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Councilmember Berkeley Allen briefs board on proposed change to Mixed Income Pilot formula
Summary
Councilmember Berkeley Allen updated the Health and Educational Facilities Board on a proposed change to the Mixed Income Pilot that would replace the program’s three-tiered tax-abatement formula with a market‑responsive calculation based on small-area rents and a 30 percent-of-income affordability benchmark.
Councilmember Berkeley Allen reported to the Health and Educational Facilities Board on a planned change to the city’s Mixed Income Pilot that would alter how tax abatements are calculated for mixed-income housing developments.
Allen said the change would replace the program’s current three-tiered, fixed formula with a dynamic calculation that compares small-area market rents to a rent level equal to 30% of household income — “which is the definition of affordable housing,” she said. Allen told the board the proposed approach is similar to a formula used in Chattanooga and would let abatements track local market conditions so they “will not … become either inappropriate or too good of a deal as market rates change.”
The councilmember said she has deferred a resolution she planned to take to the council and expects to reintroduce it in May. Because the board has approval authority over changes to the pilot under the legislation, Allen said she would send the current tiered formula and the proposed replacement formula to the board and the housing division for review and requested feedback before the resolution returns to council.
Allen also noted that industry stakeholders have suggested changes to contract language administered by Metro Legal and said she would share those suggestions with board staff.
Why it matters: The pilot governs how developers receive tax abatements in exchange for setting aside units at income-restricted rents. Changing the calculation method could affect the size of abatements, developer participation and long-term affordability in market-sensitive areas.
Allen closed by asking whether board members had questions; none were raised at the meeting, and staff agreed to accept the materials Allen offered to send.
The councilmember’s remarks occurred during the meeting’s public comment period. The board did not take formal action on the proposal during this session; Allen said the measure will appear before council later and asked the board to review the proposed formula in advance.
