KNOXVILLE, Tenn. (WATE) — Knoxville City Council voted to approve the first hearing of their annual budget Tuesday.

The budget includes $4.2 million for improving Western Heights. The neighborhood is the Knoxville Community Development Corporation’s (KCDC) largest affordable housing property.

KCDC was awarded a $40 million U.S. Housing and Development grant to put toward improving Western Heights’ affordable housing, with the city investing an additional $26.5 million over several fiscal years.

“This year’s budget is $4.2 million towards transforming Western Heights, we’re going to have a wonderful destination park there, and our financial commitment is going to be, not to build the housing, that’s something that KCDC is going to take the lead on but to improve the infrastructure,” said Knoxville Mayor Indya Kincannon.

Ben Bentley is the CEO of KCDC.

“The existing housing over there is 40’s, 50’s vintage, you’ve got to replace the utilities, you’ve got to do stormwater and sewer, relocation of electricity, sidewalks, lighting, all the stuff that makes for a great safe neighborhood, that’s what the $4.2 million’s going to go toward,” Bentley said.

He added the need for housing is dire in Knoxville.

“Housing markets are tight across the country, but we really stopped building houses in 2008 after the economic crisis, didn’t start back until 2015, 2016, people continued to move to Knoxville, old houses became obsolete and so it created a real housing crunch,” he said.

Kincannon hopes the investment into Western Heights will lessen the housing issue.

“Transforming Western Heights is a priority for our city because we need more housing and we especially need more affordable housing. The Beaumont, Western Heights community is a wonderful neighborhood with many great people, and we working with KCDC asked them what they are looking for in their community,” Kincannon said.

The funds proposed for Western Heights are one of the highest amounts in the budget, following $9.3 million for road repairs and $4.5 million for a multi-use public stadium near the Old City.

The second reading of the budget will be at the city council meeting on May 30.