Partnership Gives New Life to Public Housing in Knoxville, Tennessee

Partnership Gives New Life to Public Housing in Knoxville, Tennessee

First Creek at Austin transformed an aging public housing complex in Knoxville, Tennessee, into 446 units of affordable and market-rate housing. Photo credit: Knoxville's Community Development Corporation

Knoxville is a vibrant and growing city of nearly 200,000 people in eastern Tennessee. The city's downtown has become more desirable to higher-income households and is becoming less affordable to lower-income residents. The city of Knoxville's 2025 Consolidated Plan lists the transformation of blighted properties into affordable housing as one of its top strategic priorities.

The city's public housing agency, Knoxville's Community Development Corporation (KCDC), recently collaborated with public and private partners to revitalize Austin Homes, an aging public housing development less than a mile from the city's downtown core. The site is now home to First Creek at Austin, a multigenerational, mixed-income, 446-unit development that expands and improves the supply of both affordable and market-rate housing in the area.

The Road to Revitalization 

KCDC has owned and operated the site of First Creek at Austin since 1941. Despite its proximity to transit, employers, and amenities, the site historically was isolated because of limited street connectivity and the natural landscape. Before its redevelopment, Austin Homes consisted of 129 subsidized units spread across 23 acres, with challenges such as inadequate street parking and aged infrastructure that reduced the site's appeal. As of 2018, the development's vacancy rate was 14 percent.

In 2018, KCDC began a robust community engagement process to inform the future of Austin Homes and hired Gensler, an international architecture firm, to prepare a master plan for the site, which outlined a multiphase redevelopment process. Financing for the first phase of redevelopment closed and construction began in 2020, starting with significant infrastructure investments to raise the grade of the site to align with the street network and to improve roadway connectivity. Phase 1 of First Creek at Austin opened in 2022. Phase 2 broke ground in 2021 and opened in 2024, and the third and final phase opened in October 2025.

About the Project

First Creek at Austin consists of 446 housing units, including 181 subsidized affordable housing units, across a range of income levels and housing typologies. Although the development's market-rate units are not subsidized and are unencumbered by formal income restrictions, James Hatfield, chief development officer at KCDC, says the units are priced with the intention of being affordable to households earning between 80 and 100 percent of the area median income (AMI). These households often are priced out of market-rate housing but are ineligible for rental assistance.

First Creek at Austin offers a range of multifamily housing options, including rowhouses, townhouses, and midrise apartment buildings. Photo credit: Knoxville's Community Development Corporation

The development consists of 88 subsidized units reserved for households earning up to 30 percent of AMI, 50 subsidized units for seniors (those aged 62 and over) earning up to 50 percent of AMI, 43 subsidized units for households earning up to 60 percent of AMI, and 265 nonsubsidized market-rate units targeted to renters earning between 60 and 100 percent of AMI. The affordable and market-rate units are distributed evenly throughout the development, and larger family units are available for all income levels. First Creek at Austin offers 225 one-bedroom units, 162 two-bedroom units, 51 three-bedroom units, and 8 four-bedroom units. 

Residents have access to amenities including a fitness center, laundry room, outdoor green space, and indoor community spaces. Senior residents in Phase 3 of the development will have access to supportive services, including housekeeping, meals, transportation, and health-related services. In addition, Central Bearden Church manages an onsite community resource center called The Lighthouse at First Creek at Austin, which provides residents with community education, youth development programs, and a Bible study group. 

Financing

Redeveloping First Creek at Austin cost roughly $151.1 million across all three phases. The first phase of development cost $29.1 million and was financed primarily with $18.8 million in 9 percent low-income housing tax credits (LIHTC) as well as a $6.9 million permanent loan from Pinnacle Financial Partners and a $3.4 million soft loan from KCDC. Financing sources for the $44.2 million second phase included $19.6 million in 4 percent LIHTC equity, a $10.5 million soft loan from KCDC, and a $14.1 million permanent loan from Pinnacle Financial Partners. This phase also was supported with project-based vouchers through the Housing Choice Voucher Program. 

Residents have access to amenities that include a fitness center, laundry room, outdoor green space, and indoor community spaces. Photo credit: Knoxville's Community Development Corporation

The $65.6 million third phase of the development had numerous financing sources, including $28.1 million in 4 percent LIHTC equity, a $13 million permanent loan from JPMorgan Chase, an $11.1 million soft loan from KCDC; a $7.5 million Section 202 Supportive Housing for the Elderly grant, a $900,000 forgivable loan from the city of Knoxville, a $1.5 million grant from the National Housing Trust Fund, and a $3.1 million deferred developer fee. The city of Knoxville also provided roughly $12.5 million in infrastructure funding across all three phases of development.

Building for the Future

First Creek at Austin has received awards from several organizations, including the Urban Land Institute, Affordable Housing Finance magazine, and the Tennessee Housing Development Agency, recognizing its quality and innovation. The revitalization has brought more affordable housing units to the site and has kept the oldest of the revitalized units fully leased since they became available 3 years ago. The redevelopment has expanded the central Knoxville housing supply, preserving affordability and contributing to the economic revitalization of the surrounding neighborhood.