Atlanta To Launch Even Bigger Affordable Housing Fund, City Official Says
Atlanta Mayor Andre Dickens is planning to launch a second affordable housing fund to help spur a more rapid increase in the supply of affordable housing, a senior city official said last week during Bisnow's Atlanta Multifamily Conference.
“You will see us move to do another affordable housing fund in relatively short order,” Dickens senior adviser and Chief Policy Officer Courtney English said Thursday at the Hyatt Regency Atlanta. “We did $100M. It’ll be a lot larger this time to help meet the needs that these projects have as they come up.
“The mayor has a goal of building and preserving 20,000 units of affordable housing in eight years. That’s about a $7B problem. The overwhelming majority of that will be provided by the market, but that still leaves a significant gap that the public sector has to figure out.”
Last year, the Atlanta City Council passed a $100M bond for new affordable housing development and other incentives to help low-income renters. That funding is coupled with $100M in donation commitments from the Robert W. Woodruff Foundation and the Joseph B. Whitehead Foundation to the city and the nonprofit Community Foundation of Greater Atlanta.
The funding fueled the city’s affordable housing trust fund, now totaling $374M, which English said “is going to be deployed immediately to get housing out of the ground.”
“The more housing we build, the more prices go [down], and it’s good for everybody,” he said.
Atlanta Housing CEO Terri Lee also said the city will be ramping up development of affordable housing projects on publicly owned land as the mayor pushes toward his goal of 20,000 new and preserved affordable units by 2030.
Lee said the housing authority has master development agreements and requests for proposals out that would ultimately transform 250 acres of housing authority land into 4,000 housing units in the next five years, with 35% of that stock reserved for lower-income renters.
Atlanta Housing has already named a master developer and is funding the redevelopment of more than 70 acres of the former Bowen Homes, one of the city’s more notorious public housing projects that was known for its crime before it was razed to make way for redevelopment.
The $500M project is slated to add 2,000 new units on Atlanta’s Westside, which Lee said “will be a catalyst to impacting the economic development need along that corridor.”
Atlanta Housing also launched a second phase of the Herndon Square redevelopment, a 12-acre project along Northside Drive just north of the Georgia Aquarium that will add 379 apartment units, 32 townhouses and 30K SF of retail space. A 97-unit senior housing project there closed its waitlist due to demand, according to the developer.
“Housing affordability in and of itself is a supply and demand issue. And simply put, we need to build more housing. We have not done that … since the end of the Great Recession,” English said. “We have to not only build more housing, but we have to increase our capacity and speed at which we do so.”
Developers are also addressing ways to make market-rate apartments more affordable, especially as construction costs remain elevated and borrowing costs have skyrocketed. Panelists said builders are reducing costs with smaller apartment units, relying on more energy-efficient features and cutting back on expensive amenities.
“We're going to focus on how to create a desirable living environment inside of the home and at the ground level, but we're not going to continue to fight the amenity war on doing the kind of wine rooms and pool table rooms and big kind of areas,” Jamestown Vice President Alexandra Kirk said.
Kirk said Jamestown’s Scout Living development at Ponce City Market worked with a vendor to furnish the apartment units to help keep costs down and rents lower.
Fifth Dimension Architecture & Interiors President Dan Fritts said he is seeing contractors and developers reducing their fees to help spur projects delayed by the Federal Reserve’s aggressive rate hikes.
“A lot of the starts predicated on both the contractor and the developer reducing their fees. It's getting the deal done, but it also helped keep those employees on the job,” Fritts said. “Doing these projects at a lower profitability may not result in an overall profitability for the company, but at least people aren't losing their jobs.”
