Chattanooga Gets Up to $750,000 from Bloomberg Philanthropies to Speed Up Backyard Homes
Mayor Tim Kelly announced Oct. 16 that Chattanooga is among the first cities picked for a Bloomberg Philanthropies housing initiative. The city will get $450,000 to $750,000 and expert help to get more accessory dwelling units built.
Chattanooga has allowed backyard homes for more than four years, but few have been built. Now the city has outside money to change that. Mayor Tim Kelly announced on Oct. 16 that Chattanooga is among the first U.S. local governments selected for a new Bloomberg Philanthropies housing initiative.
The city will receive $450,000 to $750,000. The money will help pilot technology to clear approvals, hire architects to draft permit-ready plans and hire strike team staff. The focus is accessory dwelling units, or ADUs: small second homes on a single-family lot.
Why the mayor wants more ADUs
Kelly was blunt about the results so far. “We were excited to get the legislation passed to allow Chattanoogans to build Accessory Dwelling Units during my first term, but I have been disappointed by the relatively small number of units added to our housing stock thus far,” he said.
He said the effort will help the city learn “from the reforms already proven in Austin” and provide “the means to turn a right on paper into more homes on the ground.”
What the program includes
| Item | Detail |
|---|---|
| Funding | $450,000 to $750,000 |
| Uses | Approval technology pilot, architects for permit-ready plans, strike team staff |
| Partner | Expert operational support delivered with Accelerator for America |
| Model city | Austin, Texas (ADU expansion) |
| Two-year goals | Cut approval timelines in half; double ADU pipelines; post gains on citywide supply |
| Program size | Up to 30 municipalities |
Three models, one choice for Chattanooga
The release says the initiative is built on three local government models: faster digital permitting from San Diego, expanded ADUs from Austin and housing strike force teams from Atlanta. Chattanooga picked the Austin model.
In Austin, according to the release, city leaders legalized up to three homes on most single-family lots, including backyard and other accessory units. They also cut minimum parcels from 5,750 to 1,800 square feet.
Results in the other model cities
The release cites results from the two cities Chattanooga did not choose. In San Diego, after Mayor Gloria set a 30-day limit on approvals, homes cleared for construction jumped 82% in one year. In Atlanta, a combined housing office under the Chief Housing Officer put more than 2,000 affordable units back in motion, the release says.
Michael R. Bloomberg said the goal is “helping more mayors adopt proven ways of getting more housing built—and delivering.” Mary Ellen Wiederwohl, President and CEO of Accelerator for America, said the support will “help more mayors put proven tools to work in their own cities.”
Nashville is in, too
WSMV reported that Nashville and Chattanooga are among 14 initial cities selected, joining cities including Albuquerque, Louisville, Miami, San Jose and Pittsburgh.
Chattanooga’s current ADU rules
In May 2022, the City Council approved an ordinance allowing homeowners on single-family lots to build accessory dwelling units under certain conditions. The city’s announcement at the time listed the main rules:
- ADUs must be permanent structures limited to 700 square feet.
- Only one ADU is allowed per single-family dwelling.
- The unit cannot be in the front yard setback.
- Height is limited to two stories when the main home is more than one story, or 24 feet when the main home is one story.
- HOA rules and historic district guidelines still apply.
- Existing parking must be kept or replaced.
- ADUs must follow the design standards for single-family detached houses.
The 2022 announcement said ADUs are also known as in-law suites, carriage houses or granny flats. They can be above garages, in a detached building, or above or below the main home.
Why the city wanted ADUs in 2022
When the ordinance passed, the city said ADUs would help address its deficit of more than 5,000 housing units, give seniors space to age in place and let multi-generational households live together. Kelly said then that the ordinance “offers an immediate opportunity for residents to increase their property values and the City’s affordable housing supply.”
Dates to know
- May 2022 — City Council approves the ADU ordinance.
- Oct. 16, 2026 — Mayor Kelly announces the Bloomberg Philanthropies selection.
- Oct. 19, 2026 — WSMV reports Nashville and Chattanooga among 14 initial cities.
- Within two years — Goals to cut approval timelines in half and double the ADU pipeline.
What it means for Chattanooga homeowners
If you want to build
Permit-ready plans could make an ADU cheaper and faster to start, since you would not need to pay for a custom design from scratch. The city has not announced when those plans will be available. Watch for updates before you hire a designer.
If you plan to sell
A legal, permitted ADU can widen your buyer pool. Some buyers want space for a parent, an adult child or a home office. If you already have an ADU, collect the permits and final inspection paperwork before you list. Buyers and lenders will ask.
If you are buying
Check whether a lot is in an HOA or historic district before you count on adding an ADU. The 2022 rules say those guidelines still apply.
Questions to ask before adding an ADU
- Does my lot qualify? The rules apply to single-family lots. Check your zoning and setbacks first.
- Is there an HOA or historic overlay? Those rules still apply and can be stricter.
- Where will parking go? Lost parking must be replaced.
- How will utilities connect? Water, sewer and power hookups can be a large part of the cost. Get quotes early.
- What is the goal? Family housing, rental income and resale value can point to different designs. Decide first, then design.
The bigger picture
The release frames the program as a way for cities to pull the levers they control: “what may be built, where it may be built, and how quickly it is approved.” It also says the effort aims to position participants to benefit from new federal incentives in the ROAD to Housing Act.
For more on the local market, see Chattanooga-Area Inventory Hits 4,106 Homes in September as Days on Market Climb to 56 and the Median Holds at $340,000 and Council Delays Plan Chattanooga Vote 30 Days.
Wondering what your Chattanooga home, with or without an ADU, would sell for today? Request a free home valuation, or get a cash offer if you want a fast, simple sale.
How much is Chattanooga getting from Bloomberg Philanthropies?
Chattanooga will receive $450,000 to $750,000 to expand accessory dwelling units, plus expert operational support delivered with Accelerator for America.
What will Chattanooga use the Bloomberg money for?
The city says it will pilot technology to clear approvals, engage architects to draft permit-ready plans and hire strike team staff.
Can I build an ADU in Chattanooga?
Yes, if you live on a single-family lot. Under the 2022 ordinance, one ADU is allowed per single-family dwelling, limited to 700 square feet, and not in the front yard setback.
How tall can a Chattanooga ADU be?
Two stories when the main home is more than one story, or no more than 24 feet when the main home is one story, under the 2022 ordinance.
What are the goals of the Bloomberg ADU program in Chattanooga?
Within two years, the city aims to cut approval timelines in half, double the pipeline of accessory dwelling units and post gains on citywide housing supply.
Source links
- City of Chattanooga — Mayor Tim Kelly announces Chattanooga will receive funds and expertise from Bloomberg Philanthropies (Oct. 16, 2026)
- City of Chattanooga — Chattanooga homeowners can now build accessory dwelling units on their property (May 25, 2022)
- WSMV — Tennessee cities selected for new initiative to increase housing affordability (Oct. 19, 2026)
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- Chattanooga-Area Inventory Hits 4,106 Homes in September as Days on Market Climb to 56 and the Median Holds at $340,000
- Council Delays Plan Chattanooga Vote 30 Days
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- How much is my Chattanooga home worth in 2026?
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