Planning Commission - Regular Meeting

Have the floor.

Chair Toombs. Is that good? Mhmm. Thank you so much for having the planning department here. It's a pleasure to be before you. Vice mayor and the mayor's office as well. We're we're grateful to your for your support. To my left, I've got Angie Hubbard who is director of the housing team. And then to the right, I have George Rooker who heads up our operations program at Planning. And I wanna acknowledge Lisa Milligan, deputy director, Brett Withers, council liaison, and Randy Semrick, who heads up our HR and other programs and generally keeps us in line.

But I'm really happy to be here to talk about our FY27 budget. Maybe? I'll just say the Planning Department has had a good year in 2026. Do you want me to wait or We need some of the music, game show music. Oh, there we go.

Okay. George does not handle the IT at the department. Okay. So today, I'm gonna talk a little bit about the department, its organization, what we've been up to in 2026 with a real focus on our housing program, which includes the bulk of our budget needs, and then provide a glimpse looking forward. I know that is sort of probably too small to read on screen, but we did have a organizational chart and some of your materials.

And so just to talk a little bit about our structure, we've been working with your support council and with the mayor's office's support over the last five to ten years to really expand and broaden the department's reach and my goal is to have a department that is planning at every scale. I think that's a sign of a healthy planning department from site plan all the way to sector neighborhood planning and longer range planning. I think the only thing we're leaving on the table right now is regional planning, which we could probably do a better job of with our regional partners in Middle Tennessee. But over the last five to ten years, we've really focused on broadening our reach on the left side. You see we've got long range planning.

We have data analytics. We have a program management office and we have a community plans function there. We are so pleased to welcome the historic zoning team to planning. They have really been an enriching part of the department over the last year which I'll talk a little bit more about. Land development is a team that this body knows really well.

They sit over at the table here. Every two weeks when you are in session talking about zoned change cases and they review subdivisions. And then we have our housing team, which Angie will talk about in a little bit more detail and our operations program as well. And then lastly, I wanna acknowledge our design studio, which is a really interesting sort of interdisciplinary team of landscape architects, architects, urban designers, and planners. And they tackle a range of projects with sort of a design oriented focus.

And so just to highlight some of our successes, land development is a really hard working team as I mentioned. That's probably the group that you have the closest interaction with. They reviewed about 4,000 applications and inspections throughout the county, and they have a really deep working knowledge of the city and sort of our expert in working with other departments to review proposals. Design studio, as I mentioned, this is a team that really hones in on hard design problems. They were the front face of our work on 2nd Avenue following the bombing and gave a lot of really good guidance about the evolution of that neighborhood.

And I'm I'm really proud of how we as a city have been able to sort of come out of a really difficult moment for us and chart a a new future. If you haven't been down to 2nd Avenue and some of the new investments there, I hope you'll go and check it out. It's still a work in progress, but I think we've we've made a lot of a really good progress as a city. Historic zoning, I mentioned it has been a real pleasure to invite them into the department over the last year. We have a planning roundtable meeting every Tuesday where all of the disciplines in the department come together and we talk about tough cases.

Hopefully, we argue and debate outcomes, and they have been a really critical and interesting perspective. And I think it has been really fun to have them there on hand sort of talking through, you know, core issues and I think really challenging some of the ways that we're thinking about preservation especially in high growth areas. So, the long range planning team, they do a huge sort of range of activities from corridor studies where they work with NDOT and Chime to sort of work in communities. We've been working and have just completed a community plan update in Cambridge, which I think has a really interesting mix of sort of natural assets, but also other community dynamics that have been really fun and interesting for the department to work on. And the program management team, when we have and need expertise, it's a little bit out of outside of something that we have in the department.

We'll be able to work with economists and others and the like who can bring an important perspective to our work. And so again, for me, this is really about scaling up and being able to execute on a variety of different scales in the department. And then our advanced planning and research, many of you know Greg and his team. They know all of the data sources for understanding sort of what's happening in the city. He works on the census.

He prepares the capital improvements program for your consideration and does a lot of really excellent work with other departments to help us understand the scope of of needs that we have as a city. A new program within the department is the special projects team. And here I would say, you know, we are in a learning mode. We have heard from this body for for many years that you want us to be thinking more critically about how to use Metro owned land. And so we have been partnering with general services and other departments as well to understand sort of the the best work that we can have for thinking about Metro land today, what our needs are.

We're considering internal facing operational needs such as the fire headquarters, but also housing. This team helped to progress design development of the fire station headquarters as just an example. So this has been a really, I think, important lens for us to start to think about stewarding our assets as a city a little bit differently. And we're just getting started. So this is a new program and I've been really pleased with their work progress so far.

Before handing it over to Angie to talk about the housing division, just reflect and look at the different sections in the department. There are some here that we have had for probably many, many decades, like the land development section. But the housing team joined us four years ago with a staff of two from the mayor's office. And under Angie's leadership, I think they have really begun to scale up and think about what a sound housing policy looks like for a city of our size, our complexity, and our needs. But I wanna acknowledge that the program is still new.

It's four years old and they now have staff with the support of this council and the mayor's office and others to really start to think about what a great program looks like. And I think Angie has done a really outstanding job building that out thus far. So with that, I'll hand it over to you.

Thank you, Director. And before I begin, I did wanna thank the administration council. In these four years, you've really trusted us with a lot of resources that helped us really scale. I want to specifically thank Director Reed and her team with Metro Finance for being very intentional this fiscal year or this calendar year over the past many months of understanding how affordable housing is financed, all the complexities around it to really help us understand what the need is and how Metro can support that. So, with that, just remind everyone, this time last year, we we released the first ever unified housing strategy for the city that set forth our roadmap for the next ten years on addressing our housing challenges.

