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nashvillenext

A General Plan for Nashville & Davidson County

Adopted June 22, 2015

Volume II: Elements

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Certified per TCA 13-4-202 as a part of the Nashville-Davidson County General Plan adopted by the Metropolitan Nashville-Davidson County Planning Commission and including all amendments to this part as of June 22, 2015.

Rick Bernhardt Executive Secretary

Housing

METROPOLITAN PLANNING COMMISSION

OF NASHVILLE AND DAVIDSON COUNTY, TENNESSEE

Resolution No. RS2015-256

“BE IT RESOLVED by The Metropolitan Planning Commission that NashvilleNext is approved in accordance with the staff report and recommendations in the staff report with the following amendments: 2; 3; 4; 5; 14; 15; 16; 18; 20; 22a, 22c; 23; 24; 25; 31; 32; and the deferral of 11 areas identified in the Whites Creek area until the August 13, 2015 Planning Commission meeting with the Public Hearing closed. (9-0)”

Resolution No. RS2015-256

WHEREAS, Section 13-4-203 of the Tennessee Code, Annotated, authorizes a General Plan “with the general purpose of guiding and accomplishing a coordinated, adjusted and harmonious development of the municipality which will, in accordance with existing and future needs, best promote public health, safety, morals, order, convenience, prosperity and the general welfare, as well as efficiency and economy in the process of development, and identify areas where there are inadequate or nonexistent publicly or privately owned and maintained services and facilities when the planning commission has determined the services are necessary in order for development to occur;” and

WHEREAS, Chapter 5, section 11.504 (c) of the Metro Nashville Charter gives the Metro Planning Commission the power to “Make, amend and add to the master or general plan for the physical development of the entire metropolitan government area;” and

WHEREAS, Section 18.02 of the Charter of the Metropolitan Government of Nashville and Davidson County requires that zoning regulations be enacted by the Council “only on the basis of a comprehensive plan prepared by the Metropolitan Planning Commission;” and

WHEREAS, the last General Plan, Concept 2010, A General Plan for Nashville/Davidson County was adopted in 1992; and

WHEREAS, Mayor Karl Dean, seeing fit to update the General Plan, announced on May 22, 2012 that the General Plan would be updated, assigning the task to the Metro Planning Department; and

WHEREAS, under the leadership of the NashvilleNext Steering Committee and the Community Engagement Committee, the staff of the Metropolitan Planning Commission worked with stakeholders in Nashville/Davidson County, holding over 420 public meetings and events and soliciting input through online forums, engaging over 18,500 participants in providing public input to update the General Plan;

WHEREAS, the Metropolitan Planning Commission, empowered under state statute and the Charter of the Metropolitan Government of Nashville and Davidson County to adopt master or general plans for smaller areas of the county, finds that the process followed to develop the NashvilleNext General Plan included diverse, widespread, and meaningful community participation and substantial research and analysis and therefore finds that replacing the Concept 2010 General Plan with the NashvilleNext General Plan is warranted; and

NOW, THEREFORE, BE IT RESOLVED that the Metropolitan Planning Commission hereby ADOPTS NashvilleNext, A General Plan for Nashville/Davidson County in accordance with sections 11.504 (e), (j), and 18.02 of the charter of the Metropolitan Government of Nashville, and Davidson County as the basis for the Commission’s development decisions in the county.

⬚ figure James McLean, Chairman Adoption Date: June 22, 2015

Attest: ⬚ figure J. Douglas Sloan, III, Secretary and Executive Director

PARTS OF THE PLAN

Each part of the plan has a role to play. Some parts are broad and visionary, while others are specific and detailed. This section helps users of the plan understand how the parts fit together and support one another. No part of the plan is intended to stand alone; each can be understood only as working together with the rest of the plan.

I Vision, Trends & Strategy

Volume I presents the role and powers of the plan, key trends and issues that the plan addresses, a summary of the plan’s strategy and approach to the future, and implementation goals and policies.

II Elements

» Land Use, Transportation & Infrastructure » Arts, Culture & Creativity » Economic & Workforce Development » Education & Youth » Health, Livability & the Built Environment » Housing » Natural Resources & Hazard Adaptation

III Communities

Nashville’s Community Plans provide history and context for Nashville’s 14 Community Planning Areas, along with community-specific issues, strategies, and sketches of how different places in the community could change over time. Detailed Community Character Maps link the broad, countywide Growth Concept Map to character policies that guide zoning and development decisions.

Community Character Manual

The Community Character Manual provides detailed explanations of the character policies used in the Community Character Maps.

IV Actions

Specific tasks for Metro departments and partners to undertake, within a recommended timeframe.

V Access Nashville 2040

Volume V is the overarching vision of how transportation works under NashvilleNext.

Volume II

Housing

Contents

The Nashville Housing Market 180

Nashville’s Housing Supply 182

Housing Demand in Nashville 184 When housing supply does not keep up with demand 188

Key Ideas Shaping this Chapter 199 Creating more context sensitive supply 199 Addressing the suburbs 201 Addressing housing affordability 202

Goals and policies 204 Related plans 204

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HOUSING

Housing is a basic human need. It is a source of comfort and shelter for our families, and is a reflection of our individual selves. The right home can heal, protect, and restore, serving as a vessel of our family memories and a refuge from the outside world. The lack of a home can impede participation in civic life, like voting, or seeking a job.¹

Housing is also critical to our local economy and is a source of personal economic stability. For local economies, housing that is affordable can help create jobs, attract new employers and a skilled workforce, and lower the risks of delinquency and foreclosure, which reduces costs to local governments.² Similarly, housing can be a source of economic stability for individuals and families. A home is one of the largest purchases that a person will make.³ A home is typically a family’s largest investment and asset, particularly for minorities, where stocks and other similar investments are less common.⁴ An owner can borrow against their home’s equity to pay for college tuition, retirement, or for the initial investment in a small business.

