Chattanooga officials propose voluntary zoning incentives to add permanently affordable units

City of Chattanooga housing staff on a council meeting presented a proposed Voluntary Incentives Program (VIP) that would give developers zoning relief in exchange for new units kept affordable in perpetuity.

The program, presented by Laura Monroe, director of housing policy for the city, would offer a set of land‑use incentives — most notably a 30% density bonus, reduced parking minimums and, in strong markets near transit, an additional 30% height bonus — in return for affordable units restricted at 80% of area median income (AMI) or below and protected by a 99‑year deed restriction.

Monroe said the proposal grew from more than a year of work by the mayor’s office and partners to change state law so municipalities could offer incentives tied to affordability. "This is a completely voluntary new program that offers some zoning incentives in exchange for the development of new affordable housing," Monroe said, adding that the city sees the proposal as a way to "ride the wave of new development" without committing city funds.

Why it matters: Chattanooga faces what presenters described as a housing mismatch and affordability gap. Monroe cited city data showing 44% of households earn less than 80% AMI and said rental prices have risen steeply since 2020. Presenters also said the city has an estimated gap of about 14,000 one‑bedroom units compared with…