And that the initial iteration of this was very metro heavy and we are evolving to how we bring in that corporate and philanthropic participation because metro can only be really a small percent based on this need that we have which is to create 20,000 new affordable income restricted units by 2035 that are affordable to households at or below 60% of our area median income. And we built seven strategies around the themes and the needs that were identified. And just to remind everyone what these strategies are is to align our housing ecosystem for a city our size with the complexity of our need. And we have so many wonderful groups and advocates and developers and nonprofit organizations in our city that are meeting and talking and doing their own research. We all want to be in the boat rowing together and have some of the sophisticated tools that we deserve and our residents deserve.

I'm just excited of all the momentum we have and that really aligning that and bringing everyone together is a really top priority, fortifying fortifying our funding sources and resources, building new housing, we have to increase that supply, supporting homeownership opportunities, increasing supportive housing opportunities, and this is really geared intentionally towards persons experiencing homelessness, preserve our existing homes and improving access and stability. So the first year, we focused on laying that foundation where we launched the UHS with an aligned budget and that aligned budget is with the resources that both MDHA and OHS also utilized to advance the strategies in our UHS of around 45,700,000. And that really focused on building that internal capacity, our systems and our partnerships, and building that strength with our existing programs. This year we're focused on with significant new investments that we are very grateful for, scaling the tools that we have and introducing new tools that I'll cover in just a little bit, but also deepening the impact by targeting greater affordability and longer affordable affordability terms that meet the residents need and that achieve that housing stability. So, we've spent a lot of time working on that.

This was the aligned budget from FY twenty six. That was a little over $45,000,000 And then if we can go to the next slide, George, our request this year, and we have different icons showing you the up arrow is increased in funding over last fiscal year. The asterisk is new programs. And if there's an A that represents programs that were funded by the American Rescue Plan Act that we requested to come into the operating budget. We're showing some of OHS's budgets, which I believe you heard from them earlier this week.

So for the rest of the presentation, I'm gonna focus on the housing division specific planning department request. Starting with our largest, which is the Barnes Fund, and George, actually I'm gonna ask you to skip a slide and I'll come back to this one, if you could go to the next one. I wanna pause for a minute and talk about why it's so hard to create affordable housing and why it takes a long time. A typical question I get during budget season is we see money with the Barnes Fund still in our funds and why how quickly is this being spent? So, if you look to the graphic on market rate housing capital stack, it's easy because of the rents for a market rate developer to get a loan to meet the cost between the equity they can bring to the table and what the cost of construction is.

I want everyone to know the cost of land is the same. Whether you're building affordable housing or market rate housing, the construction materials are the same. The only thing that starts getting a little different are the finishes on the interior. So, we're talking about comparable cost. Then, if you look over at the affordable housing capital stack, the white funding gap is the differential between what debt an affordable housing development can maintain, which means how much can they borrow from a lender and pay that back because the rents that they're charging are restricted.

That gap is filled five, six actually, Habitat said one of their subdivisions, had 99 different sources to close their capital gap. A lot of these are based on application timelines. They just can't go to a bank, funding decisions, and that's why it takes a bit of time for affordable housing developers to put their capital stocks together and to break ground. This is the most complex and hardest type of housing to finance. I wanted to lay that groundwork because also to make these deals work, we need different tools for different affordability levels, different populations that we need to serve.

So there's not one program or tool that fits all, and this is why we are continually talking about expanding our toolkit. So George, if you could go back to the Barnes Fund, please. So the Barnes Fund is our largest and most proven tool. And in FY26, we had the 16,000,000 that we have our open funding round. We took a lot of time this past fall and winter working with the Housing Trust Fund Commission and with grantees and stakeholders to incorporate the policies from the Unified Housing Strategy.

While the Barnes Fund has been really a great tool, it hasn't been as intentional about achieving any long term affordability beyond the mandatory thirty years or achieving deeper affordability for the households at or below 30% of our area median income or permanent supportive housing. So, we worked a lot, got a lot of feedback on how we can adapt these grant policies to where we can achieve the policy goals of the Unified Housing Strategy. This year, with a funding request of 22,000,000, we are expecting to be able to add about four fifty to 500 affordable homes to our pipeline. So George, if you could go to the next slide after this one. This is what the progress of the Barnes Fund is today.

This shows up in different ways on our housing dashboard, but we've started sharing this with the Housing Trust Fund Commission. So that you have some context, sixty two percent of the funds awarded have been awarded since the Housing Division was created in 2020 in the past four years. So of $191,000,000 of projects awarded, 118,000,000 of those have been in the past four years. We've awarded 131 contracts, of that 63% are already completed. You can see that through these awards, we have funded over 6,500 units.

This is both rental homeownership and owner occupied rehab. The per unit cost for Barnes Fund grants in its totality is a little over $18,000 per unit. That's a pretty good return on Metro's investment. But if you look on over, we've leveraged $1,600,000,000 in other funds. That's an eight to one leverage.

And then you can also see we're not just adding income restricted housing units. Some of these are mixed income and we've put about a little over a thousand of those into the pipeline through the Barnes Fund. This is a map of council districts to show you the distribution of the Barnes Fund awards for rental and home ownership. So, we have had some diverse awards throughout the county. We don't have the rental, I mean, the homeowner rehab shown because those are individual homes and we're protecting the privacy of the owners.

But you can see the distribution here. This also, it lives on our housing dashboard and with an interactive map that any council member or member of the public can investigate. Next is the introduction of a new tool. This is a subordinate loan program. For the past six to eight months, we've been working with the finance department and then more recently with Forsyth Street Advisors.

