Mayor Tim Kelly to Allow Homeowners to Build Accessory Dwelling Units to Help Curb Runaway Housing Costs

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Ordinance to allow accessory dwelling units by right will increase the supply of housing across the city by unlocking the full potential of single-family dwellings

Chattanooga, Tenn. (Monday, April 11) — Chattanooga Mayor Tim Kelly is working to increase housing options and affordability for Chattanooga residents through a proposal that will permit accessory dwelling units on single-family lots under certain conditions.

Accessory dwelling units, alternatively known as in-law suites, carriage houses or granny flats, are often found above garages, in a detached structure or either above or below the principal dwelling. And at a time when Chattanooga is suffering from a deficit of more than 5,000 units as housing costs skyrocket, allowing ADUs by right on single-family lots couldn’t come at a better time, Kelly said.

“Chattanooga is on the brink of becoming a city in which our children cannot afford to live, and that is unacceptable,” Kelly said. “This ordinance will allow our seniors to age in place, support multi-generational households, and create energy-efficient housing while also maintaining the character of our neighborhoods.”

The ADU ordinance is the latest piece of Kelly’s One Chattanooga strategy to expand access to homes Chattanoogans can afford. The average cost of a home has climbed to $290,000 today, up from $159,000 in 2015, while median household income during the same period rose only slightly to $47,165 from $40,177 in 2015.

The 80 percent increase in housing costs has left 43% of renters defined as “housing burdened,” or spending more than 30% of their income on housing. And 22% of renters are “housing insecure,” defined as spending more than half of their income on housing costs.

Last month, Kelly launched a $100 million affordable housing initiative seeded by $33 million in city money that will leverage public and private funds to create thousands of units that residents can afford, ranging from supportive housing up to missing-middle homes. The city is working on the initiative in conjunction with the philanthropic, nonprofit and private sectors, creating a capital stack that offers a return on investment for those who help create homes that residents can afford.

The Kelly administration has also rolled out a number of initiatives to bolster low-income housing providers directly, including offering $100,000 in backing for security deposits, as well as undertaking comprehensive zoning reform to unblock the pipeline of new home construction.

Under the proposed ordinance, ADUs must be permanent structures limited to 700 square feet in size, and only one ADU will be permitted per single-family dwelling. ADUs must be located in the rear or side yard, and will not be permitted in front yards. They will also be height-limited to two stories, and cannot exceed the height of the principal home. 

Existing parking must be maintained or replaced if parking is lost in the course of creating the ADU, and ADUs are required to adhere to the architectural design of the principal home, including the facade, building materials, roof and windows. 

The ordinance does not supersede homeowner association rules or historic district guidelines as they relate to ADUs.