CHATTANOOGA — The Chattanooga City Council is considering a one-time $750,000 investment in the newly formed Tennessee Valley Community Land Trust to fund the organization's first three years of operations. The proposal was discussed at a council budget meeting in May 2026.

Council members Jenny Hill, Dennis Clark and Jeff Davis spoke in favor of the investment. Kevin Roig of the mayor's office said in a budget meeting that the administration supports the program but would prefer an initial investment of $250,000.

Councilwoman Hill said the $750,000 figure would cover three years of operations for the trust. The trust has raised about $1 million to date and would need to raise an additional $500,000 if the city provides the full $750,000. The FY27 allocation is recommended to be contingent upon the trust securing $1.5 million in matching subsidy funding, with the trust drawing down the city allocation proportionally as fundraising milestones are achieved.

Under the community land trust concept, a buyer can purchase and own the physical house at a lower price because they do not have to buy the underlying land. The Tennessee Valley Community Land Trust retains ownership of the land beneath the home. The trust is led by Board President Lisa Pinkney and founding board member Council Vice Chairman Ronald Elliott, who is leading the effort on the council.

The trust's goal is to achieve affordability for buyers at 80 percent of area median income for a two-person household. The first three years are planned as bridge years for subsidy acquisition and portfolio growth. Once approximately 225 homes are placed into the trust, the model is projected to become operationally self-sustaining.

A city council memo indicated the current proposal allocates $3 million to the Down Payment Assistance program, which launched in May 2026 and has approximately $3 million available to support the final two months of FY26. The program is expected to enter FY27 with substantial existing capacity. The memo's proposed revisions allocate $2.25 million to the existing Down Payment Assistance program under current guidelines and a one-time $750,000 investment to the land trust. The memo's revisions also reallocate $125,000 from a proposed Special Housing Programs Manager position to create an Economic Development Incentive Manager position, which would provide daily oversight of Tax Increment Financing agreements, improve compliance monitoring, and strengthen return-on-investment analysis for incentive packages.

The city's Down Payment Assistance subsidy is approximately $15,000 per household with total assistance of $21,000, and is likely to have the greatest impact for households earning between 100 to 120 percent of area median income, or $80,000 to $90,000 for a two-person household. Over time, the program could serve households at 60 to 70 percent of area median income through CLT-supported homes.