On the analysis of our tools, what's missing? And this is when we've heard about that we don't have a long term debt product that an affordable housing developer that could pay some debt like a light tech, a low income housing tax credit. This also serves as the next step in evolving our ecosystem through and lead us to a a durable bond issuance where we can really get that sophisticated level of housing tools and create that infrastructure around the delivery of that. Next is reauthorization of the Mixed Income Payment in lieu of tax program. This was paused last year so that we had some time to reevaluate its performance.

It was initially structured as a flat tiered program that we found was not responsive to market conditions. So, we worked with some modeling. Again, working with stakeholders to see what would be realistic and have proposed an abatement cap of 2,000,000 where it was 3,000,000 in the past but we believe that we can achieve four to four a little over 400 units a year through the $2,000,000 cap. The abatements for the program, for the projects we've issued pilot agreements for already about 356,000 of revenue that Metro has not received through those tax abatements. Next slide.

We want to pause and celebrate though the first mixed income pilot project that we awarded actually won a couple of national awards to the Urban Land Institute. So, we're very excited. This was on the tour from the ULI Conference that was here last week but this has been showcased nationally. So, our projects that we fund are best practices nationally and so we're excited to celebrate that. Another new tool that we are proposing to introduce would be a payment in lieu of tax program for permanent supportive housing.

This would be a targeted incentive to provide tax abatements for projects that are truly serving PSH to account for that rent loss that comes with the operating expenses and the supportive services that are required to make these projects work. I showed you how difficult it was for a regular affordable housing project to get financed when you add permanent supportive housing to it. It is by far the hardest to achieve. There is a state law that was passed a session ago prior to the one that ended that allowed some tax abatements for projects serving homeless veterans. We would look to see how that could be applied here or expanded and have this tool on the standby for when we implement the permanent supportive housing strategic plan that we're soon to launch.

So in addition to creating supply, we must make sure our residents have stable housing. There we go. First is anti displacement. This initiative, this is carrying from last year. We've started a conversation with Rebuilding Together Nashville. In the fall, they announced a partnership with Environmental Court to assist homeowners who have unfortunately landed in Environmental Court. They don't have the means to make the repairs. This is a natural partnership to be able to step in with funding to help those homeowners be able to stay in their homes, specifically targeting older homeowners. Eviction Right to Council. This has been a program that has been funded through American Rescue Plan Act funds.

On your agenda for next week, we've has been introduced legislation to move that program under the housing division. It the contracts have typically been managed by the finance department. This is very much in line with the unified housing strategy but it also helps us work with the providers of this program to to make more informed policy decisions so that we can see what properties are resulting in evictions and start to implement some more policy decision, better policy decisions, particularly if these are metro funded projects. Home sharing is another program that was funded by the American Rescue Plan Act, and this is a small amount of money that we're looking to scale this program for another year so it can get at a level of sustainable funding through fees or through fundraising. But this matches homeowners who have places to rent with people looking for housing through a platform that vets both the owners, the potential residents, has all of the lease information, really manages all of that for the homeowner, and this creates passive income for older adults.

That's really what this project was set up to do. We've had four matches this first year, which is typical when you see a new program launch like this in other markets. And then in the subsequent year, once it's out, it's trusted, People start talking about it, then you see this scale up. So, that's the purpose of this request for FY '27. Moving into strategic housing initiatives is a continuation of our financial consulting services.

We had requested last year funding to do the next level of engagement to analyze the existing tools that we have. The UHS really lifted up that while we're making good strides with investments that we have, we need to have greater fidelity and understanding the various levers. Projects we've funded have multiple different metro incentives in them. They could have a pilot, they could have a Barnes fund, and now they may even have a Catalyst fund. These are the right levers to pull.

So they're analyzing that for us. Also, what gaps that we may have in our ecosystem and in our market, what we're not funding well that we need to be funding. And then also take that information and work with stakeholders and national experts on other models that can get us to that really sophisticated level of having projects that have that public ownership with the permanent affordability, resident empowerment, strong tenant rights that we've heard a lot about that are being introduced in other cities that we don't have here yet. So, we're excited to take this information, move that forward in that analysis, and work with stakeholders. And then, again, another project we're moving forward is the permanent supportive housing strategic plan.

This past year, our team worked with a working group that had representatives from the Office of Homeless Services, MDHA, one of our UHS ambassadors, Will Conley from the contributor, Lizzie Goddard, who was on the HPC to scope this in a way that can really get us with a permanent supportive housing plan that identifies all of the resources that we need and the different avenues achieve those. We're looking to bring the contract to council in the coming, hopefully, by next month and then, launch that with deep engagement with the providers, operators, and and more importantly, persons with lived experience. And then finally, no, I don't think this is finally, but next, this is staffing and technology supports. With this, last fiscal year, we had three new positions that we have filled all at but one that we're recruiting a senior program manager. I'm not going to sugarcoat.

I'm very picky about filling this role. This is a leadership position on the team and we're looking for the super strong candidate in this space. And we're excited on top candidates that we have coming in. For this fiscal year, we are focused on moving to a full grants management platform. We've had a temporary solution George, if you'll switch slides.

We had a temporary solution for this Barnes Fund round, but we have a large portfolio that you've heard us talk about. So we wanna make sure all of that's automated and feeds into our dashboard seamlessly. And then finally, with other initiatives, I think some of you have heard us talk about the land banks. Our staff person who is managing this project has participated in a year long mentorship with a national organization and has also convened a statewide coalition. There's many lessons learned that we found out from land banks that have tried to start in Tennessee, so we've taken our time to understand what those challenges are so we don't repeat those.

