Tennessee housing director presses for more development

The director of Tennessee’s statewide housing finance agency offered Blount County residents a solution to high prices: build more homes.

Tennessee Housing Development Agency Executive Director Ralph Perrey provided this suggestion during a presentation at the Blount Partnership on Thursday. The core of the problem, Perrey said, stems from an extended pause in building that began with the Great Recession. Development froze then as the economy contracted and stayed slow for years after.

These days, he said, Blount County and many other areas across the state have too few homes to meet current demand. The problem of supply and demand doesn’t affect all would-be homebuyers equally, he said.

“The guy who just sold a small ranch house in California for $1.3 million? This is not a problem for this guy. But the people we’re in danger of pricing out are the people who’ve lived in Blount County all their lives, or your kids, who’d kind of like to come back and live near where they grew up because this is a great place to live,” he said.

Sometimes local laws and rules prevent developers from building more affordable homes, he noted.

After Perrey concluded his remarks, the group gathered at the Blount Partnership asked him a variety of questions about how housing might be made more affordable: How can you ensure the quality of new developments? How do public-private partnerships facilitate affordable development? What policies promote affordable housing?

The numbers

Relaxing some restrictions on density and on some types of housing can help, he said. Building bigger homes on larger lots can be pricier than denser development concentrated on a smaller lot, he said.

Efficient spending is a major consideration for developers as construction costs have fluctuated along with home prices. “The average THDA-backed mortgage this year is 65% bigger than it was in 2019. And interest rates have doubled, so the family that’s getting our typical loan this year, it costs them $1,000 a month more than our average customer in 2019,” Perrey said.

And higher housing costs can mean fewer spaces locally for people who work as firefighters and teachers, he commented.

But shifting density requirements in Blount County could prove difficult. The county board of commissioners in 2023 increased the minimum lot size for new homes in one zoning district by 14,780 square feet. In a different zone, the smallest lot size permissible is 32,670 square feet. Twelve of 21 commissioners at the time opted in favor of requiring the larger lots.

Controlling growth, a concept Commissioner John Giles raised Thursday, and restricting dense development in some suburban and rural areas have been major commission priorities in recent years.

Possible solutions

Some Blount County organizations are now working to build new affordable housing. The Maryville Housing Authority’s leadership hopes to bring over a hundred new apartments to the area in the coming years. Foothills Community Development Corporation, a nonprofit, is likewise building homes in the county.

But throughout the community, low housing stock — and low variety of housing types — has become a problem, Perrey said.

In the ten years after the housing market collapsed, he added, developers built “maybe” 4,100 new housing units in Blount County. “That is the lowest total since the 1960s. And, of course, a lot of people have moved here,” he said.

An audience member Thursday asked about the type of planning that might promote affordable development.

Keep it local, Perrey said. Talk to community members and examine housing types that could fit into a neighborhood. Think about parking requirements. Perrey referenced a development intended to provide housing for formerly homeless veterans. In such cases, he asked, “How much extra parking really do you need?” Lengthy permitting processes and high fees can also be an issue, he noted.

And to Perrey, the approach that officials take can be critical: “Get the talk right.”

“You’re going to scare people if you just say ‘we’re going to rezone your town,’” he added. “And if I’m worried that what you plan to do is gonna knock $50,000 off the value of my home, I’m not gonna be for it.”