Housing can also be the source of economic instability for a community and its residents, as we saw during the Great Recession. Falling home prices and highly leveraged mortgages can impact banking and credit systems, consumer spending, employment, and the job market.⁵ Thus, housing impacts not only our residents, but our city as a whole. Housing can also be a source of economic instability for individuals if housing options (like type, tenure, and price) are not available as people and families age and grow. Providing housing for all Nashvillians is necessary for active and productive residents, stable neighborhoods, and a stronger city. Housing is a significant component of planning for Nashville’s future.

Following is a discussion of Nashville/Davidson County’s diverse housing market, and how growth patterns, demographic change, and evolving market preferences are shifting the housing that is being built today and that will be built in the future. Nashville’s type, tenure (renter or owner occupied), and location of housing will look different in the future. Nashville can guide that change to provide diverse housing options for a

In order to maintain the housing market necessary to meet the needs of our city’s varied residents, we must match the supply of housing to the demands of current and future residents.

⬚ figure Figure H-1: Townhomes and other missing middle housing types provide housing diversity to meet changing demand.

changing population while preserving the homes and neighborhoods that make Nashville a desirable city to call “home.”

The Nashville Housing Market

Housing is part of a market in a particular county or region where homes are subject to the laws of supply and demand.¹ In order to maintain the housing market necessary to meet the needs of our city’s varied residents, the supply of housing must match the demands of current and future residents. However, due to the market nature of housing, there are increasing situations where the demand for housing is not met by supply. Missing middle housing, low income housing, single room occupancy, and multigenerational housing are some of the areas where the supply does not meet the demand.

Housing supply is the amount and variety of housing available for owners and renters. Housing demand is all of the preferences consumers have for price, tenure, location, and type of housing. Within a housing market, homes are purchased and sold between a buyer and a seller. Landlords make contracts with tenants for rental units at a certain price for a given time. Other parties also influence the housing market. Private developers, investors, and property owners provide market rate housing. The Metropolitan Development and Housing Agency and affordable housing developers use Federal, State, and charitable financing to provide affordable housing. Local governments intervene in the housing market to influence supply through regulations and incentives. The largest of these is the zoning code, which permits or limits where and what kind of housing can be built.

Since the mid-20^th century, Nashville’s housing market has been relatively stable largely because supply has kept up with changing demand. As Nashville evolved from compact and walkable neighborhoods supported by street car systems to more auto-centric large lot development patterns (suburban sprawl), private and nonprofit/government developers built housing to meet that demand. More recently however, supply is struggling to keep up with demand as preferences for housing type and location have shifted away from large lot development and congested transportation networks, back to smaller lot development in neighborhoods with quick and convenient access to jobs, services, and transit.

Who Builds Housing in Nashville

There are three major players in Nashville’s Housing Market; the private for-profit sector providing market rate housing, the private, nonprofit sector providing affordable housing, and public sector providing affordable housing. Each plays a unique role.

The role of private, for-profit sector is to provide market rate housing units that meet the ever-changing demand in Nashville. In providing market rate housing, this sector works closely with Metro departments to create housing that meets Metro’s zoning code, storm water regulations and the like. The private, for-profit sector may also work with the Metropolitan Planning Commission and Metro Council to rezone land to allow for new housing.

The private, nonprofit sector provides housing typically for families and individuals making less than 80 percent of the Median Family Income. The nonprofit sector provides affordable multifamily and single family homes for renting or owning, emergency and transitional housing, and educational services to help people become successful renters and owners. Nonprofit providers have operated in Nashville for many years. The nonprofit sector works closely with the Metropolitan Development and Housing Agency, and other funding agencies specializing in administering federal funding opportunities for affordable housing and housing for other special needs populations.

The Metropolitan Development and Housing Agency comprises the public sector and provides public housing. Established in 1938, MDHA administers on behalf of Nashville–Davidson County, State, and Federal programs for affordable housing and community development, including the Community Development Block Grant, HOME Investment Partnerships Program, Emergency Solutions Grant, Housing Opportunities for Persons with AIDS, and Weatherization Assistance Program. To foster urban growth, MDHA also oversees nine redevelopment districts to remedy blight, assists private developments with tax increment loans, and manages public improvements.

MDHA assists more than 13,000 families with housing by providing 5,400 public housing units, 110 market rate units, and 15 HOME units at 20 properties throughout the county as well as by administering 6,591 Housing Choice Vouchers and 416 VASH vouchers. MDHA also assists 349 individuals and families through Single Room Occupancy and Shelter Plus Care programs. The agency also owns eight non-public housing properties to provide 603 affordable units to Nashvillians.

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Figure H-2: The Gulch is an urban neighborhood that spearheaded Nashville’s urban revitalization through numerous public and private sector initiatives.

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Figure H-3: Mayor Karl Dean and other officials break ground on an affordable housing complex in North Nashville, part of the Barnes Fund for Affordable Housing, April 10, 2015 in Nashville, Tenn.

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Figure H-4: Rolling Mill Hill, a project of MDHA, is a mixed use, mixed income neighborhood, that also includes affordable housing for artists.

By 2040, Nashville will need a total of 352,600 housing units. This would require building 113,000 new homes, or about 3,800 housing units per year.

Nashville’s Housing Supply

Nashville has relied primarily on the private market and the public housing agency MDHA to develop housing that meets the diverse needs of the community in terms of housing type, price, tenure, and location. Beginning in the 1930s public housing agencies began building public housing, where the availability of land in low income areas and federal housing policies resulted in poorly designed, income segregated housing.¹ Similarly, beginning in the 1950s, major factors affecting where new private market housing was built included ample undeveloped or greenfield land available for development, the housing finance system, Federal and State policies, zoning, and a lack of attention to environmental constraints. This resulted in suburban sprawl. More recently, new considerations for where and how public and private market housing is built includes increasing congestion and travel time within the region, gas prices, and less readily available greenfield land without environmental constraints. With these new considerations, much of the housing supply is being newly built or redeveloped in or near Nashville’s urban core.