And at the same time, we're building out the portfolio of tax for closed property, already conducting that initial due diligence to identify what's truly developable, not just does it meet minimum lot size requirements and have egress and ingress but what are the topo challenges? Are there easements required? Is there utility and utilities already at the site so that when we make these properties available through the land bank that we've already done that work for the nonprofits. So, that is coming to you very soon and then, Lucy has already mentioned the infill development strategy. We're excited about the work the Department of General Service is doing to they've engaged JLL to evaluate metro properties looking at those how they were acquired.

Are there any restrictions on them? Are they developable? And then as they're identifying or we're identifying parcels for housing, they'll be released through a competitive process and proposals will be ranked on how well they achieve affordability and housing policy goals. And then last, you can scan this QR code and find all of this information on our website, including our housing dashboard. And in July, late July or by early August, we'll have the dashboard reconfigured with our UHS updates, performance metrics, and then more build out of the Barnes Fund data. Lucy, I'll turn it back over to

you. Everhip with the with QR code. I just I want to restate again. I I feel like the housing team has sort of a pioneering spirit. I mean, to acknowledge how hard it is but also the privilege of establishing a metro program, growing it, scaling it.

I still think of it as very much a work in progress. You've made a ton of progress over the last four years, but you've set out an ambitious vision doing so from within a metro department, I think is a unique challenge but also a lot of opportunities because we've had a lot of support. But I do want to acknowledge that it's a young program but you've you've done an enormous amount in the last four years. So with that, we welcome your questions and and look forward to discussion today.

Vice Chair Spain.

Thank you, madam chair. Thank

you all for

being here. So, if I if I understood one of your slides correctly, the the increase of the $24,000,000 for the eviction right to council, that's not so much an increase as it is moving it at the existing level from ARPA funding to to the general fund. Is that right?

Correct.

Okay. 7,000,000 subordinate debt fund. Can you talk a little bit more about how that works? And also, what what does that number represent? Is that kind of based on expected usage of the program or is that a a toe in the water? What what where are we with that?

That is the amount is where we were where we landed with our our overall budget request. The it evolved from the initial analysis from Forsyth Street Advisors on what tool is missing that not only we need in our ecosystem which is we've heard repeatedly from the affordable housing development community that there isn't a long term debt product that is catalyst fund is short term. This would be a longer term that could support projects that could cash flow. Those are typically high performing low income housing tax credit projects. But we didn't want just a new tool that didn't evolve into something that was much bigger and sophisticated.

So this is where Forsyth Street recommended this initial program to begin the work around what kind of entity should we have that could deliver this as well as then get the bond markets comfortable if we proceeded with a bond issuance and build that infrastructure so that we can have the next level of investments which are which are these longer term publicly owned or how we can do public private partnerships at a scale that can deliver long term and that's well beyond thirty years or permanent affordability and meeting the policy goals that give tenants that long term stability. We haven't yet we're still working on the details of what the loan requirements are, the underwriting criteria, all of that, and we'll be engaging stakeholders and foresight's working on that and looking at national best practices. We've also engaged them to develop our underwriting criteria.

Do you have any expectation of how long that takes to sort of to stand up this program once the budget goes into effect?

We are expecting to have the these these recommendations by end of summer. One

more, the the much discussed infrastructure study.

Where where are we on that? Thank

you. So, the resolution asked the department to work with five infrastructure departments and so we're working with each one of them. If you were here yesterday and heard Director Potter's feedback to that question, I think it will capture some of the complexities that we're we're working through. Each of the infrastructure departments measure capacity a little bit differently according to best practices within their own area. And you also asked or the body also asked how does development pay for those?

And under each of those infrastructure questions, whether it be water, sewer, storm water, fire, schools, what have you. The answer is a little bit different and so we're working through that but if you want an update, we provided the Planning Commission at a public hearing last week. I can send it to you and you'll see some of the preliminary sort of research and and information and sort of the direction that we're going in. So, I'm looking forward to submitting that information to council. It is a really complex set of questions as we've gotten to it.

I'm sure it is. I look forward to seeing the update. Thank you. Thank you, madam chair.

Am I on? Thank you.

Yes, you are.

Sorry. Okay, thanks. I want to go back to the bond question. So, on that 7,000,000, I mean, do you anticipate or do you know at this point like, is that going to include like operating expenses for that as well or is that kind of tied to or or do you have any idea like what the amount of issuance could be from that funding support?

So, the 7,000,000 is from the operating budget from the bond, we, I don't know and I will actually defer to legal or director read on what what things we can pay for depending on what bond is it, type of bond is issued also. I think previous conversations was, is there a path and now, we know there's a path. It's what is that them putting that pathway together.

Okay and then on that, you know, I guess that my understanding maybe is that this would be part of MDHA eventually like for issuance purposes or is that like a TBD thing? I'm thinking about like when Chair Toombs and Council Member Gamble and I went to Atlanta and we heard about the Atlanta Development Corporation and their effort. Do we envision it being an MDHA thing or like will we potentially be looking at like a sub authority to drive like that process? And of course, my concern is evictions because there is such a huge evictor that I don't I would feel concerned that they would struggle with adaptation to a new model.

Thank you. The models we've looked at and then before we finalize anything, we'll bring in the national experts in this space to identify that. But the models we have seen use a public housing authority to create a subsidiary because of their powers under state law and the things that they can do. We are supportive of a subsidiary that has a separate board and that is comprised to where maybe Metro's interests are well represented in that. But we would also We are committing to the outcomes that we all want to achieve with that long term affordability, the tenant protections, the resident empowerment.

