Anew residential subdivision taking shape at the old Standard-Coosa-Thatcher mills in East Chattanooga will include 50 apartments developed by Chattanooga Neighborhood Enterprise over the next couple of years to help provide more affordable housing for moderate-income families.

The nonprofit developer won final approval Monday for property tax breaks on new apartment buildings it plans to build in the Mill Town complex.

By a 6-1 vote, the Chattanooga Health, Educational and Housing Facility Board approved property tax breaks over the next 20 years to help hold down the project costs and rents for both a 34-unit apartment building at 2461 E. 18th St. and a 16-unit complex planned at 1805 Lyerly St.

The projects are among about 1,000 townhomes and apartments planned to be built during the next five years on the nearly 40-acre Mill Town development.

“We so believe in making sure that affordable housing is happening in our city that we’re giving them the land in our development to make sure that this happens,” Ethan Collier, president of Collier Construction Co. and the developer of Mill Town, said in a telephone interview Monday. “Working-class families desperately need options, and our biggest priority at Mill Town has been to create a socially, economically and racially mixed community.

We can’t do that if we’re not having real conversations about what it looks like for a developer to make sure that affordable housing is a part of any development.”

Jake Toner, development

consultant with Chattanooga Neighborhood Enterprise, said rents in the new apartments will vary from $633 to $1,800 a month and include one-, two- and threebedroom units with most leased to families making 80% or less of the median income in Chattanooga. Toner told the city board Monday that exempting all but the school portion of property taxes on the new housing projects will make them pan out.

“These projects would not be financially viable without this,” Toner said of the tax break.

During a public hearing Monday, members of the city Health, Educational and Housing Facility board said the new apartments will still be priced too high for those making minimum wage and in other lowpaying jobs in Chattanooga.

“There are going to be a lot of people who can’t afford these rents,” board member Johnika Everhart said before casting the lone vote against granting the property tax breaks. “I appreciate the work that you are doing, but I have a heart for those who are indigent and don’t have the resources to pay even these rents.”

Brian Erwin, a local real estate agent and another member of the city board, voted in favor of the request, but he called the proposed rents for the new apartments “rather high” and the 20-year partial property tax exemption “rather generous.”

Martina Guilfoil, executive director of Chattanooga Neighborhood Enterprise, said the group works to keep rents as low as possible but rising costs for building materials, labor and utilities have pushed up costs and federal housing aid has been inadequate to meet the needs in Chattanooga. Unlike the 84-unit apartment complex the group is now building on Bailey Avenue, the Mill Town projects will not be eligible for Chattanooga Housing Authority vouchers for low-income families because such funds have run out, Guilfoil said.

“Chattanooga needs more housing assistance money,” Guilfoil told the board Monday.

The nonprofit projects in the Mill Town area are being aided by more than $1.9 million of federal Housing and Urban Development grants to the city of Chattanooga designed to create affordable housing for lowincome households. According to information given to the city, the Lyndhurst and Benwood foundations are also helping support the two new apartment complexes projected to cost a total of nearly $10 million to develop and build, including the value of the donated land from the Mill Town developers.

The Lyerly apartments will include three buildings with 10 one-bedroom, four two-bedroom and two threebedroom units. The other Mill Town apartments on 18th Street will have four buildings with 18 one-bedroom and 16 twobedroom apartments, according to the developer.

The development will be the first targeted units for low- or moderate-income families in Mill Town, but Collier said he hopes to have more as the project is built out.

Collier said the first phase of Mill Town with 80 marketrate rental and owner-occupied units is now complete and fully occupied and the next phase of Mill Town should add another 150 townhomes and detached housing units this year.

By this summer, Collier said, work will begin on converting part of the vacant former Coosa mill into 23 residential condominiums. The one-, two- and three-bedroom units will each be built on a single floor with elevator access, and most of the units will be priced just more than $400,000, Collier said.

“This will be our first redevelopment in the mill building, but we’re eager to bring a mix of commercial and housing development to serve the Mill Town community,” he said.

Collier, who also serves as chair of the Chattanooga/Hamilton County Regional Planning Commission, said Chattanooga still has an undersupply of housing, especially in the downtown area.

“So far, Mill Town has been exceeding our expectations in the pace of how units are both leasing and selling,” he said.