Atlanta Mayor Shirley Franklin deflected credit or congratulations on getting both a 3 mills property tax increase and the 2010 fiscal year budget passed by the Atlanta City Council today.

“It’s good for the city,” said Franklin in a wide-ranging phone interview this afternoon. “It’s our job to do what’s best for the city longterm.”

Had the budget and property tax increase not passed, the mayor said the city would have had to continue furloughs of employees, and it would have had to drastically reduce funding for parks and public works.

Because the city has already cut $125 million out of its budget, Franklin said the city has been operating in a skeletal form.

The city still faces other major budget issues, such as fulfilling its pension obligations to retired employees. the mayor and council are seeking outside expertise to understand the city’s option when it comes to the pensions for new employees.

The passing of the budget and the property tax increase will give the mayor a bit of breather for her last seven months in office.

But Franklin said that was not the way she looked at it.

“This was a tough year for the city, and we will end this fiscal year in the black,” she said. “It’s been the hardest year with the financial crisis.”

Most of the city’s financial issues (but she quickly added that not all) are a result of external factors — the economy with a drop in sales taxes and property values. Not only will the fiscal year that ends tomorrow be in the black, but the new budget for 2010 also is projected to at least break even.

“There are predictions that we will be out of a recession in 2010 and that governments will see a turnaround in revenue in 2011,” Franklin said.

Either way, a new mayor will be in office.

As one observer, who prefers to not be quoted publicly, said: “The next mayor should thank Shirley Franklin for what happened today.”

The Atlanta Committee for Progress plans to keep going — at least until a new mayor is elected.

The committee, which was put together in 2003 by Atlanta Mayor Shirley Franklin, includes the top CEOs in the metro region who serve as a kitchen cabinet to help the city implement its priorities and work through its challenges.

The committee met this morning for its quarterly meeting at the World Trade Center. The mayor had to leave right after the meeting to monitor the Atlanta City Council votes for a mil increase and for the city’s budget.

But ACP Chairman Jim Wells, CEO of SunTrust Bank, said after the meeting that the organization remains engaged by helping Franklin push forward her top priorities.

The question is whether the next mayor will want to continue the Atlanta Committee for Progress or create his or own organization to interface with the business community.

“It’s one of those things that if it’s desired to be a useful part of the process, we are willing,” Wells said. “But we are not looking for work.”

Then speaking for Franklin, Wells said: ‘I think the mayor would say it’s been highly effective for her.”

Wells said the committee has enough funding to continue through the end of the year. At that time, a new mayor will have been elected, and the group will know whether it should re-up its commitment.

New board members continue to join the committee. Among the newest are; Larry Gellerstedt, who becomes CEO of Cousins Properties this week; Jimmy Hayes, CEO of Cox Enterprises; Georgia Tech President Bud Peterson and developer Ray Weeks, who has been instrumental in the development of the Atlanta Beltline Partnership.

Other new members include: Mark Becker, president of Georgia State University; Darryl Harmon, Southeast regional president for Wells Fargo (the new parent company of Wachovia); and Coca-Cola CEO Muhtar Kent.

“The organization and the people on the organization think it’s been a wonderful thing that has happened,” Wells said of ACP. “If we assume that ACP continues, we will be concerned about the things you would expect us to be concerned about.”

Governance.

Even in the best of times, finding the right governance to address a problem in a fair and representative way is a tricky task.

It is just that exercise that the Atlanta Regional Transit Implementation Board has been wrestling with for the past several months.

What would be the most balanced way to oversee transit development in the 12-county Atlanta region, if and when a new funding source is passed.

The effort has been a valiant one. County commission chairs have been working with MARTA, the Georgia Regional Transportation Authority (GRTA), the Georgia Department of Transportation, the governor’s office and the Atlanta Regional Commission to design a governance board to implement a regional transit system.

Remember MARTA was supposed to have been a regional transit body, but only the city of Atlanta, Fulton and DeKalb counties approved a one-cent sales tax nearly four decades ago to build out a rapid rail network with a connecting bus system.

As metro Atlanta has grown, the limits of a truncated transit system has become more pronounced. We’ve had a region that has continued to sprawl with an unhealthy dependence on single-occupancy vehicles to get from one place to another.

A few years ago, the ARC and the various transportation entities formed the Transit Planning Board, which developed a regional transit plan that mapped out a fully developed system with an extensive system of light rail, commuter rail, express buses and other transit modes to serve a 12-county region.

Amazingly, there was consensus among the urban, suburban and exurban elected leaders that we needed regional transit system.

Since then, the TPB has morphed into an implementation board (ARTIB), and the challenge has been to come up with a governance structure to oversee the development of transit in our region.

