Nashville needs 31,000 new affordable housing rental units by 2025, report says

The Tennessean

Nashville's shortage of affordable housing units for rent is projected to rise to 30,934 by 2025 if more isn't done to create new options for low-income residents, according to a new report from Mayor Megan Barry's office.

The growing demand for affordable housing marks a stark reversal from the real estate trends in 2000, when Nashville had a surplus of 2,000 affordable housing units for rent.

Much has changed over those 17 years in Nashville, which is on a well-documented economic hot streak that has fueled soaring housing prices and new development in neighborhoods across Davidson County.

The new housing report, dubbed "Housing Nashville" and released Monday, is billed as a document that will inform and guide Metro policy decisions on affordable housing over the next 10 years.

"Growth has brought many exciting opportunities to our city, but it's also made it difficult for many residents to stay here," Barry says in a short message that kicks off the 59-page report.

The analysis says in 2015 there was a shortage of 17,754 affordable rental housing units to meet the demand for households that earn 60 percent or below of the median household income, which is currently $52,026.

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Housing affordability is defined as spending no more than 30 percent of a household's income on housing, including utility costs. Households spending more than 30 percent of their income on housing are considered cost burdened.

The projected shortage of nearly 31,000 affordable rental units by 2025 is based off current rates of growth and does not take into account new affordable housing that could come online. Barry, elected in 2015, has made affordable housing one of her stated priorities as the issue has entered the forefront of Metro politics.

Along with the report, Barry on Monday unveiled a new effort aimed at finding affordable housing for Nashville teachers — one of several priorities outlined in the new report. The mayor's office has partnered with nine local developers and apartment managers to offer discounted rental rates for teachers. Listings have been consolidated into a new website.

“Access to affordable housing is a key component of our overall strategy to retain and attract great teachers in Nashville,” Barry said in a statement.

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Nashville's affordable housing supply has shrunk since 2000

Figures highlighted in the report — which was overseen by the mayor's Office of Economic Opportunity and Empowerment and the consulting firm Economic and Planning Systems — illustrate the city's housing challenge:

Nashville has lost more than 20 percent of its affordable housing stock since 2000.
Thirty percent of Nashvillians — 203,700 people — are unable to afford the cost of housing in Nashville.
Nashville increased in population by 23.47 percent between 2005 and 2015, and it's projected to increase by 11.71 percent between 2016 and 2026.
Forty-four percent of all renters in Nashville are cost burdened; more than 70 percent of all low-income renters are cost burdened.
More than $345 million would be recirculated into the spending activity of the local economy if all households were paying less than 30 percent of their income on housing.
Nearly 1 out of every 4 homeowners is cost burdened, including 3 out of every 5 low-income homeowners.

Nashville currently has 55,388 cost-burdened renters and 34,862 cost-burdened homeowners, according to the report.

Need greatest for low-income rental households, report says

The study found a lesser need for new affordable homeowner units in Nashville than rental units by 2025.

But the report did find a shortage of market-rate housing in Nashville on the homeownership end. The study says Nashville has a shortage of around 15,000 units below the demand for homeowner households earning 80 to 120 percent of the average median income.

Barry has discussed a four-pronged strategy to boost affordable housing in Nashville — boosting funds for affordable housing, building more units, preserving existing affordable housing and retaining existing residents.

"To sustain our growing economy, Nashville will need to build, fund and preserve at least 31,000 affordable housing units by 2025," the report says.

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Metro would seemingly need to pick up the pace to meet that goal.

In the report, the mayor's office says about 1,875 affordable units are either constructed, under construction or planned as a result of Metro's recent housing initiatives.

In her recently proposed budget for the 2017-18 fiscal year, Barry has committed another $10 million for the Barnes Fund for Affordable Housing, which functions as a pool of incentives for developers willing to build affordable housing. Barry added $10 million to the Barnes Fund in her initial budget last year.

In a first for Metro, Barry also has unveiled plans to issue $25 million in general obligation bonds to purchase and rehabilitate existing multifamily rental units as a way to preserve affordable units. Dollars also will go toward building affordable housing units on Metro-owned properties.

These are among two of the housing strategies outlined in the mayor's "housing action plan" for 2018.

Reach Joey Garrison at 615-259-8236 and on Twitter @joeygarrison.