Since 1997, urban areas saw increases in land value—matching national and local demand trends for communities that tend to be more walkable, providing access to transit, employment, and other community amenities. From 1997 to 2001 (left map), increases in land value were concentrated to the southeast, reflecting the conversion of greenfield or vacant land to (primarily) one- and two-family subdivisions. From 2009 to 2013 (right map), increases in land value were focused in and near downtown Nashville, reflecting increasing demand for existing urban neighborhoods due to their location and access to jobs, services, and transit.

By 2040, Nashville will need a total of 352,600 housing units. This would require building an additional 113,000 new homes, or about 3,800 housing units per year. This new stock of homes should meet current and future demand by adding diversity to Nashville’s housing supply, unlike in past years where the majority of new homes were single family. From 2005 to 2010, an average of 3,553 homes were built in Davidson County. Most of these were permits for single family homes. One-quarter were multifamily building permits for five or more units.

Figure H-5: Change in land values, 1997 to 2001 and 2009 to 2013

These changes in demographics and housing demand are already beginning to appear in development patterns. Compare changes in land value from 1997 to 2001 (left) with changes from 2009 to 2013 (right). From 1997 to 2001, increases in land value were concentrated to the southeast, reflecting the conversion of vacant land to (primarily) one- and two-family subdivisions.

From 2009-2013, increases in land value were focused in or near downtown, reflecting increasing demand for existing urban neighborhoods.

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Source: Metro Nashville Assessor

Legend

• -29% to no change
• no change to 52%
• 52% to 95%
• 95% to 210%

Building Permits, Davidson County, 2005-2010

Figure H-6: Building Permits, Davidson County, 2005-2010

The majority of building permits administrated between 2005 and 2010 were either for single family or five or more multifamily units leaving very little room for housing diversity to meet growing demand.

Source: Metro Codes Department

Housing Demand in Nashville

In Nashville, and within the region, housing demand is changing; change is driven by population, demographic, and economic trends. Davidson County will gain an additional 185,000 new residents. All ethnic and racial minorities will account for 121 percent of population growth in Davidson County. Baby boomers and millennials will compose a large share of the population growth in Davidson County (36 percent and 27 percent respectively). The Great Recession also influenced the current housing market demand—impacting potential consumers’ desire and ability to purchase a home.¹

With these changes come new market demands. Consumers are looking for neighborhoods that have the design and locational characteristics of walkable neighborhoods. Consumers are also willing to trade larger lots and homes for smaller lots and homes in these desirable locations. There is also a higher propensity to rent than own. These changes impact the supply of housing in Nashville—the price, tenure, location, and type—and the actions necessary to ensure that supply keeps up with the demand.²

Population influences on housing demand

Population growth in the county and region influences housing demand. Over the next 25 years, the Middle Tennessee region will gain an additional 1 million people; Nashville’s share of that growth is anticipated to be 185,000 new residents. This population growth will facilitate the need for new housing in Davidson County. In addition, population growth in outlying counties will outpace growth in Nashville as the demand for more affordable housing options with closer proximity to moderate wage jobs increases. Additional growth in outlying counties will also impact how residents move around the region, traveling between work and home.

Considering housing, employment, and transportation, each county, city, and town in the Middle Tennessee region will have to make decisions about what is best for its residents. Outlying counties do recognize the need to provide a more diverse housing supply to meet changing demand. Regional strategies and collaborations will help counties plan for the long-term livability, economic vitality, and sustainability of the region. In the future, sustainability will be defined by how well the Middle Tennessee

region provides a range of housing options, amenities, and transportation options for the region’s growing population.

Economic influences on housing demand

Employment and economic development decisions will influence the location and type of new housing provided in the region. Over the next 25 years, employment is expected to grow by 80 percent in the Middle Tennessee region; roughly 38 percent of that job growth will occur in Davidson County.¹ As land in Nashville increases in value, many employers with lower-skill and lower-wage jobs will seek development sites in counties with lower land costs. Employees will seek housing close to these jobs, placing residents in outlying counties. Similarly, rising home prices in Nashville can force residents to outlying counties and the “drive until you qualify” method of finding an affordable place to live. As a result, transportation costs become a factor for residents who must travel throughout the region for employment and housing.

The Great Recession of 2007–2009 also had a lasting impact on the housing market. During the Great Recession, slowed consumer spending impacted the employment and job market.² As a result, between 2000 and 2010, incomes continued to decline due to lagging employment and educational attainment (especially for minorities).³ As a result, earning potential declined for a segment of the population, making future homeownership less likely for those most affected by these trends. Since the recession, mortgage availability has also declined and underwriting standards have tightened. Many potential homebuyers now face significant hurdles to purchasing a home, including impaired credit, the lack of a down payment, or the inability to meet other mortgage requirements. This

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Figure H-7: Regional growth projections Middle Tennessee expects another 1 million people by 2040. Nashville-Davidson County’s share is estimated to be 30%. Woods & Poole projections; Provided by the MPO

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Figure H-8: Per capita income by race or ethnicity, from 1999 to 2011-2013, adjusted for inflation. An overall decline in per capita income minimizes the number of potential homebuyers. Source: US Census 2000; American Community Survey (2011-2013, 3-year estimate)

would disqualify a significant number of potential homebuyers, resulting in fewer home sales and fewer homes being built per year.¹ With this trend in mind, future housing introduced in the Nashville housing market should cater to consumers with specific demands in terms of housing type, location, and tenure. This will prevent an oversupply of housing that does not meet the market demand.

Demographic influences on housing demand

Demographic changes in terms of race, ethnicity, ages and household size influence housing demand. By 2040, Nashville and the Middle Tennessee region will see a “new majority” which includes all racial and ethnic minorities, and baby boomers and millennials who will make up a large share of the population. Households are also getting smaller as baby boomers’ children leave home and millennials wait longer to start families. Housing demand reflects these demographic changes; the demand for rental housing, smaller housing units, and housing in more convenient and walkable locations will all increase over the next 25 years.