So whatever we look to create would be wherever that lands, but it would be based on the the powers that we need that subsidiary to have to be able to deliver at scale and that's why in other places, you've seen this through a housing authority.

Okay and that makes sense and I guess, you know, as long as long as we can ensure that, you know, residents will be protected. I think that's the ultimate goal and we don't have any connection to MDHA other than who we're appointing, you know, to the authority at the council level and so that would be my number one question as we move forward with that and then on the I guess going back to the land conversation with Metro owned land, I know this takes a very long time, but why are we It feels like we are working on it and it's part of like the overall picture. But man, we have been talking about this about Metro property since I was on HPC last term. And so it's like five years later and we're still like very tiny, it feels like increments to get there. And so, do we feel good about like where we're headed on the property conversation because it just feels like it's taking a long time and how can we how can we supercharge it?

Is there a magic bullet to supercharge it? I would I would love to give Don Soper with the Department of General Services a lot

of credit for she is she stepped into a role, I think, last year and is really taking this on in full force. And she fully understands the need and the interest around this, not just for the housing, but also Metro has its own facility needs. So she time is of the essence with her and everyone that's looking at this.

Council Member Cortez.

Thank you, chair. This goes back to the the housing bond. Is there a plan to issue bonds in fiscal year twenty seven or is there even a path to do it at this stage?

I would like to defer to the Department of Finance to answer the plans because they need to be the ones that make that ultimate decision. Director Reed.

Hello, Director Reed, Metro Finance. Right now, there is no bond. So, I wanna be clear about the 7,000,000. The $7,000,000 is a general fund appropriation that will most likely be administered by MDHA. They would set up underwriting requirements as well.

And this would be what we would call a subordinate debt product for developers to go out and help build affordable housing. So when you're a developer, for example, or a nonprofit, and you're trying to build affordable housing, you have to put together a capital stack. And your capital stack will be multiple funding sources to actually build all affordable. Sometimes your capital stack may be as many as ten, twelve, 15 different funding sources to build all affordable. This $7,000,000 would be a product and be included somewhere in a capital stack to build all affordable units.

So I wanna be clear, this is not a bond. This is what the money would act like is a revolver. So you would loan the money out. It would be a subordinate debt product. And then eventually the money will come back and it will kind of revolve is the idea. This is a pilot. Pilot project. Okay? So what we're trying to do is test the market to see what the need is for subordinate debt, understand the market conditions, kind of gain an assessment of how this product would work in a more full scale model. We are looking at the possibility of doing financing for some type of bond.

That is all we're kicking off that work and looking in-depth at doing that work. But as we sit right now, there is not I don't have a bond. We are working a path forward to actually do affordable housing. I know a lot of people talk about Atlanta model and the Chattanooga model and the like. So we are aware of those models, but we are putting together our financing plan and we will be back to counsel at a later time once that plan has been solidified.

You may not be able to answer this, but with this type of product, would there be an equity ownership option for Metro?

We do not anticipate an equity ownership option at this time in that $7,000,000 pilot. It would something that would be considered down the road if we were to issue some type of other bond, but in this initial pilot product, no equity ownership.

Do we know if MDHA has enough staff to handle a product like this or would they need increase in that? You may not be able to answer that.

We have had initial conversations with MDHA about the administration of this 7,000,000 and our understanding is they would not require any additional staff to administer the 7,000,000. For those of you who are around, they did receive some ARPA allocations and did do some handle some of that money. This, however, is a little bit different product. Thank you. You're welcome.

Council Member Parker.

Thank you, chair. On the the land and the request for proposals for specific sites, I guess I heard the comments that it's people understand that we want to move that forward but it can we can you speak anymore to the timing that we might anticipate like here's three sites that Metro has selected and here is proposed criteria that we're gonna put out. And I guess what I feel like maybe it would be great to get something out in the universe that the development community could see and we could get some initial response from because we may, I know you guys have some really great folks working on this, but we may miss the mark where where where the development community is and and have to refine our approach to that. So, getting something out in the world sooner than later, I would I would love to see but do we have any sense of timeline on that?

I know that I we actually have meetings coming up very soon to move the RFP forward. We've identified the initial sites and and director Kim's been giving us that exact direction of get get the sites out there, test the market, see where we need to recalibrate as we go forward with more sites because this won't be the only universe of sites that we would be able to get out.

I hear the urgency and I feel it too with metro land process is important and we wanna make sure there's a way of sort of dealing with metro property that makes sure that we're balancing the housing goals with other internal to Metro goals and whatever that is, it's gotta be credible. Because once we put it out to market, we wanna make sure that we're not sort of coming out on the back end and saying, well, wait a minute, we had that identified, we needed that for something else. And there are rules that we need to follow for that. So I'm excited about this program. I feel like we're really close. So perhaps we could come back to the committees and give you an update in the next couple of months. Would that that work?

That'd be fantastic. Thank you.

Council Member Allen. Thank you,

madam chair. Sorry, I was late. I was at the sustainability committee but listened on the way in, hands free. So, I appreciate the all the questions about the $7,000,000 bond. That's what most of mine were about. I think I still need to hear it about four more times before I understand what subordinate debt does. But I look forward to hearing what the evaluation will show just in terms of bang for the buck because as I've mentioned, I'm doing my really crude one and just just wanna know, you know, if if we're spending our money well, and this is an even better way to spend it than that's then that's fantastic. So, do we think we'll have that that an output of that analysis anytime soon or is that a year out?

No, it's it's this summer. This summer. Yes.

Okay.

