How do you define the challenge?

Every Chattanoogan should have an affordable place to call home. But today, too many families are struggling. 

• The city has lost 45% of its apartments renting for less than $1,000 per month between 2019 and 2024.

• More than half of renters earning under $35,000 per year spend over half their income on rent in 2024.

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Developers are building new housing, but the cost of construction means new apartments often require rents that are out of reach for long-time residents. Most affordable housing is built using federal Low-Income Housing Tax Credits. That program is important, but it cannot produce enough homes on its own. We need additional tools. 
 

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What is Invest Chattanooga?

Invest Chattanooga (IC) is a nonprofit, publicly supported housing investment fund created in 2025 with $20 million in seed funding from the City of Chattanooga. IC provides capital to help create high-quality, mixed-income housing throughout the city, with at least 30% of units permanently affordable.

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When IC earns returns on its investments, those funds are reinvested into new housing. That means one public investment supports housing again and again.

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How does Invest Chattanooga work?

IC partners with experienced real estate developers and landowners who are building housing in Chattanooga.

• Invests up to 20% of a project’s total development costs

• Provides capital at a concessionary (below-market) rate

• Helps projects “pencil out” so they can move forward

• Maintains a long-term ownership interest to ensure permanent affordability

 

Think of IC as a mission-driven investment partner, similar to a private equity fund, but focused on long-term public benefit.

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What Types of Projects Does IC Support?

IC focuses on projects with 50-250 rental units, including:

• New construction apartment buildings

• Acquisition and renovation of older apartment buildings

• Partnerships with public, nonprofit, or faith-based landowners

 

IC typically supports projects that create 20-75 affordable units. 

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What Does “Affordable” Mean?

Every IC investment must include at least 30% permanently affordable units.

• At least 20% of units affordable to households at 50% AMI ($38,200 for a family of two), so childcare workers and hairdressers can afford to rent.

• At least 10% of units affordable to households at 80% AMI ($61,150 for a family of two), so firefighters and teachers can afford to rent.

• The remaining units are market-rate, increasing the overall supply of high-quality rental to meet growing demand and keep rents stable.

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What makes this a market-based approach?

IC blends public and private tools to make affordability financially sustainable. IC investments may combine: 

• Low-cost capital

• Tax abatement

• Below-market senior loans

• A long-term IC ownership interest to protect affordability 

 

The approach allows a fully market-rate project to become a mixed-income community without relying on federal subsidies.