The City of Chattanooga has been named a co-winner of the 2026 Ivory Prize for Housing Affordability in the Policy category by Ivory Innovations, an operating foundation and research center based at the University of Utah. The Ivory Prize is an annual award recognizing innovative, feasible and scalable solutions that advance housing affordability across the United States.

The Chattanooga Affordable Housing PILOT (Payment in Lieu of Taxes) is a per-unit tax abatement program that incentivizes mixed-income affordable housing production without direct public subsidy.

In March 2024, the City of Chattanooga made a first-of-its-kind change to its long-standing PILOT program by directly tying the amount of tax abatement to the cost of providing affordable units, a fundamentally new way of using tax incentives to fund mixed-income housing development. 

“This award underscores a simple idea: better policy design can unlock affordable housing, even with limited resources,” said Nicole Heyman, chief policy officer for the city. “By pricing affordability clearly, Chattanooga is incentivizing mixed-income housing in places it wasn’t possible before.”

The redesigned program right-sizes the tax abatement on a per-unit basis, transforming what was once a gap-filler for federally subsidized projects into a standalone, local incentive for mixed-income housing that does not rely on oversubscribed federal housing resources. The city’s publicly available PILOT calculator makes the exchange of tax abatement for affordable units clear and transparent for every applicant. 

“Chattanooga has demonstrated that cities don't have to wait for federal dollars to produce affordable housing, they can unlock it through smarter local policy design,” said Chris Herbert, managing director of the Harvard Joint Center for Housing Studies and Ivory Innovations Advisory Board Member. “By directly linking tax abatement to the true cost of providing affordable units, the Chattanooga PILOT program has created a very innovative tool that any city with tax abatement authority can replicate.”

The redesigned PILOT replaces a one-size-fits-all incentive with a simpler, more precise approach. The amount of tax abatement is directly tied to the cost of affordable housing. That means public investment is clearly connected to public benefit. A publicly available calculator makes the process transparent, so anyone can see how the numbers work.

Early results show the program is doing what it was designed to do. It’s an incentive for any developer to include a share of affordable units, expanding housing choice throughout Chattanooga. As the program grows, it offers a practical model for other cities looking to expand housing options using the tools they already have.

The Ivory Prize evaluates submissions across three categories: Construction & Design, Policy, and Finance, selecting winners whose innovations demonstrate the greatest potential to scale and make lasting impact on housing affordability nationwide. Winners are selected from a competitive pool of applicants and evaluated by panels of industry experts and luminaries.

For more information about the 2026 Ivory Prize winners, visit http://ivoryinnovations.org/ivory-prize.