Population Diversity

Davidson County Ethnic and Demographic changes, 1980-2040

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Figure H-9: Nashville’s changing racial and ethnic diversity (1980 - 2040) By 2040, white (non-Hispanic), black (non-Hispanic), and Hispanic will each make up one-third of the population, leaving no majority race or ethnicity.

Source: U.S. Census (1980, 2010); Woods & Poole (2040)

In Nashville/Davidson County, the new majority’s share of the population will increase by 121 percent by the year 2040 (see Figure H-9). In contrast, the white non-Hispanic share of the population growth will decline by 44 percent by the year 2040. Homeownership rates are historically lower for minorities. As their share of the population rises, homeownership levels are likely to fall, unless action is taken. As the homeownership levels fall, the demand for rental housing will increase.¹

The increase in demand for rental housing is also due to demographic changes in age and household size. As people age and their children leave home, they tend to shift from owners to renters, moving into smaller homes, apartments, or assisted living units, close to services, shopping, and medical assistance.²

Considering racial, ethnic, and age demographics, 51 percent of residents will be renters by the year 2040.³

Population and age demographics also influence household size. Smaller households mean down-sized homes for older residents who wish to stay in their existing neighborhood and for the growing number of persons who choose to live alone.⁴ Younger households also contribute to smaller household sizes, as individuals and couples delay or forgo marriage and children. As a result, Davidson County is forecast to have the smallest household size in the region at 2.28 persons per household, and will comprise 91 percent share growth of households without children by the year 2040.⁵

Demographically, the biggest changes in Nashville are people who prefer smaller homes on smaller lots when they include a shorter commute. Housing type, tenure, character, and location are critical considerations when planning for Nashville’s future housing market.

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Figure H-10: Households with and without children, 1960-2040

The number of households without children will increase as the children of baby boomers leave home and younger consumers wait longer to start families.

Source: Arthur Nelson

Context sensitive design

A site layout that is related to its surroundings.

Elements of the design are created to complement the style, scale, or placement of the adjacent properties and community. Context sensitive design features buildings that are integrated into their settings with a sensitive approach. This involves detailed planning, consideration of the adjacent properties, communication with the surrounding community, and customizing the design to fit and interact with the existing context. Aesthetics and proper connectivity have an enormous role in context sensitive developments.

⬚ figure Context sensitive single family infill housing

⬚ figure Non-context sensitive single family infill housing

⬚ figure Context sensitive mixed use building

When housing supply does not keep up with demand

Nashville’s housing supply has traditionally kept up with demand. The recent increase in housing costs (fair market rents rose between 21 and 39 percent between 2000 and 2013)¹ in Nashville’s urban core suggests there is not enough supply to meet demand, particularly in high demand areas.

As the demand (number of customers) exceeds the supply (housing in locations close to jobs, transit, and services), then the price of housing in those areas will increase. Housing suppliers try to keep up with demand by building housing in the type, tenure, and location demanded by the market. This pressure is most felt in Nashville’s urban core, and has created several issues to be addressed as Nashville plans for the next 25 years—context sensitive development, housing affordability, and suburban revitalization.

Urban infill housing and the need for context sensitive design

In Nashville, few neighborhoods meet the increasing market demand for places with diverse transportation options—sidewalks, safe routes for cycling, transit—and proximity to jobs, services, and good schools. These places exist mostly within Nashville’s urban core. These neighborhoods often do not have the housing types for people seeking these places. In these areas, suppliers are trying to keep up with market demand through infill development. Older housing is being replaced with new housing, and community tension associated with change is rising.

Infill development occurs on land with access to existing infrastructure (such as streets, transit, water, sewer, and electricity). Infill development can occur on large commercial parcels or on small residential parcels in a neighborhood. Generally, more intense development replaces less intense development, such as when two large homes replace a smaller one or when a mixed use building replaces a commercial strip. Both are occurring primarily in Nashville’s urban core, and both yield positive and negative impacts for Nashville’s neighborhoods.

Infill along corridors and within commercial centers accomplishes several things. First, redevelopment typically increases the amount of development on the land, making use of existing infrastructure and services more efficient. It also increases people and jobs close to

transit service, increasing the frequency of transit service. When infill development occurs in neighborhoods close to corridors and centers, the effect is the same. The location of housing near the corridor or center places people closer to jobs and services. This results in less daily use of cars, which over time reduces daily traffic woes. While there are many positive effects of infill development, many neighborhoods unfortunately feel the negative effects as well. The most argued is the change in neighborhood character caused by the displacement of existing longtime residents and a lack of contextual design.

Context sensitive design describes infill development that considers the context around it. Infill development should consider the type of neighborhood (rural, suburban, urban), the existing housing types (single, two, or multifamily) and housing form (how wide, tall, and deep the building may be on the lot). The end result is not homogenous development (where every house on the street looks the same), but development that blends with its neighbors and can coexist together on the same street or block (see Context Sensitive Design on page 188).

Contextual design becomes very important as Nashville’s housing market strives to keep up with demand. Demand will continue to be driven by baby boomers and millennials who seek desirable locations over larger lot sizes, and prefer neighborhoods with a variety of housing types that meet their particular household demands. Contextual design will help meet the goal of supplying housing that meets demand, while maintaining neighborhood character.

Market demand’s impact on housing affordability

As the demand for housing increases in a select and few desirable locations, the cost of land increases. The cost of housing includes the cost of the land, the price of the home, insurance, property taxes, and utilities. Transportation costs are also affected by the location of housing.

Increasing housing values can be beneficial, as increases in the value of one’s home can lead to personal financial stability. For others, however, increasing home values can lead to financial instability as the costs of housing (taxes, utilities, and maintenance) also increase. As housing costs increase, residents become cost burdened and must seek more affordable housing elsewhere. In many neighborhoods this has resulted in the displacement of residents, and drastic neighborhood change as existing

As of 2015, Nashville – Davidson County’s Median Family Income was $66,900.

