Metro Nashville will have more money than ever this year in its Barnes Fund for affordable housing. And the jump — from about $1 million to more than $5 million — has officials reevaluating how the money can best be spent.
On Wednesday, the Metro Housing Trust Fund Commission, which oversees the money, voted to stop taking new grant applications while it adjusts its rules and waits for the increased funding to arrive.
Since its creation in 2013,
the trust fund has given out about $5 million for housing construction and rehabilitation projects. Per the fund’s rules, homes built with the money must be sold below market rate or rented at low cost to families that typically earn no more than 80 percent of the area median income — and sometimes much less.
Pausing the grant cycle wasn’t an easy decision.
It follows
shortly after the Metro Council indefinitely postponed a vote on new, highly anticipated affordable housing policies. And while the Barnes Fund has backed nearly 100 units, only
about half have been built so far.
One reason for the delay: the city took
the unprecedented step of donating more than a dozen Metro properties to non-profit developers (so that they received cash grants and land).
The legal steps involved in the land giveaways — and in writing deeds that keep the properties affordable for 20 years — had to be created “from scratch,” Metro attorney Mark Murray told the commission. That process is nearly complete and could get final Metro Council approval in March.
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Barnes Fund officials say they’ll be able to do more good — and make sure they’re helping the right people — by waiting until this summer to give out more grants. That’s when they expect the sale of Metro’s old convention center to be finalized. That deal includes more than $5 million for the trust fund.
In the meantime, the fund will streamline an application process widely considered complicated and confusing and adjust the scoring system that decides which projects are awarded money.
Those changes, while nuanced, are more pressing than ever as interest in the Barnes Fund grows, luring more non-profit developers to apply for aid. In the last funding round, only three of 11 agencies got money.
“It was very competitive. And I think it will continue to be,” said Adriane Bond Harris, the senior advisor on affordable housing in Mayor Megan Barry’s office. “So that’s why it’s up to the commission to kind of come up with some processes and procedures that will ultimately help.”
Loan Fund Could Be New Tool
An outside consultant
recommended putting even more money in the Barnes Fund — well beyond the $5 million arriving this year.
Such a sum could allow the trust fund to try a new tool: a loan fund. Typically, a loan fund helps secure below-market interest rates. Such a subsidy could entice developers to take on affordable housing projects.
The loan fund discussion is in early stages.
Housing officials also say they’ll evaluate other broader goals of the Barnes Fund.
There are questions of whether for-profit developers should become eligible for grants, and whether the current rules about income levels for those being aided by the fund make sense.
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