When we talk about affordable housing, the conversation often centers around new construction. Building more homes is necessary to meet the high demand in our growing city. However, the solution to affordable housing extends beyond just new builds. It requires creative thinking and collaborative efforts between private and government entities to develop effective strategies.
In Nashville, one successful initiative addressing affordable housing is the Barnes Housing Fund. Established in 2013 by then-Mayor Karl Dean and the Metro Council, the Barnes Fund has invested over $108 million in affordable housing development, leveraging more than $1 billion in federal and private funding. This investment has resulted in the construction of over 4,700 housing units. Despite this success, a city-commissioned report in 2021 estimated that Nashville needs 18,000 additional units by 2030 for households earning less than 80% of the area median income.
To meet this growing need, the Barnes Fund alone isn't enough. Enter the Nashville Catalyst Fund, a joint effort between Metro and the Community Foundation of Middle Tennessee. The Catalyst Fund aims to preserve existing affordable housing units, adding another critical layer to Nashville's housing strategy.
Businessman Jim Gingrich, who chairs the fund, is committed to stopping the loss of attainable housing units due to property sales, razing buildings, tenant evictions, or unaffordable rent increases. This disruption forces residents to move further from their jobs, impacting employers, worsening traffic, and affecting public health and school performance.
The Nashville Catalyst Fund starts with $50 million from three sources: $19.5 million in federal Covid-19 relief aid allocated by Metro Council, $5 million from Vanderbilt University, and a $25 million line of credit from First Horizon Bank. With a goal of $90 million, the fund will provide short-term loans at below-market interest rates to developers, enabling them to act quickly in the fast-paced Nashville market. Gingrich expects the fund could preserve 3,000 units in a decade.
The Catalyst Fund's strategy is to offer speed and flexibility that traditional government processes lack. Short-term loans will be repaid, replenishing the fund and allowing for more deals over time. This approach is not only faster but also more cost-effective than building new housing.
Affordable housing is a top concern for Nashville residents, and the Catalyst Fund is a significant step forward. With local government, private investors, and organizations like the Community Foundation of Middle Tennessee working together, the dream of homeownership is within reach for many.
For those seeking available attainable housing resources in the Greater Nashville area, there are a number of organizations working to assist in this space. For more information visit Greater Nashville Realtors Housing Resources.
