I like the idea, but I'm not sure the money's quite enough motivation for most techies - I think the offer would be more appealing if it was sweetened with free co-working space, tech classes, or something similar.
For reference, here is a Zillow link that shows all the 3 bed/2 bath houses built since 1900 in the area shown on their map - I'm not sure that all of these are in the neighborhoods to be revitalized. The prices seem pretty reasonable to me (I live in Austin, TX which also has no state income tax) - homes in the $50,000 to $250,000 range.
The way the payout is structured, it's effectively $3,333/year for three years plus a one-time $1,250 payment. That's not enough for any developers I know to uproot and effectively move out of their professional/personal networks.
Anyone here live in Chattanooga?