The Metropolitan Development and Housing Agency this week announced a milestone in affordable housing for Nashville: MDHA’s Payment in Lieu of Taxes program, which started in 2016, has helped finance 10,000 apartments in Nashville that are affordable to people with a low to average income.
MDHA serves as the development agency for Metro Nashville, managing housing for thousands of Davidson County residents who use housing vouchers, rental assistance or live in public housing.
“Public-private partnerships are key to addressing the need for affordable housing in Nashville,” MDHA Director Troy White said in a news release. “While there is still much work to be done, MDHA’s PILOT program achieving this important milestone is the result of a tireless team effort with public and private partners that will result in supporting housing for all Nashvillians.”
The PILOT program works by providing a ten-year property tax rebate to housing developers who qualify for the Low-Income Housing Tax Credit, issued by the Tennessee Housing Development Agency. The tax credit encourages affordable housing developments that might not otherwise be feasible.
Of the 10,000 units built or preserved, 6,115 are completed and 3,898 are under construction. According to MDHA, nearly 75% of the program’s 50 properties are new construction.
LDG Development was one of the first developers to use the program in 2016 with Paddock at Grandview, a 240-unit apartment community affordable to families making less than 60% of the median income in Nashville. The developer has used the PILOT in subsequent workforce housing developments.
“Simply put, without MDHA’s PILOT, building affordable new housing is not financially feasible,” said Josh Haston, LDG development manager. “We have continued to work with the city and MDHA to develop more financial instruments in the affordable housing toolbelt and look forward to creating more instruments soon.”
Mayor Freddie O’Connell said in a news release that his administration is focused on improving Metro’s housing options.
“This administration’s priorities are improving the quality of life and making Nashville more affordable, and programs like PILOT are part of the tools we are deploying to help address the need for affordable housing in our community,” he said.
Reporter Molly Davis covers growth and development in Nashville. Reach her at mdavis2@gannett.com.
This article originally appeared on Nashville Tennessean: How Nashville’s tax break spurred the creation of 10,000 affordable apartments
