Collier’s Challenge

Collier’s Challenge

Exploring the “How” of Mixed-Income Housing Development

Since 2020 the phrase “We can do hard things.” has been on repeat. Easy to say, but those who walk headfirst toward the most intractable of issues will tell you – doing hard things is…hard. 

Ethan Collier grew up in Chattanooga and has been developing homes for more than 20 years. His company, Collier Construction, is a pioneer, tackling green building and infill development long before other developers even warmed to the idea. Adding to their expertise, Collier Construction was the first company to figure out how to safely build homes atop remediated brownfields, a concept others considered impossible. Now, Collier is in the midst of the most difficult challenge of his career: creating a mixed income neighborhood. 

On its face, this might seem simple, but consider for a moment if you’ve ever actually walked the streets of a mixed income neighborhood. On urban streets in older neighborhoods you’ll  notice that small houses were built alongside bigger ones. Small format apartment homes blend in with single family. Neighborhoods decades ago were built to accommodate different incomes and family sizes. This doesn’t happen now due to zoning as well as profitability. Profitability models and R-1 zoning preferences mean that developers almost always build the biggest home possible to maximize their return. This creates a homogeneity of incomes in the area. 

The Art of the Possible

Mill Town sits in a strangely desolate part of the city. The Standard Coosa Thatcher Mill was the major employer in this neighborhood from 1916 until the 1970s. More than 2,000 people worked in the mill and lived around it in the Ridgeside neighborhood. But after the mill closed, neighborhood investment evaporated. Homes sat vacant and condemned, fields overgrew their fencing. All this just blocks off major thoroughfares – Dodds Avenue, Main Street, and E 23rd street.  

Collier’s vision is for Mill Town to combine new construction, revitalized existing housing, and the mill building to create a diverse, equitable, sustainable community in Chattanooga’s East Side. Big ideas like these are expensive, and Collier knew the numbers were stacked against him. He found help and shared ideals at Benwood Foundation. Together they crafted a novel finance package: Benwood would make a $2m Mission Related Investment with the requirement that 20 percent of the homes in the first land acquisition would serve people making 80 percent or less of area median income. Chattanooga Neighborhood Enterprise (CNE), which has decades of experience in nonprofit affordable housing development joined the project as Collier Construction’s nonprofit partner. 

Jeff Pfitzer, program officer at Benwood, considers the project an exploration of “the art of the possible.” “We went into this with curiosity of how a private developer and a nonprofit mixed income developer could work together with equitable, mixed-income housing as a main principle of development,” Pfitzer says. 

The Harsh Light of Day

Collier, Benwood, and CNE share a vision and value for equitable development and community renewal, and they’re learning a lot about how the uniqueness of each organization colors their expectations and capabilities. 

“Our goal is to develop a model for equitable development that coordinates private and nonprofit investment,” explains Martina Guilfoil, Chief Executive Officer for CNE. “Working on Mill Town has helped us better understand the massive responsibility Collier carries as a private developer. Time is money for them, and things change fast. As a nonprofit developer, we cannot move as quickly, but we can help developers understand the affordable housing business model and what it takes to make the numbers work.”

The partners also brought different perspectives on what equitable representation within the Mill Town development means. Collier’s market-driven practicality led him to favor affordable housing on the edges of the neighborhood, serving as a buffer to the existing neighborhood. Benwood and CNE have always worked to support healthy urban neighborhoods, and healthy neighborhoods benefit from mixed-income affordable housing that is integrated into the fabric of the community. 

“The most important thing has been that we are 100 percent aligned in our values,” Collier says, “This keeps us committed to solving the problems that inevitably arise in a project like this whenever they arise.” 

Securing the financing and working with partners has proved to be one of the more surmountable challenges Collier faces with Mill Town. He knew the land was contaminated, but he couldn’t have anticipated the COVID-19 pandemic…or the extreme cost increases that have followed. 

With rising construction costs and the fixed rent rates for the affordable units, the finances for building the affordable units became an increasingly difficult challenge. It took a significant commitment of subsidy from the City and Benwood, alongside the land that Collier donated, to make building the affordable housing viable. In the end it was once again a strong and committed partnership that rose to the occasion to keep the project moving forward. CNE hopes to break ground on the first affordable units this fall.

The project is still surrounded by a very poor and neglected neighborhood. The streets are in disrepair and sidewalks are virtually non-existent. Collier has removed a lot of blight and demolished some condemned houses at his own expense but there is much work left to be done to improve the surrounding area for the residents who have long lived in the area on limited means – this means much more opportunity for partnerships.

The Next Build

Mill Town today is bustling with construction activity and homes are on the market. Already, the partners are reflecting on what they’ve learned and how they’ll move forward. 

“I don’t anticipate that any other developer will use the exact Mill Town finance and partnership approach, but I know we are much closer to a sustainable model for private/nonprofit mixed income development than ever before,” Collier says. “It’s important to me that as a developer I figure out how to develop without displacing poor people. It’s the right thing to do.”

Looking toward the future, he points out that right now, private development of affordable housing doesn’t happen without compassion and conviction on the part of the developer – and that’s not what makes the economy hum. 

“As a culture we don’t rely on people’s good intentions to protect our watersheds or air,” he says. “Something has to make developers want to do this. It has to be easier to get entitlements for affordable housing and the projects must be more lucrative. Shareholders are looking for big returns.”

Guilfoil agrees that private developers need additional incentives, such as density bonuses for projects with extra affordable units, but she still holds on to the idealism she brought to the partnership. 

“There’s a way developers can make money and participate in solutions to provide affordable housing. The question is, do we want a city for all of us or for some of us?”

Explore Mill Town at

To learn more about affordable housing, check out CNE’s guide “What is Affordable Housing?”