Across Nashville and Middle Tennessee, the question about how to address our housing shortage is perhaps the number one challenge facing our community. Every week seems to bring new studies and headlines about the issue. Behind each one are thousands of neighbors struggling to find a place they can afford to live across the entire housing spectrum.

The recently released Unified Housing Strategy plan from the Metro Nashville Planning Department, sets the table for why Middle Tennessee is experiencing such a profound housing shortage: 

• While Nashville has experienced a relatively high income growth rate, it pales in comparison to the price of housing. For example, while the median home price in the Nashville area grew by about 154% from 2007 to 2024,  the median hourly wage during the same time period grew by 75%.
• Rents have increased 53% since 2020 alone, forcing one in four renters to now pay more than half their income on housing.
• Nashville needs at least 18,000 affordable rental units right now, growing to over 50,000 in the next two decades.

So why is it so expensive and hard to build affordable and income aligned housing in Nashville? The answer is layered and building affordable housing is difficult due to a combination of high costs, restrictive zoning, and policy barriers:

• High Land and Construction Costs: The price of land in Nashville has surged since 2015, making it nearly impossible to acquire property affordably. Construction costs have also risen sharply due to inflation, supply chain issues, tariffs on materials like lumber and steel, and labor shortages. These factors drive up the total cost to build, making it challenging to keep housing prices affordable
• Restrictive Zoning Laws: Only about 11% of zoned land in Davidson County allows for three or more housing units per parcel, and 82% is restricted to single-family homes. This significantly limits the ability to build higher-density, more affordable housing types such as duplexes, triplexes, and small apartment buildings. As a result, the city is projected to produce at least 20,000 fewer housing units than needed over the next decade unless zoning reforms are enacted.
• Policy and Regulatory Barriers: Outdated regulations, state preemption limiting local incentives for affordable housing, and a slow permitting process add further obstacles.
• Funding Gaps: Developing affordable housing often requires multiple layers of financing, including low-interest loans, grants, and subsidies. Nashville faces persistent funding gaps, making it difficult for developers to cover costs without passing them on to residents.
• Population Growth and Demand: Nashville’s rapid population growth (20% in the past decade) has increased demand, pushing prices higher and making it even more difficult for low- and moderate-income residents to find options.

So what are the solutions?

Developers, advocates, nonprofit leaders and elected officials are working to address the crisis through a combination of new strategies, policy reforms, and partnerships. Key solutions include:

1. Unified Housing Strategy (UHS). The UHS outlines seven core priorities, such as:

• Expanding and streamlining housing programs across Metro agencies
• Increasing the development and preservation of affordable and workforce housing
• Strengthening tenant protections and eviction prevention efforts
• Encouraging public-private partnerships and community involvement

2. Zoning Reform: Metro Planning recommends updating zoning codes to allow for “missing middle” housing (triplexes, quadplexes, courtyard apartments) in targeted areas, which could significantly increase affordable unit production. Allowing denser, low-rise developments and revising design-based districts are proposed to reduce costs and expand options.

3. Leveraging Institutional Land. Nashville is exploring partnerships with colleges, universities, faith-based organizations, and healthcare institutions to develop affordable housing on underutilized land. Subdividing and rezoning institution-owned parcels could create thousands of new units, especially if commercial and retail districts are rezoned for multifamily use.

4. Incentives and Funding. The city is utilizing new state laws to offer incentives for developers who include affordable units in their projects. Nashville recently received a $5 million federal PRO Housing grant to support programs like the Faith Based Development Initiative and the Affordable Housing Accelerator Program, which aim to build capacity among developers and convert underused land into affordable housing.

5. Tenant Protections and Homeownership Support. The UHS includes expanded protections for renters facing eviction and additional support for first-time homebuyers.

6. Preservation of Existing Affordable Housing. The strategy emphasizes not just building new units, but also preserving legacy properties and existing affordable homes to prevent displacement. CFMT’s Nashville Catalyst Fund was created in partnership with Metro Nashville to provide quicker access to lower-cost capital that could help mission oriented developers preserve units as they came available on the market.

To learn more about the Unified Housing Strategy (click here)