Source: HUD Fiscal Year 2015 Income Limits.

Housing is considered affordable when a household spends less than 30 percent of their gross household income on housing.

Source: HUD

Nashvillians spend 55 percent of income on housing and transportation.

The Housing and Transportation (H + T) Affordability Index

In 2010, traffic congestion in the Nashville area cost every auto consumer $722.

Nashville consumer profile compiled by the Chamber (Nashville Datascape, 2012)

homes are upgraded or replaced with new construction. This has led to neighborhood tension and has brought the issue of housing affordability to the top of Nashville’s consciousness.

Housing is considered affordable when a household spends less than 30 percent of their gross household income on housing. When a household spends more than 30 percent of their gross income on housing, then they are considered cost burdened. From 2000 to 2010, there was a 59 percent increase in costs burdened households in Davidson County, and in 2010 over 100,000 households were found to be cost burdened.¹ When transportation costs are included, a household should not spend more than 45 percent of their gross income on housing and transportation. In Nashville, the Center for Neighborhood and Technology’s Housing and Transportation Index calculates that Nashvillians spend 50 percent of income on housing and transportation.² Cost burdened households may have more difficulty affording necessities such as food, clothing, and medical care after their rent or mortgage payment has been made.

Housing cost burden can occur at any income level; extremely low income households making 30 percent of Nashville’s Median Family Income (MFI), very low income households making 50 percent of MFI, or low income households making 80 percent of MFI. Costs burden also affects moderate income households making between 80 to 120 percent of MFI. Cost burden is most felt by those families making 80 percent or below the Media Family Income. In Nashville, 64 percent of individuals and 46 percent of four family households make less than 80 percent MFI.³

The number of cost burdened households will continue to increase as housing costs increase and incomes remain stagnant; therefore housing affordability is a significant issue for all income levels over the next 25 years.

Housing for extremely low, very low income, and homeless

Housing for extremely low and very low income families has been supported through subsidies and public housing programs designed to ensure that every person has access to safe and sanitary housing. In 2012, MDHA provided housing for more than 29,700 low income persons

through public housing, vouchers, and other programs.¹ Similarly, a number of smaller nonprofit affordable housing developers benefit from grants and incentives from MDHA, as well as the Barnes Fund—a housing trust fund, to address the needs of the very low income population.

In recent years, grants and incentives have dwindled, leaving very low income housing providers with fewer resources.² This is evident in Nashville, where public housing has a 3,000-person, closed waiting list and Section 8 has a 10,000-person closed waiting list, and grants for nonprofit affordable housing providers are becoming more competitive. If affordable housing is not available, this leaves the very low income population vulnerable to homelessness.

Situations of homelessness range from chronic homeless to displacement caused by domestic violence or mental/physical health issues. As the housing market improves, barriers to housing for these individuals and families increase. Because of such barriers, on any given night in Nashville, 3,000 to 4,000 individuals and families are homeless.³

The answer to minimizing housing barriers includes a housing-first approach, where homeless individuals are housed, and intensive case management services are provided along with stable housing. The housing-first approach provides homeless individuals and families with assistance in finding permanent housing quickly and without conditions.⁴ Providing access to affordable housing that is coupled with supportive services is a significant component of addressing the issue of homelessness in Nashville.

Housing for low to moderate income

Affordable housing is also a challenge for low income and moderate income households. Moderate income households are those making between 80 and 120 percent of MFI. While low income households may benefit from affordable housing supported by subsidies, many moderate income families

⬚ figure Figure H-11: The NashvilleNext Community Conversation on Housing Affordability and Gentrification saw over 300 attendees.

do not. This leaves a critical gap in affordable housing for a significant portion of Nashville’s population.

In Nashville, 17 percent of individuals and 19 percent of families fall within 80–120 percent of the Median Family Income threshold. Providing housing that is affordable for this income threshold is challenging. The 80–120 income population is primarily served by existing housing supply countywide. As demand for existing housing supply increases in desirable locations, fewer affordable housing options remain available in those areas. With fewer subsidies available to develop and provide new affordable housing in high demand locations, households in this income bracket are more likely to “drive until they qualify,” incurring additional transportation costs or purchasing more home than they can afford in exchange for a desirable location.

Housing affordability is a significant issue for Nashville, and remained a top priority throughout the NashvilleNext community engagement process. Affordable housing is also a critical issue for the more than 100,000 households reported as cost burdened in 2010.¹ Obtaining housing that is affordable, at any income level, leads to a higher quality of life and financial security. It also contributes to greater community stability. As Nashville plans for the next 25 years, housing affordability should be addressed not only through financial incentives and other market interventions, but also by addressing future land use decisions and where and how housing, transportation, jobs, and services are located and accessed.

Housing market demands impact on suburban communities

Housing market demand has had two effects on suburban communities—suburbanization of poverty and minority suburban migration.

Nationally and locally, demand for urban neighborhoods has increased in recent years. As a result, suburban communities have seen a market decline with falling home prices and declining retail. The Great Recession lasting from 2007–2009 accelerated these changes, and during that time, homes were foreclosed, and consumer spending slowed. As consumer spending slowed, suburban malls and retailers closed their doors, and employers followed suit, leaving behind only lower wage jobs. As home values in the urban core increased, older suburbs became an important source of lower cost housing. These changes left many suburban communities with a new “suburban poor.”

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All Nashvillians need housing that is affordable ...

In recent years, people making less than 120 percent of Nashville Median Family Income (MFI) have felt the pinch of higher housing costs. This includes seniors and veterans on fixed incomes, those in the hospitality and retail industries, teachers and public safety providers, as well as nurses and technicians in the healthcare profession. Housing is considered affordable when a household spends less than 30 percent of their gross income on housing. Housing affordability leads to economic stability for individuals, families, and our community as a whole.

