The worst of the housing market has been left behind in 2023, according to Greater Nashville Realtors president Kevin Wilson.
“When the [Federal Reserve] gave a nod to the idea that perhaps they might lower interest rates, not once but up to three times in 2024, that has opened up a lot of buyer confidence,” says Wilson. “But it’s also loosened up the lending environment, where just based on that anticipation of lower interest rates from the Fed has given us lower interest rates now for buyers.”
He references a recent National Association of Realtors study that named Nashville as the No. 7 metro area in the country for pent-up buyer demand. The metric is based on the amount of current residents who are getting ready to buy as the market shifts, not to mention the continued growth of the whole region, with people moving to areas along Gallatin, Charlotte and Murfreesboro pikes. Wilson stresses that potential transit-oriented developments could be key in those areas.
“This is such a huge opportunity for the city to make smart growth choices and be able to provide those units that we continue to talk about that is such a need for our city right now — to have attainable and affordable housing,” Wilson says.
Eugene Spencer, director of MDHA's Resident Services Department
If you ask just about any development stakeholder, the hundreds of acres along the Cumberland River known as the East Bank have the most opportunity for affordable housing in Nashville’s history. A report from Mayor Freddie O’Connell’s growth-focused transition committee noted that “locating a diversity of affordable housing in the East Bank should continue to be a priority.” But the group didn’t focus on the potential of that area alone.
“The O’Connell Administration should accelerate efforts to do the same for other underutilized land and buildings throughout the city,” the report states. “Specifically, it should support and advance ongoing efforts to identify Metro-owned property that would be suitable for affordable housing.”
O’Connell’s deputy communications director Alex Apple says the mayor’s office is waiting on a “unified strategy” from the Metro Planning Department’s new Housing Division, which is focused on accelerating affordable housing. He also says the administration is in progress on recommendations from the Affordable Housing Task Force report and touts the Metropolitan Development and Housing Agency’s work to redevelop Cayce Place in East Nashville.
The director of MDHA's new Resident Services Department on challenges and opportunities within Nashville’s public housing community
“Progress requires a public-private effort, and Metro can take a lead role,” Apple says on behalf of the mayor’s office. “Metro government and housing developers are responding to this challenge by creating and retaining affordable housing. We’ve continued to build new tools like a mixed-income payment in lieu of taxes (PILOT) model.”
Apple highlights the Barnes Housing Trust Fund portfolio, which now has more than $100 million and has created almost 4,500 units with nonprofit partners. Nonprofit affordable housing developer Urban Housing Solutions has created 935 of those units.
“The recipe for success for us really requires partnerships, and it’s mostly public-sector partnership and sponsorship for deeper affordability,” says Brent Elrod, managing director of planning and development for Urban Housing Solutions. “Increasingly, that public-sector support is necessary even just for basic feasibility, just because the costs are so high now and competition is fierce.”
Elrod says more for-profit developers are considering how affordable housing can be a part of their business model, and larger companies that develop workforce housing have started to move into the area. At the same time, he says more of the local philanthropic community has begun to put resources toward nonprofits doing affordable housing development.
“I think I’m feeling more optimistic about how the end of 2024 will look for our capacity as a community to be able to finance affordable housing,” Elrod says.
From housing and transportation to development of the East Bank, here are 11 stories to keep an eye on this year