And and I would like to add that we'll be hosting some meetings or some conversations as this evolves so that people will get an a true understanding as we're as these parameters are developed program.

Great. Okay and then another good program that we have is the chip which stands for infrastructure something or other. One question is, as I understand it, it is currently used to go above and beyond and do even better infrastructure than you could anyway. I hear so many housing affordable housing builders say, we are struggling to in today's market to build things at a at a cost so that we can lower the rents or whatever. Is there any way that that could just cover infrastructure period?

Council member, the first thing I we are encouraging especially through the Barnes Fund is for the developers to understand on the front end what their infrastructure needs are. Being first in historically, it's we're applying for this money. This is the idea that we have. Later on, they find out they have real infrastructure needs that are not atypical to to any other developer. So, we are putting that back to them through our evaluation questions of understand what you need on this site.

Build that into your funding, your your project budget. Then, your funders can actually see what that is. I'm hesitant to expand Chip because the whole purpose of that was was to do those enhanced this first this current iteration mobility enhanced vision zero infrastructure improvements that are off-site and bring bring great community benefit. These developers should really be thinking about and understanding what needs to go into their site, carry that into their project budgets and see what financing and gap should be. And then we can look at what the real gap financing could look like. Gotcha.

Okay, thank you. Thanks for answer. I'll just let you know. Sometimes you hear other cities say, oh, we can waive fees or we cover infrastructure costs. So, I just throw that out as one more thing we might think about down the line and then one question about historic if that's appropriate to ask. I saw that there is a spot for an an historic historic zoning administrator and so I guess my question is, what would that person be doing that someone is not already doing or it means there's someone leading that department at this point, what will that new position add?

So part of what, and it has been a real pleasure working with that team. In the first few months that they joined the department, we've had a lot of program sort of conversations about sort of what a zoning administrator would do, which was not previously well defined versus some policy goals that we might have. And I think we've really elevated that there are some policy policy goals that we have as a city. Those will evolve through a preservation plan which is in a future work program item. But I I think we're doing the work of a zoning administrator.

We haven't publicly noticed and advertised that because I think part of it is we're still sort of inviting the team to do reflection with the department and also with the commission and talk about what their needs are. And I think we're still sort of going through that process.

Thank you. So you're just holding the space once it gets figured out. Okay. Thank you very much. And and, yeah, I I should just say thank you for making that transition work so well because I've I've heard only good things about it. I know it's it was a little stressful on the front end getting to there. So bravo.

Council Member Evans.

Thank you. I'm like Council Member Allen processing information. I'm probably gonna need to

hear about the bond conversation like just a way a lot more for it

to sink in. So, I guess how can can you help me understand the the Director Hubbard, what you were describing about like permanent affordability and that kind of thing and then Director Reed's discussion about recognize capital stack from all the projects that have happened in my area but how how do we ensure or how will this program be more like what you described and less like anybody that's doing affordable housing is just going to try to include this as part of their capital stack. I'm not sure I understand the distinction and the description.

One of the things that Forsyth Street elevated to us with having a loan program is Metro that does give Metro more teeth in the deal even though we won't have an equity piece of it. We have a greater a absolutely greater role than if it was just a grant and a data restrictive covenant that we can enforce a loan. We can call a loan. We can we can have

those

enforcements as well as however it revolve. It could possibly revolve back into that project to you know, add a fifteen, twenty year mark where the maintenance, it it needs substantial rehab, revolve the money back into it to make it make those improvements and keep it affordable beyond that term because that's usually when we see the loss of affordable housing is at the expiration and there's no capital to maintain those properties.

Alright, I have a few questions and if anyone else comes up with additional questions, feel free to raise your hand. I do have a question and it'll flow into my second question. You're doing a lot of great stuff in the planning department and within the housing division. How are you communicating all of this great stuff to the public? Do you have a communication staff? Like, how how are you doing it? How are you engaging the public?

I mean, you know, I was mentioning that the housing team, the program is one of the newer programs that we have but I think they're sort of on the forefront chair of communicating to the public. They've got this dashboard and QR codes and things. And so I think in this digital age, we are still sort of working to keep up with the best way that people consume information. But we've made a lot of investments in our websites and and other media. I don't know if you have anything you want to mention there.

If if I could add our our team is working on a newsletter. We're working with the communications team in the planning department on a quarterly newsletter to communicate out everything we're working on. I'll be honest, council member, we're the worst of telling the great stories of all the projects that are happening and so we want to make sure and elevate those but also to let everyone know about the new tools and again, all of these do live on our web page and there are, I think on every web page you go to, there's a place to sign up to get information and we send out updates as we're rolling out new things or announcing new programs or application opportunities.

Yeah and and from my experience, I think outreach is sort of baked in to what a planner is and does and they're really very good at it. We try to give them tools to use to do that effectively and one of those like a language service that we can use to translate materials for a different language users in in the and

going along with the public outreach, I know you mentioned that Forsyth was engaging with stakeholders. Does that include there are lot of advocacy groups who are very interested in in housing affordability. Is there outreach to those groups or is there interest in in working with these community groups as you kind of develop these tools and and launch them?

As we get the final recommendations from Foresight Street, we will certainly engage these stakeholders for their review and feedback and discuss what the next steps are for evolving the recommendations. Absolutely. And also looking to I can keep continuous engagement with our UHS community ambassadors.

And going back to the land bank and I may have have missed some information as I was writing my notes. The land bank would consist of metro owned property and I know that for part of Barnes like we donate properties to nonprofits that do affordable housing. So, is the purpose of the land bank, is it to maintain ownership of this metro property or we be donating the properties to to different non profit developers?