81% of individuals with income make less than $56,280

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27% make less than $14,050 17% make between $14,050 - $23,450 20% make between $23,450 - $37,450 17% make between $37,450 - $56,280 19% make greater than $56,280

65% of families with income make less than $80,280

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17% make less than $24,250 10% make between $24,250 - $33,450 19% make between $33,450 - $53,500 19% make between $53,500 - $80,280 35% make greater than $80,280

Sources:

Tennessee Department of Labor and Workforce Development, Labor Market Information, June 2014. Web Access April 2 2015. https://www.jobs4tn.gov/vosnet/Default.aspx

Notes:

All data are derived from 2013 American Community Survey 1-Year Estimates for Davidson County TN and HUD FYI 2015 Income Limits. Family income limits in this case assume 1 Person (Individuals) and 4 Persons in a Family. HUD FY 2015 Nashville Median Family Income is reported at $66,900.

Taken together, the changing housing markets and preferences, loss of jobs during the recession, the shift of lower wage jobs to the suburbs, and community disinvestment are called the Suburbanization of Poverty. The suburbanization of poverty is not solely the result of residents displaced by gentrification in the urban core. It also includes existing suburban residents whose economic circumstances have shifted due to changes in the economy.

Between 2000 and 2008, toward the end of the Great Recession, suburbs in the country’s largest metro areas saw their poor population grow by 25 percent.¹ The maps on the next two pages show poverty in Davidson County in 2008–2012, as well as changes in concentrated poverty from 1970 to 2010. As suburban homeowners found themselves with mortgages for more than their houses were worth, many felt their only option was to stay put until values recover. This limits home owners’ ability to move for job opportunities because they must make up the difference or negotiate with their lender for a “short sale.” This immobility leads to housing/jobs imbalances, rising transportation costs, and higher cost burdens, all of which exacerbate suburban poverty.

Nationally, the 2010 Census and migration trends paint a more positive picture of suburban communities. The 2010 Census revealed that more than half of all minority groups in large metro areas now reside in and are finding more opportunities in the suburbs.² Similar to national trends, Nashville’s suburbs are opening up new opportunities to the regions’ New Majority. The Great Recession left a softened housing market, but created opportunity for more affordable housing for new families and individuals. As a result, schools, community organizations, and neighborhoods are becoming more diverse. As minorities find new homes in the suburbs, they are setting political firsts, such as Nashville’s first Latino Council member.³

Both nationally and locally, the new majority are choosing suburbs because in many cases the schools continue to perform better, and parks and other amenities are of higher quality than in “inner-city” locations. In addition, the New Majority is finding greater access to jobs in the suburbs

Figure H-12: Residents living in poverty

Source: American Community Survey (2008 - 2012; 5-year estimate)

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Residents in poverty by block group [ ] High-poverty tracts

[ ] Less than 10%

[ ] 10% - 20%

[ ] 20% - 30%

[ ] 30% - 50%

[ ] More than 50%

Figure H-13: Census tracts with concentrated poverty, from 1970 to 2010

Tracts with chronic high poverty had more than 30% of their residents in poverty in both 1970 and 2010. Newly poor Census tracts were not high-poverty in 1970, but were in 2010.

Source: CityObservatory.org, using U.S Census (1970, 2010)

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Figure H-14: Minority and Hispanic population, 2000 to 2010

Source: U.S Census (2000, 2010)

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Percent minority population (above)

Percent Hispanic population (below)

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as the economy improves.¹ As a result, incomes have remained stable. For example, the Antioch–Priest Lake Community (where the share of Hispanic-Latino and African American population between 2000 and 2010 grew by 214 percent and 84 percent, respectively),² per capita income rose slightly from $21,578 to $22,122 between 2010 and 2012. Nashville/Davidson County per capita income in 2012 was $28,513.³

These positive trends will no doubt continue over the next 25 years if suburban neighborhoods of the future consider more retrofitting opportunities, implementing land use decisions that consider housing demand, and optimize the relationship between housing, jobs, and transportation. In doing so, suburban communities will meet the needs of those who weathered the “Great Recession” and those who more recently have chosen to call the suburbs home.

Key Ideas Shaping this Chapter

Given the deficiencies in Nashville’s housing market—where supply is not meeting demand, where an increasing number of Nashvillians are cost-burdened, and where Nashvillians do not have access to housing that meets their needs—the Housing element includes several goals, policies, and action items to address Nashville/Davidson County’s housing needs in the future.

Creating more context sensitive supply

Declining household sizes, retiring baby boomers, and more people looking for walkable neighborhoods are all changing Nashville’s housing market. Most of Nashville’s future housing is already in existence. New homes will primarily be built by the market—property owners and developers building or adding new units for sale or rent. MDHA and nonprofit developers will also add supply targeted to very low and low income households.

Redevelopment in and close to existing neighborhoods raises many concerns. Rules that ensure new development is appropriate and compatible with its surroundings are important to maintaining quality of life for existing residents, while also accommodating new residents and changing housing preferences.

Nashville’s housing supply has traditionally provided single family and multifamily housing. In recent years, much of Nashville’s residentially zoned land has been rezoned to allow only single-family detached homes. The housing market is now introducing a significant supply of multifamily housing units in the form of mixed use development or stacked flats. This diversity of housing types reflects the market preferences of downsizing baby boomers and millennials entering the housing market; but that mix of housing has its limitations. To truly keep up with the demand, Nashville’s housing supply should look beyond single-family detached developments and mixed use or stacked flats developments and offer a wider variety of housing types.

Called missing middle housing,³⁴ these housing types include detached accessory dwelling units, alley housing, triplexes, quads, manor houses, courtyard flats, and live/work units, offering more choices between yard homes and multifamily buildings.

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Figure H-15: An alley house provides housing choice in predominately single-family neighborhoods.

