Transit/Affordability – April 16 Update

This is my next update about how affordability will interact with transit-oriented development in Nashville. This post is a little (a lot??) wonky — sorry about that. If you need orientation on the issues, it might be helpful to read my two previous posts here and here.

This week, the Council is considered a Substitute Ordinance to approve a Donelson Transit-Oriented Redevelopment District. I believe we will adopt the Substitute and then defer public hearing and second reading until our May 15 meeting. This will allow time for the public to consider the Substitute and for the Planning Commission to have a public hearing about it on April 26.

This Donelson TOD legislation is critically important because it is a real-life demonstration of whether Metro will be as committed to affordability as it will be to building transit infrastructure. It is also important because this legislation will likely serve as a template for future transit development if the referendum passes. I think we are making good progress on the legislation.

For now, to see the proposed Substitute Ordinance, you need to look at the package of amendments and substitutes that Councilmembers get the day before Council meetings — see here, at page 2 to 28 of the PDF. If the Council updates the legislation with the proposed Substitute Ordinance tomorrow, I’ll update the link later this week.

I’ve been working with MDHA for at least a month now about changes to the legislation to make the affordable housing obligations more clear. You should know that Councilmember Jeff Syracuse from Donelson is working really hard on this legislation. His district should be proud of him and his commitment to making this work well for his community.

The proposed Substitute Ordinance is largely agreed to by MDHA…but there are things that we are still discussing. I’m going to run through the changes I have asked for and the current status.

  1. Amend to clarify that a minimum of $10 million of the approved tax increment financing (TIF) will be used for affordable housing. STATUS: The Substitute creates a bucket of $10mm of TIF for affordable and workforce housing. (Remember “affordable” is 0-60% of the area median income, and “workforce” is 60-120% of the area median income.) The Substitute calls for a periodic (at least every 5 years) reassessment of the balance between affordable and workforce housing TIF funds. The Substitute requires that during the initial 5 year term, ALL of the money from this $10mm bucket would have to be used for affordable housing. There is an ongoing debate I am having with MDHA whether to permanently set this bucket for affordable housing only, or to reassess the balance between affordable and workforce TIF every five years. My position is that this plan is being approved for 30 years and that this is a long, long time. I want the Council to be able to reassess the balance between affordable and workforce TIF every 5 five years. I want this Council-involved periodic reassessment to be in the template we use for these districts going forward.
  2. Amend to state that, for every project with residential units that asks for tax increment financing, there will be a minimum of 10% of the units that are affordable. This requirement must apply even if the total amount of tax increment financing for affordable housing in the district has exceeded $10 million. STATUS: Achieved in the Substitute. MDHA agrees.
  3. Amend to state the minimum period of mandatory affordability for residential units financing by tax increment financing. STATUS: Achieved in the Substitute. MDHA agrees. The minimum affordability period will be 15 years (which is pretty long in the affordable housing world.)
  4. Amend to state that, because a TOD is designed for Nashville residents to live along transit corridors, no investor-owned (Types 2 and 3) short-term rentals will be allowed in the TOD. STATUS: Not achieved. I’m giving up on this one. Others will need to pick up this ball and run with it if they think it is important.
  5. Amend to require creation of a unified process for approving design and zoning changes in the district. STATUS: This one is a work-in-progress. MDHA and Metro have told me that they will enter a memorandum of understanding to work to re-invent the way this will work for transit-oriented development districts. The idea is that people shouldn’t have to go to MDHA and Metro to get projects approved. A more efficient process should be built. I haven’t seen a proposed MOU yet. So, for now the Substitute is clear that the design review process in the plan is temporary and can be replaced later. I am hopeful there is more progress on this between now and 3rd reading in May.
  6. Amend to allow both the Metro Council and MDHA to initiate amendments to the plan (instead of just MDHA), subject to the approval of the other body. STATUS: Achieved in Substitute. MDHA agrees.
  7. Amend the plan to expressly acknowledge the new requirements of Metro Code provisions 5.06.020, 5.06.050, and 5.06.060 passed in 2016. STATUS: Achieved in Substitute. MDHA agrees.
  8. Amend to add language in the plan to expressly forbid the use of tax increment funds from this district in any other economic redevelopment district or transit-oriented redevelopment district. STATUS: Not quite fully resolved. MDHA is asking that spending tax revenue from this district could be allowed outside the district if approved by the Council. The Substitute currently calls for this practice to be prohibited. This one is important to me. It is really bad policy to use tax revenue from one development district in some other part of town. I’ll stand firm on this one.
  9. Have the administration (aka Mayor) commit publicly to conduct a survey of affordable housing in the area surrounding the district before creating the district. STATUS: In a video released on April 13, 2018, Mayor Briley said he was “committed to the recommendations” of the Transit & Affordability Taskforce. This was one of the recommendations…but he didn’t mention it by name. I have separately received assurances from people in the administration that I believe that this will be done. So, I consider this issue kind of resolved…resolved, but not in a way I can really prove to anyone.
  10. Have the administration commit publicly to set firm goals for affordable units to be built and preserved in the TOD. STATUS: In the video, Mayor Briley committed to set “ambitious and achievable goals” in each of our TODs. I have also received separate assurance that firm affordability goals will be set for the Donelson TOD. I consider this resolved.
  11. Commit to additional funding above existing levels for affordable housing according to the recommendations of the Taskforce. STATUS: In the video, Mayor Briley promised that, “in the coming years,” he would work with the Council and housing advocates to establish a dedicated funding source for affordable housing and land bank. Honestly, given his short time in office and the looming budget and election cycles, this is probably as strong a statement that he could make and stand by in the future. I consider this resolved.
  12. Prior to the May 1 referendum, commit to create both a community land trust and a community land bank, and commit to funding levels and the timing for each. STATUS: In the video, Mayor Briley expressed support for a community land trust and a land bank. This is good, but falls short of explaining a timeline and funding level. But, again, given his short time in office and all that is on his plate, I don’t know that he could credibly give more detail at this time. I am going to trust him on this one too.

The summary is that I feel good about the direction of this legislation. The goal is to have this legislation be the backbone of a real and continuing commitment by Metro to value affordability as much as we value the physical transit infrastructure.

If you have questions or comments, email me at bob.mendes@nashville.gov, or catch me on twitter @mendesbob.

Bob Mendes

Bob Mendes represents all of Nashville as a Council-At-Large member of Nashville’s Metro Council. He is Chair of the Council’s Charter Revision Committee, a member of the Metropolitan Audit Committee, and a member of the Council’s Budget & Finance Committee, Rules & Confirmations Committee, and Ad Hoc Affordable Housing Committee. Bob also practices business law at Waypoint Law PLLC. Bob’s complete bio is here. You can follow Bob @mendesbob.