Nearly 100 new “starter homes” are planned for Chattanooga near Chickamauga Creek and are aimed at helping first-time buyers or empty-nesters move into residence, an investor in the project said.
“That’s what Chattanooga needs right now,” said Ben Phillips, a member of a local group offering the 95 single-family homes on a largely vacant lot off Faith Road. “That’s our vision.”
The 28.5-acre site, a short drive from Interstates 153 and 58, is central to downtown, Chattanooga Airport and the Hamilton Place area, he said.
Called River Park Farms, Phillips said in a phone interview that pricing levels are being developed amid rising costs for lumber and other materials.
But he said residences, ranging from over 1,350 square feet to over 2,000 square feet, could start around $300,000 and offer a zero percent down payment.
Phillips said each home should contain three bedrooms, although two- and four-bedroom options are possible. Residences would also have at least two bathrooms, he said. Additionally, garages are likely, the investor said.
“We know there’s a strong demand for the homes we’re going to put there,” he said. “We wanted to go after what Chattanooga needed.”
Next month, Phillips’ group is seeking approval from the Chattanooga-Hamilton County Regional Planning Agency to change a zoning condition on the parcel related to open space on the site.
“It’s already zoned for housing,” he said. “The amendment will help tailor the correct mix for the amount of soil we are dealing with.”
Phillips said construction costs for roads, sewers and utilities are high.
“It’s such a high cost,” he said, and the change allows the development group to install 95 houses instead of less.
Mike Price of MAP Engineers, who is working on the project, said the reason for the request was not to change the density.
“We just need to have a little more leeway to allow us to build a little bigger house,” he said in a phone interview.
Chattanooga home prices, which have already seen a sharp rise in recent years, were projected in a December study to rise faster in 2022 than any other Tennessee metro.
Realtor.com saw home prices rise 6.9% in the Chattanooga area in 2022 from the previous year.
Homebuyers purchased a record number of Hamilton County homes in 2021.
In March, Chattanooga’s median home price topped $300,000 for the first time as a tight inventory of homes on the market pushed the typical selling price of homes up 18.5% from a year ago. a year, reported the Greater Chattanooga Association of Realtors.
Still, home prices in Chattanooga remain at least 25% below the U.S. average, according to the National Association of Realtors.
A Hamilton County landowner said last month he plans to build 15 additional new single-family homes on Snow Hill Road, which are expected to start at $500,000 each.
“We want these to be high quality, more upscale,” said Rick Stern, owner of land at 7712 Snow Hill Road.
Phillips said there are three existing homes on the section of Faith Road that will be demolished to make way for this planned development.