Missing middle housing can achieve multiple goals in Nashville’s housing market. It can be used to create transitions—in height, scale and density—between higher density centers and corridors and single family neighborhoods. When located by prominent corridors or commercial centers, missing middle housing allows more residents near transit, services, retail, and other amenities. Finally, missing middle housing can provide new housing options and meet the market demand for smaller units with less maintenance in walkable settings.

Missing middle housing provides options that meet the needs of Nashville’s changing owners and renters. Today, the zoning code allows missing middle housing types to be built in areas with competitive land prices: along corridors and within centers. Where missing middle housing is most effective in creating transitions and housing choice is adjacent to centers and corridors; however, while land prices are more favorable, the zoning often present in these areas is restrictive. Changes to the zoning code to address transitions, contextual design, and ideal locations to permit the development of missing middle housing will aid in including this housing type in Nashville’s supply.

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Figure H-16: Missing middle housing types

Why multifamily housing and other higher density housing contributes to sense of place

With the recent economic recession in the U.S. cities of all sizes saw a change in housing demand from single family homes to smaller affordable units in multifamily buildings. Multifamily housing provides housing for young singles and families just starting out, and for baby boomers who are downsizing. After the recession, multifamily housing became an important option for those who could not afford to purchase a home.

Multifamily is development with three or more dwelling units in a single structure. A common perception by single-family homeowners is that siting higher density, multifamily developments near them will adversely affect their property values. The Metro Nashville Planning Department reviewed several case studies and researched Davidson County property values of single-family neighborhoods with adjacent multifamily developments. The review of these studies and local data suggests that the presence of nearby multifamily development does not adversely affect the value of single-family homes. This also largely is due to how well the multifamily is designed, and how well it blends with its surroundings.

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Figure H-17: Multifamily in Lenox Village provides housing options in a suburban setting.

Multifamily buildings and developments can look like high-rise apartment buildings in the Gulch to one story townhouses in Hermitage. The broad range of styles and sizes gives home buyers and renters options in prices and location.

Addressing the suburbs: making improvements to meet demand

Suburban communities developed to meet the demands of the previous generation. They can evolve to meet the needs of Nashville’s future, if the development decisions of the past are not repeated. Suburban communities in Nashville developed during a time of auto-dominance. As demand shifts to neighborhoods that are more walkable places, suburban communities can be retrofitted to make them more walkable. Enhancing suburban communities in this way will ensure that they remain an equally attractive option in the housing market.

Retrofitting suburban development¹ means identifying how older developments (such as large malls or big box stores) can be rebuilt into walkable community centers. Many of these suburban developments have reached the end of their lifespan, but have valuable assets, such as flat land with few environmental constraints, existing utilities, and proximity to major transportation routes. Sometimes, retrofitting will mean rebuilding the entire area. However, creativity can mean reusing some existing structures, adding new buildings in parking lots to create an internal, walkable street network, or adding new housing to offer a more diverse supply in the suburbs.

Suburban retrofitting can accomplish several things. Suburban retrofit development supports transit and reduces suburban residents’ reliance on the automobile, increases housing choice, and when a mixture of land uses are introduced, diversifies the local tax base.² These changes, being in line with existing and changing market preferences, can increase the desirability of suburban communities. Suburban retrofitting also means creating new places that encourage walkability and housing choice. Lenox Village in Nashville is an example of a walkable community that is located in a suburban setting. In the development, there are a variety of housing types, and goods and services located within walking distance. Housing types include missing middle homes, mixed use buildings, and single family homes, ranging from smaller lots for those downsizing to larger lots for those with growing households.

As noted in previous sections, the “suburbanization of poverty” has not occurred solely as lower-income households are displaced to the suburbs. It is also fueled by the recent recession, during which unemployment

Reverend Barnes – A Champion for Mixed Income Neighborhoods

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Figure H-18: Mayor Karl Dean and Reverend Bill Barnes at the ground-breaking for an affordable housing complex in North Nashville, part of the Barnes Fund for Affordable Housing. 2015 Metropolitan Government City of Nashville and Davidson County

A mixed-income neighborhood is defined as an area that has households from more than one category of MFI (Median Family Income). These categories are based on HUD’s six income categories: very low-income, low-income, moderate-income, high-moderate, high-income, and very high-income. Mixed-income housing is approached in two methods to deconcentrate poverty, “the dominant method is to disperse the poor throughout a metropolitan region by providing them with rental vouchers for use in privately owned housing. The other approach is to combine low-income and higher income households in the same development,” from “Mixed-Income Housing: Unanswered Questions”, a study on mixed-income housing in Cityscape: A Journal of Policy Development and Research. Both methods work to disperse the very-low income households to areas with more services and better housing quality. Mixed-income housing can be met through state and local government and/or public housing authorities’ initiatives.

Locally, Nashville has seen leadership from Reverend Bill Barnes, who has been an advocate for deconcentration of poverty and mixed income neighborhoods for more than 50 years. Reverend Barnes, who serves on the NashvilleNext Housing Resource Team, has lived in many cities and has studied the long-term effects that concentrated poverty has on its residents. Reverend Barnes and his team have been critical to the implementation of mixed-income and affordable housing, and the establishment of The Barnes Fund for Affordable Housing in 2013. The Barnes Fund is one of many initiatives that help address the need for mixed-income and affordable housing.

From “Effects from Living in Mixed-Income Communities for Low-Income Families,” an Urban Institute Report

and softening home values impacted suburban communities as well. This has created two dynamics that require attention over the next 25 years: existing suburban residents trying to recover from the Great Recession and new minority populations discovering new beginnings in the suburbs. To address the changing needs of suburban communities, employment, housing choices, and transit that connects residents to jobs throughout the county should be components of planning for Nashville’s future.

