Skip to main content

Affordable Housing Payment-in-Lieu-of-Taxes (PILOT)

Jump to:

A Payment in Lieu of Taxes (PILOT) program offers developers a property tax discount in exchange for providing affordable rental units. The savings from reduced operating costs help offset the financial impact of charging lower rents. Chattanooga’s Affordable Housing PILOT program is unique because it’s tailored for market-rate developments and directly ties the tax abatement to the cost of offering affordable units. Each affordable unit has a “price,” determined by the potential revenue lost by charging below-market rents. This price is calculated based on the project’s ZIP code, unit size (0, 1, 2, 3, and 4 bedroom), and affordability level (50%, 60%, 70%, and 80% AMI).

Applicants can download the PILOT calculator to test scenarios for their project. The calculator generates the tax abatement schedule for the project’s zip code, estimates the project’s tax liability, and allows developers to experiment with different combinations of unit sizes and affordability levels to accumulate property tax abatement. Applications are received and reviewed on a rolling basis according to the process outlined below.

Program guidelines require that committed affordable units are maintained for a period of at least 15 years. In exchange, for the duration of the 15 year PILOT term, program participants receive an abatement of property taxes tied to affordable housing units provided and the project zip code. During the PILOT term, the title to the property is transferred to the Health, Educational and Housing Facility Board of the City of Chattanooga (HEB), and the developer makes payments in lieu of property taxes instead of the full property tax bill. During this time, the projects will be monitored by HCI for compliance with affordability requirements and other program guidelines.

Program is for: market-rate and affordable housing developments in the City of Chattanooga. Minimum of 10 housing units. Rental housing only. New construction or renovation, but only the value of the improvements can be abated, so minor renovations are unlikely to benefit.

 

Affordable Housing PILOT

Helpful Resources

PROGRAM MATERIALS

APPLICATION MATERIALS

Complete PILOT applications should be submitted through this online form. A complete application must include three components:

  1. PILOT Application Cover Page with appropriate signatures
  2. PILOT Application Worksheet (Download as Excel Spreadsheet)
  3. Supporting Documents (3 PDFs, see Application Worksheet for instructions)

Applicants should expect about 3 months for PILOT review and consideration, once a complete application has been received. 

HUD Rent and Income Limits

FY 2024 INCOME LIMITS
 50% AMI60% AMI70% AMI80% AMI
1 Person$30,650$36,750$42,900$49,000
2 Person$35,000$42,000$49,000$56,000
3 Person$39,400$47,250$55,150$63,000
4 Person$43,750$52,500$61,250$70,000
5 Person$47,250$56,700$66,150$75,600
6 Person$50,750$60,900$71,050$81,200
7 Person$54,250$65,100$75,950$86,800
8 Person$57,750$69,300$80,850$92,400

RENTS

Bedrooms 50% AMI60% AMI70% AMI80% AMI
Studio$766$919$1,073$1,225
1 Bedroom $821$984$1,149$1,313
2 Bedrooms $985$1,181$1,379$1,575
3 Bedrooms $1,138$1,365$1,593$1,820
4 Bedrooms $1,269$1,523$1,776$2,030