Authored by City of Chattanooga Director of Housing Policy Megan Miles
Across the United States, from rural communities to growing metropolitan areas, the increasing cost of housing has become one of the most pressing economic challenges. In Chattanooga, Tennessee, a mid-size city in the foothills of the Appalachian Mountains, housing affordability is an urgent priority. Once considered an affordable market, home prices in Chattanooga have increased 68% from 2019 to 2024, while rents have risen 47%, placing significant financial strain on working families.
Chattanooga’s success in passing housing reform is notable not only for its policy outcome but also for the bipartisan, collaborative approach that made it possible. In a state where traditional regulatory tools — such as inclusionary zoning, impact fees and rent control — are preempted by state law, we had to build a broad coalition, find common ground and reframe the conversation. This effort culminated in the passage of Tennessee’s Attainable Housing Incentives Bill in July 2024, which enabled Chattanooga to establish the state’s first voluntary zoning incentives program in January 2025.
Navigating Policy Constraints in Tennessee
Like many cities, Chattanooga faced significant housing challenges in the wake of the COVID-19 pandemic. However, efforts to address affordability were complicated by Tennessee’s restrictive legal framework, which limits local governments’ ability to implement many commonly used housing policies. Key constraints included:
- Preemption of inclusionary zoning. Local governments were prohibited from offering zoning incentives in exchange for affordable housing, even on a voluntary basis.
- Limited financial resources. As a low-tax state, Tennessee provides fewer direct subsidies for affordable housing.
- Prohibition of rent regulations. Policies that might protect tenants from rapidly increasing rents were not legally viable.
Given these constraints, Chattanooga’s leaders recognized that a traditional approach was not feasible. Instead, we would need to get creative and take bold action to create systemic change. We convened a diverse coalition of housing advocates and policymakers from across the state to discuss potential regulatory changes, and quickly identified Tennessee’s preemption on voluntary inclusionary zoning as a low-hanging fruit: an opportunity to introduce a market-driven, incentive-based tool that aligned with the state’s legislative priorities.
A Collaborative, Bipartisan Strategy
Rather than framing housing affordability as a progressive issue, our coalition focused on shared economic goals, appealing to a broader audience that included business leaders, developers and policymakers from across the political spectrum. The strategy centered on reframing the conversation in ways that resonated with legislators on both sides of the aisle:
- We emphasized how this policy could boost housing for working families without burdening local budgets — preserving limited financial resources.
- The focus shifted from regulation to flexibility and local autonomy, highlighting how the policy would provide local governments with the tools to support housing production without state-mandated requirements.
- A data-driven approach clarified the impact — a visual breakdown of area median income (AMI) and salaries for essential workers helped legislators see how teachers, first responders and local employees were affected by rising housing costs.
Legislative Success and Local Implementation
A key turning point came when Chattanooga’s coalition secured the support of a conservative state senator who saw how the lack of affordable housing was impacting college graduates who wanted to stay and work locally. He championed the bill as a pro-growth, pro-economic development measure and advocated for it through the legislature, leading to its passage in July 2024.
Following this legislative victory, Chattanooga became the first city in Tennessee to adopt a voluntary zoning incentives program in January 2025. This policy enables developers to receive land-use incentives in exchange for including affordable housing in their projects, helping to expand the local housing supply while maintaining financial sustainability.
Key Takeaways for Housing Reform in Conservative Legislatures
Chattanooga’s success offers valuable insights for local governments and advocates working within politically and fiscally conservative environments. Key lessons include:
- Engage across political lines. Assumptions about opposition can be counterproductive. Early engagement with policymakers from all perspectives can reveal unexpected allies.
- Identify shared priorities. Housing can be framed as an economic development issue, a workforce retention strategy or a local control initiative, depending on the audience.
- Focus on pragmatic solutions. Start with policies that have broad appeal and do not require significant financial investment to build momentum for larger reforms.
- Use data effectively. Policymakers respond to clear, locally relevant data that demonstrates the real-world impact of housing challenges.
- Humanize the issue. Personal stories and relatable examples can be more persuasive than technical policy arguments.
- Secure the right champions. A credible, well-respected advocate with a personal connection to the issue can be instrumental in legislative success.
- Be flexible. Achieving progress often requires compromise; incremental steps can pave the way for more comprehensive reforms.
In today’s uncertain political and economic landscape, cities and states can’t afford to wait. Chattanooga’s experience shows that with the right strategy, language and coalition-building, even the most politically challenging environments can embrace housing reform. For local leaders tackling the housing crisis, one thing is clear: common ground exists — you just have to be willing to find it.
Financing Housing Production & Preservation
Explore NLC’s interactive Filling the Gap tool to pinpoint location-specific funding sources to close the funding gap for the production and preservation of housing developments in your community.
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