Centers in suburban communities should accommodate a mix of employment, services, higher density housing, and other “place making” amenities. This could mean altering the character of development in suburban areas, moving from a sprawling auto-centric place, to being more compact and walkable. When more people and jobs are located in suburban centers, transit services can be provided more frequently. When transit is provided more frequently, suburban residents then have another choice in getting to and from work, there is less reliance on the car, and transportation costs are reduced. This improves the quality of life and reverses the trend of suburban poverty because suburban residents can spend less on housing and transportation costs, and can afford essential goods and services.

Addressing housing affordability – moving toward equitable development and mixed income neighborhoods

Housing affordability is not just an issue for the very low income. It affects all Nashvillians. As housing becomes less affordable, longtime residents are often displaced. Low and moderate income households are excluded from desirable neighborhoods that provide access to jobs, good schools, retail, and services. This dilutes the financial and social diversity that makes many Nashville neighborhoods unique. Not being able to afford a home can limit job opportunities or opportunities to participate in civic life. Declining affordability creates challenges for economic development efforts. Potential residents may look elsewhere for housing. Housing affordability is not only a problem for the very low income; it’s a problem for all of Nashville.

The cost of new housing is mostly driven by location, land costs, construction costs, and other costs for the homeowner (mortgage, taxes, and insurance). Land costs drive the location of moderately priced housing to certain parts of the county. With the exception of public housing, housing that is deemed as more affordable is often located in areas outside of the Nashville’s urban core. Interventions in the housing market are needed to ensure that housing affordability occurs countywide, so that all parts of Nashville include homes that are affordable across different income levels.

With rising housing costs driven by the increasing demand and limited supply of in-demand housing, parts of Nashville will become more and more unaffordable. To ensure that all Nashvillians have safe, affordable housing, Nashville should take steps to ensure affordability and minimize displacement, especially in high demand neighborhoods, and find ways to remain competitive in a regional housing market.

Making Nashville’s housing market more equitable requires a four pronged approach:

» Fund It – create dedicated financial resources to subsidize equitable development, i.e. affordable housing. » Build It – create tools to incentivize the market to build affordable housing units. » Preserve It – create tools that preserve the affordable housing units in perpetuity. » Retain It – create tools that allow existing residents to remain in their homes, like tax freezes, or home maintenance programs.

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Using these tools to intervene in the housing market and create or enhance housing affordability can help maintain socioeconomic diversity. In addition, housing that is affordable becomes equitably distributed throughout the county.

Goals and policies

Goals set broad direction for the plan by applying the Guiding Principles to NashvilleNext’s seven plan elements. They identify, for each element, what NashvilleNext is trying to achieve.

Policies extend goals by providing more detail. They give more direct guidance on community decision making, without specifying which tools to use. (Identifying and adopting which tool is a job for actions and implementation.) As implementation occurs, if one particular tool is rejected by the public, the policy guidance remains.

Actions (Volume IV) are short term steps to carry out these Policies and achieve these Goals. The plan is structured so that the Action plan is updated the most frequently. During the annual update process, actions can be removed if accomplished or if they were deemed infeasible. Removing an action because it’s infeasible leaves the overarching Policy in place. During the update, the Planning Department would seek to identify alternate ways of accomplishing the policy.

Related plans

With a strong commitment to annual updates and review, the General Plan is able to play a key role in providing coordination between other agencies and plans. It helps other departments understand long term goals and how their work shapes that, even if they must focus on short term needs that are out of step with the long term plan. For example, the long term vision for transit is to build a high capacity transit network operating along major corridors, with few deviations from those corridors. In the short term, MTA needs to conduct its operations to connect to riders, who may not live along those major corridors. Eventually, MTA operations should merge with the long range vision, but it will take time to build the infrastructure and housing to support the high capacity network.

Thus, Element chapters highlight related plans when discussing NashvilleNext Goals & Policies.

Much of what Nashvillians want for the future goes beyond what Metro can achieve on its own. Partnerships with community groups, nonprofits, and the private sector are critical.

» Homelessness Commission » MDHA Consolidated Plans

H Goal 1

Nashville maintains economic and social diversity. Housing choices are affordable, available, and accessible to all new and existing Nashvillians.

H policy 1.1

Develop innovative financing programs to provide affordable housing for all Nashvillians.

H policy 1.2

Develop standards that guide the design, location, and construction of affordable housing across all neighborhoods.

H policy 1.3

Provide real transit options to lessen the cost burden, and increase housing affordability. Provide real transit options to also access affordable housing, jobs, services, and amenities.

H policy 1.4

Provide access to affordable housing and support programs for the homeless and Nashvillians with very low incomes.

H policy 1.5

Support private, public, and nonprofit housing providers so that they can provide safe and accessible affordable housing.

H Goal 2

Nashville has a strong and diverse housing market that embraces changing housing demand.

H policy 2.1

Create real housing choices in rural, suburban, and urban areas that respect the rural, suburban, and urban development patterns.

H policy 2.2

Create tools that encourage context sensitive development in Nashville’s neighborhoods. Work with developers to develop in a context sensitive manner.

H Goal 3

Reduce the negative effects of gentrification in Nashville’s growing residential markets. Ensure that residents of all incomes and both renters and owners take part in and benefit from neighborhood improvements.

H policy 3.1

Create programs that reduce displacement and exclusion within changing neighborhoods. Create programs that focus on the social, financial, and physical effects of neighborhood change.

H policy 3.2

Create more transit, public services, and employment in suburban areas to make these communities easier to live, work, and play in regardless of the residents’ income.

H Goal 4

Nashville’s neighborhoods have strong community networks that include residents and supportive organizations and services. The way the neighborhood is built—with homes, parks, streets, and services—promotes real access and social interaction.

H policy 4.1

Create strong neighborhoods by enhancing existing neighborhood programs and public processes. Empower more residents to take part in policy and decision making.

H policy 4.2

Strengthen neighborhoods by making them safe and easy to get to and around. Pay special attention to safety and access for Nashvillians who are within special needs populations, including the disabled, elderly, veterans, or have very low incomes.

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