The decision by Dominion Group on Tuesday to pull the plug on an affordable housing project planned for the prosperous Choto area in the face of opposition from neighbors could have ramifications far beyond Southwest Knox County.

Affordable housing advocates are concerned other communities will use similar strategies in the future.

The firm had planned to build a 56-townhouse development called Choto Landing on nearly a dozen acres on Northshore Drive that would have provided three- and four-bedroom homes for low- to middle-income families. The $24.7 million project would have been financed by a combination of loans and subsidies to make the units affordable.

Area residents organized in opposition to the proposal, launching two websites, hiring an Arizona-based public relations company, flooding the Planning Commission with comments, and threatening lawsuits. 

Dominion Group blinked.

“Dominion Group has decided not to further pursue the development previously planned for the Choto community,” Peter Hall, the firm’s president, said in a statement on Tuesday. “We are evaluating possible alternative sites that are in high-opportunity areas offering access to quality amenities and education that will facilitate economic mobility for residents.”

Opponents, whose objections included an insistence that affordable housing was not appropriate for the area, embraced the firm’s decision.

“Dominion Group’s recent announcement to withdraw its application for Choto Landing marks a significant triumph for the residents of Knox County, underscoring the power of a united community,” the opposition group Neighbors of Knoxville said in a statement.

Knox County is in the midst of a housing crisis, with the lack of affordable housing a particular concern. 

According to East Tennessee Realtors, a family needs a household income of about $110,000 — nearly 75 percent higher than the county’s median income level — to afford the median-price house of $350,000. Rents have risen nearly 10 percent over the past year, more than four times the national average, and the overall occupancy rate is above 96 percent.

The result of the Choto Landing effort could have an impact on future affordable housing initiatives elsewhere in the county. The residents of the Choto community have provided a blueprint for other neighborhood groups to emulate.

“Community input is good, but you’ve got to strike a balance between the immediate neighborhood interests and the broader community and regional interests. That’s the question we have to wrestle with,” said Ben Bentley, executive director and CEO of Knoxville’s Community Development Corp., which was involved in the financing for Choto Landing.

The Proposal

Choto Landing was planned for an 11.65-acre parcel at 12320 S. Northshore Drive, northeast of the roundabout at Choto Road. The property is owned by Wilko LLC, a subsidiary of Wilson Construction & Properties in Fountain City. 

Wilko bought the tract in December 2021 for $2 million. In February of this year, Dominion Group took out an option to purchase the property for $3 million and was putting together the complex financing plan typical of affordable housing developments.

Dominion Group had submitted a development plan for the project with the Knoxville-Knox County Planning Commission for consideration at its meeting on Thursday. 

The proposal for 56 townhouse units on the property was consistent with the existing Planned Residential zoning, which was adopted in 202o with scant opposition. Planning commissioners unanimously approved a similar plan for a market-rate townhouse development last year over some pushback from area residents, but the project wasn’t built.

According to the application, Dominion Group planned 14 two-story buildings, each with four units, plus a clubhouse and a playground. 

In addition to complying with the property’s zoning requirements, the plan aligned with the general and sector plans. Because the Planning Commission is not supposed to consider factors such as financing or the economic status of the intended residents, approval was virtually assured.

“We look at land use. Period,” said Tasha Blakney, the Planning Commission’s attorney. 

Approval would have come with conditions. 

Thanks to rapid development in Southwest Knox County, South Northshore Drive is heavily traveled and often backs up around the Choto Road intersection. 

Heavy traffic in fast-growing areas is not unique to the Choto area, as residents in Hardin Valley can attest. Often, the Planning Commission requires developers to make road improvements, and the Dominion Group had agreed to share the cost of adding a turn lane to South Northshore Drive at the entrance to Choto Landing. 

Another common concern is flooding created or exacerbated by new developments, so the Planning Commission typically requires developers to include stormwater management plans that must be approved by Knox County Engineering & Public Works. That, too, was a condition placed on Choto Landing.

Financing for affordable housing projects is complicated to assemble. Because most construction costs such as materials, labor, land and site preparation are the same for projects of similar size regardless of the economic status of the prospective tenants, affordable housing developers must rely on subsidies to make the financing work.

Dominion Group put together a package that included low-income housing tax credits, federal grant funding and a 15-year payment-in-lieu-of-tax agreement with Knox County, in addition to a construction loan. The budget for the project was $24.7 million. 

Choto Landing would have been marketed to households using Section 8 housing vouchers, but eligible families wouldn’t necessarily be impoverished. The income limit for a family of four would have been $69,190, which is higher than the Knox County median household income of $62,911. 

Starting annual pay for a Knox County Sheriff’s deputy is $51,100, and newly minted teachers in Knox County Schools start out at $44,800. A couple with each partner making $15 an hour would earn $63,000 a year — still within the range to qualify for Choto Landing if they have two children.

“These are people we need in West Knoxville — we need people to work in our restaurants and teach in our schools.” said Mary Groh, who serves on the board of directors for Justice Knox, a faith-based social justice advocacy group that promotes affordable housing. “During the pandemic, we called them essential; now they’re expendable.”

The Opposition 

Choto, wedged between Farragut and the Tennessee River and running west of Concord Park to the Loudon County line, used to be mostly farmland, but rapid growth in Southwest Knox County has filled much of the land with high-value subdivisions. 

Most of the subdivision development in recent years has occurred in the northern part of the area off Northshore Drive and Choto Road. According to the U.S. Census, the population of Choto grew from 4,824 to 7,846 between 2010 and 2020, a 62.6 percent increase.

