Nashville wins $5M for affordable housing through competitive federal program

Nashville has been awarded $5 million in funding from the federal government to help remove barriers to building affordable housing.

Metro was one of 21 places to receive a grant, despite more than 175 applications for the Pathways to Removing Obstacles to Housing (PRO Housing) program. The White House initiative is working to support communities in addressing barriers that prevent affordable housing from being built or preserved. This includes outdated regulations and land-use policies, lack of financing for developments or inadequate infrastructure. In round one, the government doled out $85 million to 21 governments.

To secure the grant, Nashville demonstrated its housing need — the city estimates a shortage of 13,000 units for those at or below 30% of the area median income — and local barriers like high land cost and restrictive land use policies (only 7% of land in Davidson County allows for the construction of multifamily apartments and homeownership units). It also cited some of the actions it has recently taken to promote housing — including the Barnes Fund, MDHA’s Payment In Lieu of Taxes program and expediting building permit timelines for income-restricted affordable housing.

Nashville also listed their intended uses for the grant. Damon Smith, general counsel for the U.S. Department of Housing and Urban Development, said Nashville’s application was successful, in part, because the city is planning to establish an affordable housing finance program.

“It takes many layers of funding to be able to develop affordable housing, and there’s often gaps in that funding,” Smith told WPLN News. “Just the amount that you would need to be able to get that low-interest loan, whether it be federally insured or privately-provided financing. And a lot of communities are finding that if they can help fill those gaps, they can make sure that the needed affordable housing is developed at a timely basis.”

Along with this program, Nashville will be using the funds to:

• acquire land and rehabilitate existing units into affordable and permanent supportive housing by combining the funds with Barnes Fund dollars
• support community organizations in converting underutilized land and spaces into affordable housing
• establish a housing accelerator program that will support emerging developers, organizations and small businesses

“I don’t think this is an overnight thing,” Smith said. “But it certainly is something that I think will improve the ability of communities who have won this funding to be able to meet that staggering demand out there for safe, affordable homes in communities.”

Nashville may be eligible for more federal funding later in the year, when the department plans to release an additional $100 million.