Downtown Atlanta explores housing options
Affordable housing is a hot topic throughout metro Atlanta, and the city’s downtown is a large part of the conversation.
“Affordability is kind of at the top of mind for everyone in Atlanta,” said Alena Green, project manager of economic development for Central Atlanta Progress and the Atlanta Downtown Improvement District. “What we’re seeing as our city grows is a need for housing types at all income levels rather than just a certain income [level]. I think our other submarkets, like Midtown and Buckhead have seen quite a flurry of activity from developers, building multi-family. The desire is for that activity to move further south and really come to Downtown Atlanta in a big way.”
Green’s office just completed a year-long master planning process for the community, and the No. 1 thing they heard from stakeholders was a desire for more residential opportunities downtown.
In 2015, four city agencies – Invest Atlanta, the Atlanta Housing Authority, the city of Atlanta and Atlanta BeltLine Inc. – created an affordable housing strategy to increase affordability throughout the city and help existing residents remain in their homes. The agencies set the following goals to occur by 2020:
· Reduce the number of Atlanta low- and moderate-income households paying more than 30 percent of their income for housing by 10 percent.
· Produce or rehabilitate 10,000 sustainable residential units for a range of incomes, doubling the current rate of production, in redeveloping communities and job-rich areas.
· Reduce the number of vacant, blighted homes by 20 percent.
The economics for an urban center like downtown Atlanta have been challenging, said Green. “We don’t have a ton of vacant land in our downtown remaining,” she added, which means developers are not as drawn to the area.
To attract quality real estate for residents at different income levels, Invest Atlanta uses different economic development tools such as tax-exempt bond financing, housing opportunity bond financing, homebuyer loans and grants, and lease-to-own programs. These economic incentives should help spur new development projects, said Dr. Eloisa Klementich, president and CEO of Invest Atlanta.
“This includes mixed-use developments to provide affordable housing, retail, office space and other amenities in the areas,” she said. “Increasing mobility – such as providing housing near MARTA rail and buses as well as the streetcar – is a cornerstone of these efforts to foster development that allows working professionals and families to live near job centers [such as] the downtown office district.”
Some incentives come from other entities, said Bruce Gallman of Gallman Development Group.
“We are doing a historic adaptive re-use project, which has been approved by the State Historic Preservation Office,” he said, adding that the tax credit available from the state and federal government for his team’s project “is a wonderful way to incentivize developers.”
Other incentives the city could use are partial tax abatements or partial grant per unit to make up the difference in what would likely be a $100,000-per-unit financing situation, said developer Chuck Young, senior vice president at Prestwick Development.
“I think in an ideal world, you’d be able to go down to the city permit office and say, ‘I’m going to be doing X number of units for affordable housing,’ and you are just automatically awarded incentives that help you make up that $100,000-per-unit gap,” he said.
But the city does not use incentives as wisely as it should, according to Kip Dunlap, former president of the Downtown Neighborhood Association.
Dunlap called downtown Atlanta, in comparison to Midtown and Buckhead, “really kind of a dead zone” for residential. “There are some fun things and some fun establishments, but they really cater to the night spot, office crowd and tourist.”
If the city wants people to call downtown Atlanta home, he added, planners and developers need also to consider what residents need. So the cycle continues, Dunlap said. “There’s not enough grocery opportunities or every day retail [stores], not really restaurants at affordable price points,” hes said. “It’s a chicken-and-egg problem, because we’re not going to get those things until the residential community can support them.”