As word spread in the community about the plans for Choto Landing, many residents organized opposition. Two websites — Neighborsofknoxville.org and Chotolanding.com — sprang up with information about the project and petitions for residents to sign. The groups encouraged people to submit comments to the Planning Commission (more than 300 did so) and contact elected officials. 

Not insignificantly, the opponents threatened legal action should the project gain approval and were already raising funds to pay for representation.

The objections included heavy traffic and increased flooding, which are common concerns about developments in the county and typically addressed, as they would have been in this instance, with road improvements and a county-approved stormwater plan.

But many of the comments sent to the Planning Commission also said affordable housing would not fit into the upscale fabric of the area, where the median sales price for a home is around $635,000 and the median household income is $113,475. 

Some residents expressed concern that the development would lower nearby property values and raised the specter of increased crime, occasionally confusing affordable housing with public housing communities. 

“The development of this project will reduce the value of homes in the area, and increase crime for the hundreds of families that have moved specifically to the region for safety and good educational opportunities for their kids,” wrote a resident named Jeremiah. (The Planning Commission does not post last names with online comments.)

A resident named Sandy wrote, “There are no stores, shopping, buses, school buses … that serve this area. We go 15 minutes to stores, hospitals and shopping. From experience I know what it’s like to live near Low Income Section 8 Housing and I can share my experiences with the committee. Gangs, violence, robbery and death was the experience I encountered. I invited the Mayor to chat about how life is living near ‘The Projects.’" 

Other comments assumed residents would be unable to afford a car, despite income limits that would allow families making more than the Knox County median income to live there.

“This is a ridiculous waste of taxpayer money,” wrote a resident named Seth. “Why put government assisted high density housing in an area that has nothing but nice lake homes with ultra high property values, no public transportation, no jobs nearby on already crowded roads and school systems.” 

Ron wrote, “There is a need for affordable housing in Knoxville, but this project does not conform or make any sense with the surrounding area. One can only assume affordable housing needs public transportation (which is not available in this area) and / or walkable access (which is also not available). This type of project would be better served in a more urban style area, than a rural area as Northshore and Choto Rd.” 

One of the opposition organizations, Neighbors of Knoxville, hired America First PR to help make their case. The firm, which bills itself as “America’s #1 Anti-Woke PR Firm,” is owned by Melissa Rein Lively, who has made news in the past in her own right.

Lively gained notoriety in 2020 when she took video of herself wrecking a display of COVID-19 masks in a Target store and posted it online. She claimed she was under the influence of QAnon, the loose confederation of conspiracy theories that center on the belief that a secret cabal of cannibals engaged in global sex trafficking are plotting against former President Donald Trump.

Lively has since renounced QAnon but has used her experience to promote her agency.

The opposition groups viewed Dominion Group’s decision as a grass-roots victory. The Neighbors of Knoxville statement expressed appreciation for the firm’s “commitment to responsible development” and respect for Choto residents.

“This collective achievement serves as a testament to the incredible results that can be attained when a community comes together with a shared purpose,” the news release stated.

The Future

Supporters of building more affordable housing in Knox County were disappointed with the outcome and with the ferocity of the opposition.

“I saw the negative, vitriolic comments,” said Groh, the Justice Knox board member. “It saddens me to see so much energy directed at blocking people who need housing.” 

Planning Commissioner Logan Higgins said he detected an undercurrent of racism in some of the opponents’ comments about having low-income neighbors.

“I think the use of bullying and threats is inappropriate no matter what the request is for,” he said. “I also think using racist and classist rhetoric does not reflect our community and should never influence the community’s growth.”

The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, disability, familial status (children under 18 living with a parent or guardian), or national origin. The U.S. Department of Housing and Urban Development and the Civil Rights Division of the Justice Department have issued guidelines to local governments on compliance with the law.

“When enacting or applying zoning or land use laws, state and local governments may not act because of the fears, prejudices, stereotypes, or unsubstantiated assumptions that community members may have about current or prospective residents because of the residents’ protected characteristics,” the guidance reads.

“For example,” the guidance continues, “a city may not deny zoning approval for a low-income housing development that meets all zoning and land use requirements because the development may house residents of a particular protected class or classes whose presence, the community fears, will increase crime and lower property values in the surrounding neighborhood.”

Violations can occur even when there is no discriminatory intent, according to the agencies.

Knox County Mayor Glenn Jacobs wrote a letter of support for the project’s application for low-income housing tax credits to the Tennessee Housing Development Agency, but his office downplayed its significance after Dominion Group’s decision.

“DGA Residential has a strong history of developing affordable housing, and I am excited that this project will be sited in an area of the County that is typically out of financial reach for most of our limited income residents,” Jacobs wrote to THDA. 

On Tuesday, however, Knox County Communications Director Mike Donila said Jacobs’ letter was perfunctory and solely intended to keep litigation at bay.

“He wants us to keep from getting sued in federal court under the Fair Housing Act,” he said. “The mayor’s never said whether he supported or didn’t support that particular project.”

In a statement, Hall, the Dominion Group president, said the firm would look for other sites for its projects. 

“Dominion Group remains committed to developing affordable housing and appreciates the individuals and organizations that support this cause in every community,” he said.

Rumors have spread that a Choto resident or residents plan to buy Dominion Group’s option or acquire the property directly from Wilko, but Dominion Group has declined to comment beyond its statement and Wilko founder William S. Wilson III did not return a phone call seeking comment. 

Groh said other communities could follow the same strategy as the Choto residents to block similar projects, making it more important for Justice Knox and other affordable housing advocates to work harder.

 “We need to double up our efforts to let people know this is needed,” she said. “We’re in a crisis. It’s not just in the city; it’s in the county as well.”