The executive director of the Tennessee Housing Development Agency says Nashville wants more affordable housing but often ends up getting in its own way. At a ribbon-cutting ceremony Friday, Ralph Perry noted that the city has blocked some developments that have been awarded low-income tax credits.
As the state’s housing finance agency, part of TDHA's job is to dole out federal tax credits to companies bidding to build low-income housing. It is a competitive process, with more applicants than funding to go around.
That’s why, Perrey says, it’s frustrating when money is awarded to a developer who has done its due diligence but is later blocked by the city from building.
"Projects like this depend on the support of the community and elected officials," Perrey says. "And yet for us at THDA, believe it or not, Nashville and Davidson County are proving to be the toughest places in Tennessee for us to put these resources to work."
Perrey referred to two projects in particular which would have been built in Antioch. A development dubbed The Ridge was awarded $11 million in tax credit financing in 2015 and would have created 96 apartment homes. The following year, the agency awarded $6.6 million in tax credits to another developer looking to build a complex with 156 units.
The credits are “paid out” over a decade. In this case, the companies were awarded a combined $17 million in federal tax credits, or about $1.7 million a year in savings.
But these projects faced strong resistance from some Metro Council members, including attempts to rezone land and even court battles. The movement to block the The Ridge was spearheaded by Councilwoman Karen Johnson, who said there was already too much low income development in her district, leading to concentration of poverty in one area. The complex would have been built between two existing affordable complexes.
Eventually developers gave up their plans, and that money went to waste.
A spokesperson for TDHA said the agency has denied applications from other areas in the state, which are also in need, to allocate funds for stymied Nashville projects. Those credits came out of THDA's budget, but no one will get to claim them.
Had another city's development been chosen, "by now, we’d have real-world apartment homes that people would be living in," the agency says. "Instead, the $1.7 million per year never got spent. and no construction happened.”
Perrey spoke about his concerns during a ceremony Friday celebrating renovations at a low-income senior community in Old Hickory. The problem, he says, stems from a skewed perspective that affordable housing becomes a ghetto. The Old Hickory Towers — which now houses a beauty salon, game rooms and a large pavilion for residents to socialize — is also the face of affordable housing, he says.
"There is a serious misunderstanding about what the tax credits build and who we are building this for."
Nashville's Mayor has often used the term "YIMBY" — which stands for "yes in my back yard" — in support of mixed-development housing.
"We need YIMBY-ism in Nashville, and we need it now," Barry said last year at her State of Metro address. "It means yes, I want to live in a mixed-income neighborhood."
After Perrey walked off the stage, Mayor Megan Barry, who was also also in attendance and had spoken just minutes earlier, gave him a hug.