So, with the the initial work of the land bank is to well, the bigger purpose of the land bank is to assemble land, hold land, make it and dispose of it for a public purpose. The additional role of the land bank here is to take our portfolio of tax delinquent properties that have been so fraught with title issues that is taken the nonprofits a really long time to clear and some have been returned to us to take advantage of state law that allows a land bank authority to clear that in an expeditious manner and to donate those to through a disposition to nonprofits for those tax delinquent as the land bank has the potential to evolve to a bigger portfolio. There would be an opportunity to sell of that were an opportunity to ground lease and to or take on some other other roles that could be income reducing to the land bank and empower it to acquire property.

Okay.

And we'll we'll have all of that when we come to council with our land bank legislation.

Okay. Going back to the number of affordable units needed the twenty, zero over the next ten years. I've heard a large a larger number than that. So, maybe I have my numbers conflated. Is it just that we need the twenty, zero of the 60% AMI and lower? Did did I misunderstand that?

So, there have been two numbers. One is the 90,000. Yes. That's the larger housing supply across rental, ownership, and the entire income spectrum to meet our current demand and future growth. Of that 20,000 need to be income restricted to households at or below 60% AMI rental. Alright,

so I I wanna go back to the to the the loan fund because I've I've got some folks who are a little bummed that is they don't it doesn't sound like what they thought it is. And so I think there needs to be a little bit more clarification. Because I think what folks are expecting are the is the bond tool that state law has empowered us to use. My understanding is that that is not completely fleshed out. So, just want to clarify, is there a bond to that as part of the FY twenty seven proposed budget?

Director Reek? No. Okay. So, there's no there's no bond tool. Okay.

No and just to elaborate a little bit on that if I may. Okay. Sure. So, you all appreciate that we have bond ratings and that our bond ratings are really good and keeping our bond ratings are really important. And so at where we are currently taking on additional debt with a metro backstop would not be in our best interest.

We look at debt per capita. So when the rating agencies, which we recently just went through in February, when I told everybody, hey, our GO bonds ratings were reaffirmed. One of the main metrics they look at is bond debt and debt service per capita. Currently, the convention center bond debt is included in those figures. The revenue associated with the convention center debt is not included.

So the debt service counts, revenue does not. So there was some recent legislation that was passed at the state that will allow us and we're coming back to council in July. So I'm not telling you anything. I'm trying not to get ahead of anything. We'll be coming back to council in July to put forward an interlocal agreement that would be signed between Metro Council and the convention center.

When that happens, we are working in parallel to refinance the convention center debt. When that happens, guess what? We can release our backstop on the convention center debt. When that happens, that would free up the ability to do something on an affordable housing bond. So I wanna be clear, there is a path forward.

We have been working diligently on this. It is extremely important that we keep our bond ratings. And so I wanted to give everybody a little bit of context because I understand everybody wants this, but we also wanna do it in an appropriate, well planned, timed manner that does not put our bond rating at risk. Did that answer your question chair in a little more clarity than my original no?

It does and and stay right there because I have a couple of extra questions. Okay, so. The process of, if everything goes according to plan and the whole refinancing and taking metro, getting metro off the hook for that, Music City Center debt, How long do you anticipate if everything goes as planned? How long would that take?

Sure. If everything goes to plan, we would get an interlocal agreement to Metro Council sometime in the July timeframe to be considered. If that's approved by council and the Convention Center Board in July, we would refinance the convention center debt somewhere in the August, September timeframe. And that would release our backstop. So we are working diligently on all of those things.

We are also working on a financing plan for affordable housing. So, if we can get something together and in place, we are not gonna wait for like the FY '28 budget, for example, chair, we would be moving as swiftly as we can. We understand this is a mayor priority and understand how the community feels about affordable housing. We've seen the need from the UHS and so we recognize that. We just need to make sure that we're doing it again in an appropriate, well timed, well thought out plan to make sure that our taxpayers are protected, our bond rating is protected.

And you guys, y'all have already heard my bond bill about bond rating. So I don't feel like I need to go into that again. But it does need to be done in an appropriate, well thought out manner. So we also wanna make sure we're understanding the needs. What are those needs?

And that's where I'm gonna say our incredible partners at planning have been so instrumental in working with them to determine the need. You don't just go say, oh yeah, we got a bond. Okay, well, how are gonna use it? And so you have to marry the the uses up of the bond and what that financing does with what planning wants to do. And that's why, you know, I really appreciate you saying banks, but thanks to you for including finance and being such great partners as we're working on this together. And

the next question may be a dual question. So, there's a question from the audience regarding how is this revolving loan fund different from any other capital stack for developers? It's just a loan fund for developers. Is it that as a condition of metro providing a loan, we can require permanent affordability and certain tenant protections, etcetera. Can someone explain how this is different from any other capital stack that developers go after?

Those would be significant parameters that we would want to evaluate with Forsyth on what we would introduce to the market. We are already, and let me say this, with the Barnes Fund in this round, evaluating proposals that have affordability terms well beyond thirty years. Last funding round, we awarded two coops funding that have ninety nine year plus deed restrictions that have that resident governance, the the deep affordability. So, we're already introducing that. We're already introducing stronger tenant protections in the Barnes Fund.

We are evolving these and and not just whatever this product is but in every single thing that we're looking at. We are requiring newer grantees to give us eviction reports every year. We are not allowing any of our partners to increase the tenant's portion of a rent during a lease term. So, we are hearing what our residents are saying that are causing their housing insecurity and building that into all of our tools, not just what these new programs are gonna look like. But we are looking at stronger and stronger measures, particularly if we are able to have more skin in the game through a loan program than with a grant.

