Cookeville council approves ordinance to allow hotel-to-apartment conversions with affordability rules and voucher requirement

Cookeville City Council voted July 16 to approve revisions to the city zoning code that allow adaptive residential multifamily reuse — converting existing hotels or motels into longer-term apartment units — in the CI (commercial-industrial mixed-use) district.

The ordinance, considered on second reading as O26-0611 (as read at the meeting), was revised to strengthen affordability provisions, specify how maximum rents are calculated, require acceptance of housing vouchers, and set a 90‑day minimum lease term. Mayor Lauren Wheaton, who led the meeting, summarized the city’s approach as an experiment the council was willing to try: “At the end of the day, this is something we do not have. This is, in some way, someone trying to present, quote, unquote, more affordable housing,” Wheaton said, adding she was “willing to take a chance on this.”

Why it matters: Council members and members of the public debated whether the new rules would produce genuinely affordable options or merely allow owners to reclassify properties for lower financing while keeping rents high. Supporters said the measure expands housing options and allows voucher holders to use benefits that previously were difficult to apply to extended-stay properties. Opponents warned that the ordinance’s permitted maximum rents — calculated using HUD income limits and a percentage-of-income cap — could still exceed local fair-market rent for small units and so would not be affordable to the city’s lowest-income households.

What the ordinance changes: City staff outlined four primary revisions to the draft ordinance: - Affordability thresholds were raised: the revised draft calls for larger shares of units to be reserved at defined AMI levels (the draft increased thresholds tied to 50% and 60% area median income for selected units). - Maximum-rent calculation clarified: the ordinance ties maximum monthly gross rent to HUD income limits adjusted for household size (with gross rent defined as base rent plus any mandatory recurring fees), with an allowance of up to 35% of applicable income limits for 1–3 person households when utilities and furnishings are included; the 30% threshold remains for 4‑person households. - Acceptance of subsidies: the revised ordinance changes language from “may accept” to “must accept” HUD Housing Choice Vouchers (including project‑based vouchers where applicable). - Minimum lease term: a 90‑day minimum lease was added to distinguish conversions from short‑term lodging.

Council debate and public comment: Council members split over whether the revised affordability targets would be viable for property owners. One council member said the revised caps “do not fit a sustainable model” for an owner trying to convert a hotel to longer‑term housing; another emphasized that the change opens a needed pathway for people currently living in temporary settings to gain stable addresses and access services. Multiple public commenters — including operators of extended‑stay properties and residents who work with people experiencing homelessness — described examples where extended‑stay units provided immediate, transitional shelter or were the only available option for families on waiting lists for conventional affordable housing.

Vote and next step: After amendments and discussion the council voted to adopt the ordinance as amended. The motion carried (4–1). The ordinance was approved on second reading with the added 90‑day lease provision and the mandatory-voucher requirement. The council and staff indicated they would monitor implementation and return to make adjustments if the approach did not produce the desired housing outcomes.

Implementation notes: Staff told council that some elements (for example, which units count toward the affordability percentage and how HUD income limits are applied) will require administrative details and ongoing monitoring; the new designation will not automatically rezone properties — conversions still require compliance with the administrative process and, where required, BZA approvals. Council members said the city can revisit the ordinance if monitoring shows it does not produce affordable rents for the people it aims to serve.