Knoxville Faces Critical Housing Shortage as Demand Surges

Knoxville Faces Critical Housing Shortage as Demand Surges for Affordable Options

The Knoxville metro area is facing a significant housing shortage, requiring approximately 10,536 homes to meet current demand according to data from the National Association of Realtors and Realtor.com. This shortage does not consider potential population growth, further emphasizing the urgency of the situation. The demand for housing spans across nine counties, including Anderson, Blount, Campbell, Grainger, Knox, Loudon, Morgan, Roane, and Union.

Among those advocating for solutions to this crisis is Yes! Knoxville, a grassroots organization dedicated to increasing affordable housing options and improving community infrastructure in the city. The organization emphasizes the importance of diverse housing types to cater to the community’s needs, including duplexes and townhomes, rather than solely focusing on single-family homes.

Current Housing Landscape

While Knoxville’s housing inventory has an oversupply of large single-family homes, many local residents find them unaffordable. As a result, essential workers, including teachers, firefighters, and police officers, are struggling to find suitable housing within their means. This gap in affordable options is pressing, particularly for the younger population, who are striving for homeownership but face financial barriers.

Outdated zoning regulations are identified as a significant hindrance to creating more varied housing options. By promoting the construction of what’s described as “missing middle” housing, organizations like Yes! Knoxville aim to address this shortage effectively. Initiatives such as First Creek at Austin, a new mixed-income development, highlight steps being taken toward improving the situation.

First Creek at Austin Development

First Creek at Austin, located on Summit Hill Drive and Martin Luther King Jr. Avenue, is positioned conveniently within walking distance of downtown Knoxville and local schools. This development, which began construction in response to the demolition of the former Austin Homes in 2020, is set to provide a total of 445 affordable housing units by late 2025. The final phase of the project will include approximately 160 units, with 50 supportive housing units designated for low-income seniors aged 62 and older.

The first phase of the project, completed in November 2021, featured 105 units that are currently fully leased. The second phase will yield 180 units, of which 99 have been leased, with ongoing leasing for the remaining 81 units. Anticipated leasing for the third phase is projected to commence in winter 2025-26, assuming construction timelines are met.

Future Projections and Challenges

Looking ahead, Knox County’s population is expected to grow by approximately 80,000 residents between 2024 and 2045. This growth indicates a projected housing deficit of between 6,000 to 8,000 units that must be constructed by 2029 to meet demand. With rising rent prices—anticipated to increase by 3.1% in 2024, averaging around $1,487 per month—knocks further emphasize the critical need for both affordable housing and diverse options to accommodate varying income levels.

The housing market in Knoxville reflects urgency as prices surged by 17% in 2022 and 7.7% in 2023, driven by heightened demand. The collaborative efforts by community organizations and developers are crucial to ensure that future housing initiatives accommodate the growing population while addressing the current gaps in affordable options. Without timely action, many residents may continue to struggle with accessing adequate housing within a rapidly evolving market.