And the the current deed restriction mechanisms that we have.

Council Member Evans. Thank

you, chair. I was kind of reflecting on Director Reed's comments about the backstop and which I understand that concern. I think the undercurrent of that though feels like, you know, the state is taking over the additional funds, you know, from the excess funds from the Music City Center and diverting it to the East Bank Authority and so, what what's the what's Metro's posture around kind of that activity and how does that play into our conversation or does it around kind of the issues that we can't fundamentally move forward with the program because we're kind of backstopping a situation that's going to be out of our control soon anyway related to like excess funds and state take I'll call it state takeover of downtown. So, like, are we considering a lawsuit that may not be something that you guys want to mention right now but I just want to mention it out loud that it should be something that we understand.

I doubt anyone is prepared to respond to that. Oh, director Reed. You're.

I'm on. Okay. So, we we are planning to come back when we bring the interlocal agreement and we will walk through in detail the all of the the TDZ bill. There were debt. I want to make sure there's two different TDZ bills.

So, there's one that's kind of the financing piece and then, there's, I'll call it the other TDZ bill And so we will be walking through the financing TDZ bill in detail with council. Will say this, the TDZ was set to legislatively expire by calculation somewhere in the 2031 to 2032 timeframe, which means all of the TDZ money would have gone back to the state and been fully under the state control. The legislation, and again, we'll be happy to walk through that in detail. It actually there's a now waterfall for that money. And then there is what's calculated as surplus that is controlled by the Joint Tourism Board.

So I I will add that as context and that's really all I had to say until we're actually able to come back and talk through the full extent of that bill.

Okay, additional finance question. On the everything happens. We we're then we're in a posture where we can do bonds for affordable housing. Will there be a does there need to be money in this fiscal year twenty seven budget to cover those debt payments? And with the $7,000,000 revolving loan fund with some of that money end up going towards debt payments, should we issue bonds in the future?

That is a great question and I appreciate that question, chair. The answer is at this point, no. We do not need to put anything in the FY twenty seven budget. Our bond payments for those of you who are aware, most of those happen in January and July. So, January 1, July 1 And so if by the time we get through the process I outlined and we're able to do something in the affordable housing, the bond would most likely be issued in kind of the spring timeframe. And then with the first debt payment would be in FY twenty eight. Alright,

I think I have covered all of my questions. Any additional Councilwoman Suarez.

Thank you, chair. Thank you, director, board directors for being here. I know that a lot of the question that I have, the chair probably covered already so I'm not going to go back and repeat them. So I wanted to get here in time to thank director Obidon on record for all the work that she's done with the eviction right to cancer program between her and Casey. That is a big need in the community and she has been instrumental in working with all the partners and getting that to where it is now.

We often complain about what we're not doing. And when we do do something, I think it's very important that we acknowledge that. And so I wanted to say thank you so much to you and your staff. It's not where it needs to be. I'll be coming for more, but glad with what we have. And so we wouldn't be here if not for your assistance and so I wanna acknowledge that. Wanna make sure that I get in time to say that. So thank you. On your budget modification, one of the numbers that I'm looking at here says an amount that you wanna spend on reducing homelessness. And the request was 3,000,000, but the amount funded is 2.4.

So there's about 600,000 deficit. Can you speak to that? What exactly are we now funding? What are we missing in that number?

I'm gonna have George slide his cheat sheet over to me. So is in our budget modification request, not what was initiate?

Yes, I'm I'm looking at this big spreadsheet.

Was this the

So, we asked for three. I think right now, there's two. Four funded? Yes. Okay. And so, we will I'm sorry?

Okay. Alright. We know what it is.

Okay. Okay.

We didn't get 3,000,000 for you. Oh, okay. That's the word. Okay. Right.

We will but we will we will work to, you know, adjust to the to the resources that are given to the department.

Okay, I appreciate that. I just know that as much as we're talking about homelessness and the need for more housing and programming, I was interested. I didn't know that that was the RTC money. I just saw homelessness and I thought that 600,000 is something that I would have loved for us to be able to fund. And then the 30,000,000 that is at the end of the page, is the recommended by the unified housing strategy for affordable housing grants. Is that the bond that we've been talking about? Is that what that 30,000,000 is? Or it's a 30,000,000 request and a zero or is that Barnes fund? That's Barnes fund. But it's showing that zero is funded. I thought It's

in the admin budget.

It's in the admin budget, so it's no longer Okay. Alright. You for the clarification. I appreciate that.

Council member Allen.

Thank you. If I might ask one more question. Since since we've circled back around to Barnes. As you know, y'all asked for 30,000,000 and many advocates, you know, who have done a lot of hard homework on the efficacy of the Barnes Fund asked for 30,000,000. So just to sort of rephrase a question I asked earlier about bang for the buck. The 7,000,000 that's going into this other fund gets us almost to 29,000,000. Do we feel like that 7,000,000 is gonna deliver as much housing as it would have if it had been in Barnes? Is that a fair question to ask?

Yes, because we believe the 7,000,000 will will pull a lot some of the low income housing tax credit projects. We would that would typically get grants through Barnes and through this program and free up some Barnes money for some of the deeper affordable housing, the permanent supportive housing, the home ownership projects that really aren't the right candidates for subordinate debt products. Okay,

thank you. That's an answer we need to hear because we've got a lot of people to answer to and being able to say the money's there, it's just in two places, but it's still gonna do the important work. So thank you for that.

Any additional questions for our planning department and housing division? Thank you so much. Those extra fifteen minutes worked out from the previous hearing. Thank you. Thank you.

Next up, we have the Arts Commission.