ORDINANCE NO. BL2016-335

ORDINANCE NO. BL2016-335

An ordinance to establish the Inclusionary Housing Fund (“Fund”) and to appoint the Barnes Fund as the administrator of that Fund.

WHEREAS, pursuant to T.C.A. § 5-9-113 the county legislative body is authorized to appropriate funds for workforce housing; and,

WHEREAS, pursuant to T.C.A. § 6-54-111 the legislative body of each municipality may appropriate funds for the financial aid of any nonprofit charitable organization or any nonprofit civil organization; and

WHEREAS, the Metropolitan Government of Nashville and Davidson County is bound by both T.C.A. § 5-9-113 and T.C.A. § 6-54-111; and

WHEREAS, the Metropolitan Government of Nashville and Davidson County has undertaken an Inclusionary Housing Feasibility and Market Study (the Study); and

WHEREAS, the Study found that there has been cost appreciation and housing turnover in central areas of the city; and

WHEREAS, the Study found that 24% of homeowners in the city are cost-burdened and 46% of renters in the city are cost-burdened; and

WHEREAS, cost appreciation and housing turnover in central areas can lead to the displacement of cost-burdened households and gentrification; and

WHEREAS, 29% of all 2015 home sales in Nashville and Davidson County were affordable to a buyer earning 80% AMI for a 2.5 person household; and

WHEREAS, much of the housing affordable to 80% AMI is outside of the central areas, with poor access to jobs, transit and services; and

WHEREAS, affordable and workforce housing is a primary concern of the citizens of Nashville and Davidson County, as it continues to be a major barrier to economic progress for many in Nashville;

WHEREAS, increasing the supply of affordable and workforce housing supports economic growth and is an important tool in reducing poverty in Davidson County; and

WHEREAS, the Metropolitan Government has adopted an Inclusionary Housing program pursuant to Ordinance __________which requires certain residential developers to work to provide workforce housing; and

WHEREAS, the Metropolitan Government believes that workforce housing will provide a substantial ongoing benefit to the City if it can be provided and overseen pursuant to the Inclusionary Housing program; and

WHEREAS, the Inclusionary Housing Program provided for in Ordinance ___________is contingent upon the creation of this Inclusionary Housing Fund.

NOW, THEREFORE, BE IT ENACTED BY THE COUNTY OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:

Section 1. The Metropolitan Government hereby establishes the Inclusionary Housing Fund (“Fund”). Pursuant to T.C.A. § 5-9-113 and T.C.A. § 6-54-111, an amount equivalent to a portion of the property tax revenues for each project site that triggers the Inclusionary Housing policy pursuant to Ordinance __________, as more fully outlined in Section 2, shall be provided on an annual basis via a grant resolution of Council to the Barnes Fund for administration pursuant to the Inclusionary Zoning bill, Ordinance ______________.

Section 2. Allocation of Funds. For each project that triggers the Inclusionary Housing Fund, a grant in an amount equivalent to the following percentage of property tax revenues shall be made available by the Council for transfer to the Barnes Fund.

A. On Site Construction. 60% of the incremental increase in the property taxes for the specific development site will be allocated to the Fund. The incremental increase in property taxes shall be calculated by subtracting the current property taxes paid by the parcel before redevelopment occurs from those property taxes paid on the parcel once development is complete.
This allocation shall be made annually for 20 years, so long as the funds are available.

B. Off Site Construction. 40% of the incremental increase in the property taxes for the specific development site will be allocated to the Fund. The incremental increase in property taxes shall be calculated by subtracting the current property taxes paid by the parcel before redevelopment occurs from those property taxes paid on the parcel once development is complete. This allocation shall be made annually for 20 years, so long as the funds are available.

C. In Lieu Contribution. 20% of the incremental increase in the property taxes for the specific development will be allocated to the Fund. The incremental increase in property taxes shall be calculated by subtracting the current property taxes paid by the parcel before redevelopment occurs from those property taxes paid on the parcel once development is complete.
This allocation shall be made annually for 20 years, so long as the funds are available.

Section 3. The Barnes Fund, in conjunction with MDHA shall establish an Inclusionary Housing Bank. The in lieu contributions referenced above shall be deposited by the Barnes Fund into this bank and the Fund shall work with MDHA to administer those funds in an effort to develop additional workforce housing options as defined by T.C.A. §5-9-113 (2) through (1) the construction of new workforce housing units; or (2) the conversion of existing rental units to workforce housing units.

Section 4. In the next 180 days the Barnes Fund shall develop and propose to the Metropolitan Council a plan to convert existing rental units to workforce housing units, by using the Workforce Housing Bank or other funds that may be marshalled to finance this investment.

Section 5. The Barnes Fund shall establish a written set of policies and a formalized plan to administer Ordinance ___________. This plan shall be presented to the Metropolitan Council’s Affordable Housing Committee within 60 days of this Ordinance’s passage, and on a semi-annual basis the Barnes Fund shall be required to provide updates to the Ad Hoc Affordable Housing Committee summarizing their efforts to provide additional workforce housing to the community.

Section 6. This Ordinance and the Fund referenced above shall not function as tax increment financing and the funds shall not be provided directly to the developers who are building workforce housing. Instead, the funds shall be provided to the Barnes Fund and the Barnes Fund shall develop policies and procedures for allocating whatever funds they receive on an annual basis from the Council in an effort to effectuate the Inclusionary Zoning bill.

Section 7. This Ordinance shall take effect immediately following third reading, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.

LEGISLATIVE HISTORY
Introduced:	July 19, 2016
Withdrawn:	July 19, 2016