By Steve Woodhouse Editor
The Journal Express
---- — The Knoxville City Council took action Monday night to seek funding for housing rehabilitation and approved support for a new development.
After hearing from a third developer about a proposed housing development, the council voted to support a Section 42 housing application by Jim Bergman, who had addressed the council at a prior meeting. Bergman’s concept is for 52 new housing units of various sizes and style, including duplexes and quadplexes.
The Section 42 tax credit is similar to a lottery system, in which 30-40 proposals are received each year and approximately 13 are selected to receive the credit. If one of the proposals for Knoxville is selected, the City of Knoxville will have to provide a financial match, up to 6 percent, to the project. How much of an investment this would require, and where the money would come from is unknown. The council set aside $350,000 this fiscal year for housing development, which could be a source, but that has not been determined. To be selected, the housing must be affordable for low to middle income families. City Manager Harold Stewart said the proposals are not the usual low-income housing projects, rather they are aimed at families who may be starting out and cannot yet afford a home. People making a good wage could still qualify to live in the homes, but they could also be turned down for making too much money.
Stewart had good things to say about all three developers, all of whom were awarded Section 42 housing funds last year. As for why the council chose Bergman’s project, he believes it was because of the size and scope of the project.
“It was the biggest proposal,” Stewart said. Council also believed that having one strong application in to the program would make the City more competitive than if multiple efforts were backed. Most communities are fortunate to have a single developer interested in such housing projects, let alone three, Stewart added.
The council voted in favor of working with Bergman by a 4-1 vote with Councilor Tim Pitt dissenting. Pitt told the Journal-Express on Tuesday that he thought single-family housing proposed by one of the other developers would be a better opportunity for young families, to allow them to springboard in to home ownership in Knoxville. He said he was “on the fence” about his support for Bergman’s project.
The Section 42 application by Bergman is due Dec. 9. Announcement of winners is expected for April, and if successful, construction should begin in July or August.
The other housing initiative approved Monday night involved an application for a Community Development Block Grant (CDBG). The City is seeking between $350-390,000 to help rehabilitate approximately 10 homes in a selected area of Knoxville. The money can be used for a number of things to improve efficiency in the homes, including insulation, doors, windows, siding, etc.
Stewart said the City has already received a similar grant in the past. There were eight homes that received the benefits.
The council approved agreements with MSA Professional Services of Ankeny, one to administer the grant and one to handle technical services associated with the grant. MSA’s administration fee is $20,000, payable only if the City is awarded the grant. MSA will charge $4,500 per house for technical services, including testing and other requirements. The City’s match on this project is $10,000.
Other council notes:
• Set a public hearing for Monday, Nov. 18, at 6:15 p.m., in regard to a zoning change for a property on South Roche. Another hearing will be held that night for a zoning change for a property on Willetts. Monday, Nov. 18, at 6:15 p.m. is also the date and time of the next regular city council meeting.