation. Metro’s TIF Study & Formulating Committee report from May 2019 stated, “there is no written strategy or policy in Nashville about when or how to use TIF on affordable housing projects.” As mayor, I will define a strategy.
  • Improve the functioning of the MDHA. MDHA has lost track of its mission. In recent years, it has financed a parking garage for a luxury condo development downtown, and given tax increment financing to hotels and other luxury developments. I want the Metro Development and Housing Agency to focus on the housing part of its mission, rather than just the development aspect.
  • Establish a revolving loan fund for affordable housing. As mayor, I will lead the way in establishing a $25 million revolving loan fund for affordable housing that can be seeded with a $10 million investment from Metro. We will then solicit $15 million in investments from foundations, businesses, and individuals.

This is not a new city expenditure, nor is it an unrealistic request to the private and not-for-profit sector to simply give us money. Rather, this self-replenishing fund will be an investment that can generate returns and have a multiplier effect on housing creation. With access to a $25 million revolving housing fund, community development corporations and other builders will be able to access approximately $250 million in funding from banks and other lenders to build affordable housing. As this program succeeds, investment amounts can be increased. This is by far the most cost-effective way to build new affordable housing.

  • Preserve existing housing. Building new housing is expensive. Preserving existing affordable housing is much more cost effective. Affordable housing financing is complicated. With my deep background in development, I know that an experienced team can leverage tax credits for preservation. That will allow us to preserve existing units. Under my leadership, I will ensure that we are maximizing the affordable housing subsidies we grant and that federal, state, and local sources work together.
  • Bring real expertise to housing policy. Addressing the challenge of affordable housing requires more than one or two staff people in the mayor’s office. We need to bring real expertise to housing policy and get it out from under the political purview of the Mayor’s Office. As your mayor, I will facilitate the creation of a real ten-year plan to preserve and create a meaningful number of affordable housing units at an appropriate price with measurable results. One key task is examining how Metro currently coordinates efforts across departments in this area. The need to make certain changes is already evident. The current One Roof public funds should be reallocated to support needs-based solutions. The PILOT ordinance could be expanded beyond Low Income Housing Tax Credit projects to include all affordable housing projects funded by the Barnes Fund, THDA grants. We should use nonprofit groups to leverage other federal and state housing funds for affordable housing in Nashville. Additionally, I will create an affordable housing board of public entities, for-profit developers, nonprofits, and elected officials, including Metro council members and state legislators, to identify obstacles and challenges to affordable housing projects, and propose evidence-based solutions that could work in our city.
  • Improve residents’ access to services.  Under the current system, it’s hard for people who need help to get it. We need to find better ways to communicate and work with homeowners and renters who are experiencing housing instability. We also need to work with nonprofits, churches, neighborhood associations, and others to figure out the needs of each community. As Mayor, I will ask Metro’s Planning Commission to work with each Metro Council member to create a description of what affordable housing would best fit within their community and how affordable housing can support and enhance the quality of life for residents. Guiding principles for what high quality affordable housing looks like across the city will give developers something to respond to and will allow opportunities for community input.
  • Increase Transparency. I am committed to increasing transparency on how funding is used to address the affordable housing crisis in our city. We will conduct and publish performance audits to confirm that that money we allocate is being used where it should be used. Auditing the Barnes Fund and Nashville’s HUD HOME/CDBG grants and process will ensure that we maximize the impact and the speed necessary for better results. We will also audit and track the use of General Obligation bonds by MDHA.

 

Nashville is going to grow more in the next five years than in the last five years. We need to welcome everyone who comes, and honor everyone who is already here. My task as mayor will be to manage that growth and address the costs of growth, one of which is affordability. As mayor, I will commit to doing the hard work of getting affordable housing right. That will require working through many layers of complexity to maximize our existing and future resources that can be devoted to creating and maintaining affordable housing units. We will do the hard work because we care about our neighbors, our neighborhoods, and in creating conditions that allow us all to call Nashville home.

I want to hear your thoughts and ideas. With your help and support, we can create a city that works for everyone.

 

John Cooper

615-762-8856 (call or text)

campaign@johncooperfornashville.com