The City Council is considering a $750,000 investment in the newly formed Tennessee Valley Community Land Trust as one strategy in helping more Chattanoogans be able to purchase a home.

Under the Community Land Trust concept, a person can purchase and own the physical house or unit at a significantly lower price because they do not have to buy the underlying land. The trust retains ownership of the land beneath the home.

City Councilman Ron Elliott is among those heading up the new effort and is on the board. Also speaking in favor were Council members Jenny Hill, Dennis Clark and Jeff Davis.

At a council budget meeting, Kevin Roig of the mayor's office said the administration supports the program, but prefers an initial investment of $250,000.

Councilwoman Hill said the higher investment of $750,000 would cover three years of operations for the new group. She said it has already raised about $1 million and would need to raise $500,000 more if the city goes with the full $750,000.

She said in a memo to council members:

To strengthen the long-term impact of Chattanooga’s housing investments while ensuring responsible stewardship of public funds, I respectfully ask the council to consider a targeted adjustment to the proposed Economic Development Budget.

Recommended Budget Adjustments

Current Proposal: ? $3 million allocated to Down Payment Assistance (DPA) Proposed Revisions: ? $2.25 million allocated to the existing DPA program under current program guidelines ? $750,000 (one-time investment) allocated to support three years of operating expenses for the Tennessee Valley Community Land Trust ? Reallocate $125,000 funding for the proposed Special Housing Programs Manager position in the Economic Development budget to instead create an Economic Development Incentive Manager position

The DPA program launched in May 2026 and already has approximately $3 million available to support the final two months of FY26. As a result, the program is expected to enter FY27 with substantial existing capacity and does not require the full proposed appropriation immediately

This creates a strategic opportunity to invest a portion of those funds into a permanent affordability solution that will multiply the long-term value of the City’s housing investments. Investing in Permanent Homeownership Affordability The Tennessee Valley Community Land Trust is a fully community-driven initiative led by respected local leadership, including Board President Lisa Pinkney and founding board member Council Vice Chairman Ronald Elliott. Importantly, the City of Chattanooga has already pursued multi-million-dollar grants to establish a community land trust model. This recommendation achieves that same long-term objective at a fraction of the previously contemplated $6m+ public cost. A $750,000 investment would:

? Establish a lasting tool for generational homeownership affordability

? Create permanent affordability rather than one-time depreciating subsidy assistance

? Preserve public investment in perpetuity through subsidy recapture and

? appreciation sharing

The recommendation also aligns with the administration’s broader affordability goals by creating pathways for deeper affordability over time.

Expanding Access to Homeownership

Today, the City’s DPA subsidy of approximately $15,000 ($21,000 total assistance) is likely to have the greatest impact for households earning between 100–120% AMI (2 person household - $80-90k income)

The Community Land Trust model creates the potential to dramatically expand access:

? The TVCLT’s goal is to achieve affordability for buyers at 80% AMI (2 person

? Over time, Mayor Kelly’s DPA program could then serve households at 60–70% AMI (2-person household $45k-55k income) through CLT-supported homes

? Any subsidy invested into a CLT home remains in the community permanently and increases in value as property values appreciate This approach transforms public subsidy from a one-time expenditure into a permanently recyclable community asset.

Accountability & Long-Term Sustainability

To ensure strong fiscal stewardship, I recommend making the FY27 $750,000 allocation contingent upon the TVCLT securing $1.5 million in matching subsidy funding. As fundraising milestones are achieved, the organization could draw down the City allocation proportionally. Based on current projections, once approximately 225 homes are placed into the trust, the model becomes operationally self-sustaining. These first three years are therefore critical bridge years that allow the organization to focus fundraising efforts on subsidy acquisition and portfolio growth.

Strengthening Economic Development Oversight

Finally, scaling the DPA program responsibly allows the City to address another pressing operational need: enhanced oversight of economic development incentives. Reallocating the $125,000 salary and fringe benefits cost proposed for a Special Housing Programs Manager position to an Economic Development Incentive Manager would provide:

? Daily oversight of Tax Increment Financing (TIF) agreements

? Improved accountability and compliance monitoring

? Stronger return-on-investment analysis for incentive packages

? Better long-term protection of taxpayer resources This position would strengthen the City’s economic development infrastructure while ensuring public incentives generate measurable community benefit.

This proposal preserves robust support for Chattanooga’s new Down Payment Assistance initiative while strategically investing in a permanent affordability model that can serve generations of residents. It balances:

? Immediate housing assistance

? Long-term affordability

? Fiscal accountability

? Economic development oversight Most importantly, it transforms a portion of today’s housing investment into a lasting community asset that will continue creating affordable homeownership opportunities for decades to come.