One Proposal To Cover The Cost Of Affordable Housing In Nashville — Borrow The Money

Ten million dollars. That’s how much advocates for affordable housing say the city needs each year to keep up with Nashville’s rapid growth.

One idea that’s being suggested to raise that much money is to borrow it.

A pair of Nashville lawmakers have filed a bill that would let Metro Nashville borrow money to pay for affordable houses.

Charlotte, Austin and Portland, Ore., have all done so in recent years. State Rep. Darren Jernigan, D-Nashville, says Metro might have joined their ranks already, if it weren’t for one catch — the city can’t under current Tennessee law.

“But it will pump a tremendous amount of money into the Barnes Fund,” says Jernigan. “And that’s, I think, what we’re looking for.”

The Barnes Fund is Metro’s pool for affordable housing. It was established in 2013 with $3 million, most of which has been spent.

Nashville wants to replenish the fund. A new tax on services like Airbnb will raise about $400,000 a year. Metro will also put proceeds from the sale of the old convention center into the fund.

But that’s still well short of what advocates say is needed. Some have suggested raising property taxes.

Jernigan and state Sen. Jeff Yarbro, D-Nashville, say an alternative could be a one-time bond issuance. They’ve sponsored
House Bill 1426/Senate Bill 1446, which would add affordable housing to the list of reasons Nashville can borrow — alongside items like roads and sewers.

The idea has the support of Mayor Megan Barry. A spokesman for Barry says borrowing could be another tool to address the city’s affordable housing needs.