It’s a balancing act to make sure every one feels well represented. At a board meeting last week, a basic structure is taking shape.

After doing a thorough examination of other regional transit systems, metro Atlanta leaders have been modeling its governance after Chicago’s system. Under that model, there’s one over-arching transit authority which oversees the various transit agencies in the region. It is the one body that can go after federal transit dollars for the entire region.

As currently envisioned, the Atlanta version of the authority would include the chairs of the 12 counties currently with some kind of transit service as well as the mayor of Atlanta. The chairs of GRTA, GDOT and MARTA also would serve on the board.

There will be a pay-to-play provision, that in order ro have voting rights on the board, governments would have to be contributing funds to the regional transit pot.

The proposed structure calls for the governor to also have a voting member on the board. And if the state starts contributing funds for regional transit, it would have a greater voice on the board.

For the sake of fairness, the board also would have the option for representative voting based on a weighted vote to make sure the more populous urban counties are not outvoted by sparsely-populated exurban counties.

Any member can call for a weighted vote. A government with a population of 1 to 199,000 would get one weight; from 200,000 to 399,000 — two weights; 400,000 to 599,000 — three weights and 600,000 to 799,000 — four weights.

In such a vote, a resolution would have to have a simple majority of the board as well as the majority of a weighted vote.

The beauty of a true regional transit authority is that there could be real coordination between MARTA, Cobb County Transit, the Gwinnett Transit system, Clayton County transit and GRTA buses as it relates to fares, schedules, federal funding and economies of scale.

Ideally, as time goes on, there could be a way to collapse some of these various transit operators into one entity.

One idea that holds promise would be to merge MARTA and GRTA into one regional body. It also would be great if GDOT commuter rail initiatives could be incorporated into this new transit governance structure.

It’s been months of hard, agonizing work to create a transit body that would be able to offer services to the entire region; that would give voting power to the entities contributing to the transit system and that would be flexible enough to welcome more counties under its umbrella.

This whole exercise will be null and void if we can’t figure out a way to get new funds for transit in our region. What a shame it would be if all this hard work to find a harmonious transit solution among our region’s various governments and entities falters because we can’t figure out the funding piece.

Of course, the city of Atlanta, Fulton and DeKalb counties must be given credit and reward for having passed the MARTA sales tax in 1971. In my own mind, I don’t know the fairest way to acknowledge their contribution while at the same time raising enough money in the region to implement a transit system.

(Atlanta, Fulton and DeKalb have the penny sales tax for MARTA. State legislation for either a regional or statewide sales tax does not exempt those three jurisdictions, which means those areas would be paying two cents of sales tax for transportation).

Given cooperative attitude among our regional leaders at this moment in time, I believe there’s the spirit to find a balanced and fair solution for all involved. It is expected the ARTIB board will vote on the final governance structure at its August meeting.

What I do know is that the Transit Implementation Board can become a model of showing how a sensible governance in our state can work.

By Guest Columnist RAY CHRISTMAN, retired CEO of the FHLBank of Atlanta who
currently is involved in a variety of housing/banking-related consulting and civic activities, including the Peachtree Corridor Partnership, the ULI Terwilliger Center for Workforce Housing, and the Livable Communities Coalition.

While there are reasons to be optimistic that an economic recovery is beginning to take hold, both locally and nationally, the housing industry remains mired in a deep depression.

Despite the conventional wisdom that housing will rebound ahead of other sectors, it’s possible that the industry’s comeback will be protracted and anemic and, indeed, will be a drag on the overall recovery.

Moreover, it’s a sure bet that as the economy stabilizes, the housing industry – and the mortgage financing system that supports it – will function much differently than they have in the recent past.

It has become painfully obvious that the problems facing the housing and banking systems are deeply intertwined. And the changes affecting these symbiotic sectors aren’t merely cyclical, but are structural in nature, and will have long-lasting effects.

Mortgage credit will be more expensive and harder to obtain. In addition, more conservative bank lending practices, likely to be required by new regulations, and higher interest rates will impact housing demand.

To put this situation in perspective, there are today, according to the National Association of Homebuilders, 2.1 million excess houses on the market for sale or rent nationally – units that are vacant because of foreclosure or other reasons.

And the foreclosure tide has not yet abated; during the first three months of 2009, over 12 percent of all outstanding mortgages in the US were delinquent or in foreclosure. As unemployment has risen – nearly six million jobs have been lost since the recession began 18 months ago – even those with conventional, prime mortgages face mounting risk of foreclosure, creating further downward pressure on home prices.

As a result, the homebuilding industry is in freefall decline. