Atlanta Strikes $200M 'Game Changer' Affordable Housing Deal With Local Charities

Atlanta's affordable housing crisis is potentially getting a $200M boost, backed in part by major donations from charity groups, to help achieve Mayor Andre Dickens' goal of building or preserving 20,000 affordable housing units by 2030.

During a Tuesday morning press conference, Dickens and leaders of the Community Foundation for Greater Atlanta announced that the city and the nonprofit would each contribute $100M toward a proposed affordable housing opportunity fund. The Community Foundation's part was raised from donation commitments from the Robert W. Woodruff Foundation and the Joseph B. Whitehead Foundation, according to a press release. 

Atlanta's share would come in the form of a $100M bond that must be approved by the Atlanta City Council — where a measure was introduced this week, The Atlanta Journal-Constitution reported. The funds would go toward a variety of programs aimed at spurring the growth of affordable housing stock on city-owned land.

“Affordable housing has been central in my Administration and today’s announcement is a game changer in our ability to have projects keep pace with a rapidly evolving market,” Dickens said in the release.

The foundations are both philanthropic stalwarts in Atlanta founded by early Coca-Cola executives. The Whitehead Foundation had $67.8M in charitable disbursements in 2020, while the Woodruff Foundation had $156.7M, according to ProPublica's nonprofit database. The donations aren't contingent on the bond issue passing, a Community Foundation spokesperson said. 

The program comes as Atlanta and other major cities in the U.S. wrestle with a mounting housing crisis, with the nation facing a shortage of more than 2 million housing units. It is a crisis that goes beyond the borders of the city of Atlanta and has prompted Georgia Gov. Brian Kemp to roll out a program to encourage affordable housing development in rural parts of the state, the first such dedicated funds in the state's history.

Proponents call Atlanta's program, half-funded by philanthropic organizations, unique among major cities. If the city’s bond is passed, the public-nonprofit fund would go toward speeding up development of affordable housing on publicly owned land, preserving existing affordable units and securing funding for shovel-ready projects, according to the release. The Community Foundation’s funds would support low-cost loans and grants.

“The ultimate goal is really to work together to address and help really start chipping away at our city’s and our community’s significant affordable housing challenges with a real emphasis on how do we go more deeply affordable,” Community Foundation CEO Frank Fernandez told Bisnow in an interview Tuesday afternoon.

Fernandez said the program would address the toughest issues, such as housing for the homeless, those at risk of being displaced in gentrifying neighborhoods, the development of workforce housing at transit-oriented developments, and especially housing security for those earning between $30K and $35K a year who increasingly struggle to make rent in Atlanta.

“I would say the biggest need is for folks who are basically at 50% of area median income,” Fernandez said, adding that those households typically have to make trade-offs to pay rent, sacrificing food and healthcare. “Those are the folks who are having the biggest challenges around housing.”

The announcement comes the day after the mayor released his administration’s proposed $790M fiscal year 2024 budget, the largest in the city’s history, that has other provisions aimed at affordable housing, including $8M for the affordable housing trust fund, a 15% increase from 2023’s contributions.

The city’s proposed $100M bond isn't among the line items in the upcoming budget, a Dickens spokesperson said. Of the 20,000 units in Dickens' goal, developers have already delivered or are under construction with 5,700 units, per the mayor's office.

In February, the city entered into an agreement to purchase 2 Peachtree St., a 41-story office tower next to Underground Atlanta, for $39M with plans to transform it into a mixed-use development with an affordable housing component.

Margaret Stagmeier, the managing partner of Atlanta nonprofit TriStar Real Estate Investment, praised Dickens in an interview, calling Atlanta a standout among major cities in its efforts to address affordability.

Stagmeier, whose firm develops affordable housing complexes along with special services for residents and their families, said the housing opportunity bond proposal “will go a long way to attract more developers with funding to produce more affordable housing at all levels of the income scale.”

“I’m seeing the affordability issue in cities around the country, and Atlanta is leading the charge and setting the example,” she added.