Shechter

One problem that can occur when affordable housing is built is qualified buyers scooping up those homes or condos and flipping them for profit.

This situation happened in Nashville during the late 2000s when some of the “affordable” condos at trendy developments such as the ICON and Rolling Mill Hill were resold for tasty profits and essentially became unaffordable for the people they were designed for.

What’s to keep this from happening again?

“This kind of thing definitely can happen,” says Floyd Shechter, a local affordable advocate and commercial real estate specialist. “There are a handful of different ways to address it, and I believe Metro Planning will consider them as they come up with their recommendations.”

One such strategy, he says, is with deed restrictions that prohibit a property from being sold for a designated period of time.

“The problem with ICON was that the deed restriction wasn’t for a long enough time. It was only for five years,” he adds.

A second strategy is called shared equity, in which any profit from a future sale is split between the homeowner and the city’s affordable housing fund.

Still another strategy is for affordable units to be owned and rented out by the city’s affordable housing fund.

The fine details will be provided when Metro Planning submits its findings on affordable housing to Metro Council. Metro Planning spokesperson Craig Owensby says the report should be ready in six months and confirmed that a consultant has been picked for the project but hasn’t yet accepted the job.