In an unprecedented move in recent Nashville history, Mayor David Briley plans to spend millions of dollars in city funds over the next decade to redevelop Nashville’s aging public housing.

Briley is expected to announce the redevelopment financing, and an allocation to the city’s affordable housing grant fund later this month, according to multiple sources who were briefed on the proposal.

The local financial contribution to the redevelopment plan is significant because it helps fill in gaps after private lending and other public financing.

The city’s public housing agency, the Metropolitan Development and Housing Authority, is dipping into its reserves as it struggles to finance the first of its housing overhauls, at the James A. Cayce Homes in East Nashville. MDHA has dubbed the redevelopment projects its “Envision” plans.

Since the Cayce master plan was finalized in 2014, only 70 units have been completed.

Three components of the initiative

Briley’s affordable housing initiative would have at least three major components: a 10-year commitment to help pay for the Envision projects; city-funded infrastructure at those redevelopment sites; and some allocation to the Barnes Fund for Affordable Housing Innovation, which provides grants to affordable housing developers.

The three sources spoke on the condition of anonymity because they were not permitted to talk publicly about Briley's plan. A spokesman for Briley declined to comment.

One part of the proposal remained unclear: How many additional homes for low-income residents, if any, would be built with the additional city funds?

Affordable housing advocates have long questioned MDHA’s redevelopment plans because they would not increase the amount of housing for low-income individuals. Instead, MDHA will replace the number of public housing units one-for-one, and add housing for middle-income residents. This “mixed-income” approach is meant to break up concentrated poverty.

'The need is staggering'

Phil Manz, the chair of the Affordable Housing Task Force at NOAH, a faith-based advocacy group, said his members were concerned about the current MDHA redevelopment proposal.

"Will this create any net new housing for low-income people?" Manz said of the Envision plan. "Everyone agrees the need is staggering."

Metro Councilman John Cooper said he has not been briefed on the mayor's initiative, but he’s heard “discussion around the courthouse” that an announcement related to affordable housing is coming.

Cooper said he wants to see details of the plan, but questions whether the city investment is really just a mechanism to underwrite the mixed-income housing that’s a staple of the MDHA projects.

“Anyone concerned about the city’s finances will want to see those numbers,” he said.

Bob Mendes, another councilman, said he was skeptical about giving MDHA funds after the agency’s leaders said they could handle financing the redevelopment.

“If Nashville is now an investor in MDHA developments, I would think Metro needs a lot more information on its ability to develop these on their own,” said Mendes, who had not been briefed by the mayor.

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Eventually, MDHA hopes to build more than 8,500 new residences in the urban core, replacing rundown public housing from the 1940s and 1950s. While Cayce is under construction, the agency has also been planning the redevelopment of the Edgehill, J.C. Napier and Tony Sudekum public housing developments.

Nashville recently took ownership of its public housing stock from the federal government, in order to allow for private borrowing, but those funds are uncertain. The city is not alone; other public housing agencies across the U.S. have faced similar predicaments.

Public housing in the U.S. is chronically underfunded, leading to an insurmountable backlog of deferred maintenance. The Department of Housing and Urban Development estimated that $25.6 billion in repairs were needed in 2010. In many cities aging buildings have been demolished but not replaced with subsidized housing.

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Reach Mike Reicher at mreicher@tennessean.com or reach Nate Rau at nrau@tennessean.com.