WOULD AIRPORT INN PURCHASE BE RIGHT SOLUTION FOR CITY?

In his campaign for mayor of Chattanooga earlier this year, then-candidate Tim Kelly included nine areas of action in which he wanted to make strides in his first 100 days in office.

One of those was affordable housing, specifically “to boost [the] affordable housing supply.”

That supply is what Kelly and city officials have in mind with a proposal to buy the 74-room Airport Inn at 7725 Lee Highway and turn it into apartments for low-income residents.

The apartments, according to Joda Thongnopnua, interim chief of staff for the mayor, would not be a week-to-week solution for homeless individuals but could fit various residential uses and could include access to wraparound services that would help tenants “climb the economic ladder.”

It will depend “what we hear from the neighborhood,” he said.

Thongnopnua said the location is not near downtown but does have access to many services in the East Brainerd area through CARTA’s Dial-a-Ride, which is available only steps away from the building. The bus goes to points in East Brainerd such as grocery stores, big box stores, Gunbarrel Road hospitals and doctors’ offices, employers like Volkswagen and Amazon, and the Social Security Administration.

He said a plan for the facility — who is eligible, whether or how much residents would pay, and who would oversee the initiative — is still being worked out.

The matter will first come up for consideration before the Chattanooga City Council on Tuesday.

Funds from the American Rescue Plan Act of 2021, passed by Congress in the wake of the ongoing COVID-19 pandemic, would finance the purchase price of no more than $2.79 million, Thongnopnua said.

“There’s not a lot of places where you can get a unit for [approximately] $35,000 per room,” he said, adding that newbuild units cost about four times as much. “It’s a significant cost savings. These opportunities don’t come along very often, and it would allow us to expand our options.”

Thongnopnua said if the building is purchased, it’s not clear yet how renovations, landscaping and ongoing maintenance of the property would be paid for.

It’s possible more of the nearly $40 million in recovery funds the city received this year would help with the renovations, but it’s not a given. The amount could go in next’s year’s capital budget and any ongoing maintenance could be added to the city’s operating budget, he said.

The apartments almost certainly will not be rented at market rate, but Thongnopnua said it’s “possible” some who stay there might pay rent. The city landlords, in all likelihood, also will need to hire a management agency to make sure the property is kept up.

However, there will be “some expectation from the tenants,” he added.

In his July report on his first 100 days in office, Kelly said four action items surrounding affordable housing already had been completed and two were in progress.

He said the city had finished an audit of the Affordable Housing Trust Fund to ensure the city is leveraging funding sources and incentives like the HOME Investment Partnerships Program and Low-Income Housing Tax Credit; had completed a survey of city-owned properties that could be converted into such housing; had convened private, nonprofit and foundation representatives to discuss the creation of strategies to finance the development of affordable housing; and had developed a strategic plan to convert 100 city-owned properties into affordable housing by Dec. 31 of this year.

In progress were revitalizing the Land Bank and implementing processes to convert vacant, abandoned and delinquent properties to affordable housing, and working with the state legislative delegation as necessary to resolve issues with liens.

During the campaign, Kelly said affordable housing was “an epidemic” but was “a basic function of supply and demand.”

“We also have to create vehicles and methods so that [the houses] aren’t Band-Aids,” he said, “so that they’re permanent solutions to the problem.”

We think the hotel could be part of an affordable housing solution. But council members will need to ask the tough questions about this approach and whether getting in the landlord business is the right thing for the city to take on.

Plus, the building lies in an area of other low-priced hotels that a neighbor says is “a constantly evolving drama with police officers and ambulances,” but that’s an issue Thongnopnua says the purchase can change.

“We want to bring up the neighborhood, add some life in,” he said. “There are not a lot of [available] units like this.”

Time will tell if that will be an affordable housing solution the city will want to replicate elsewhere.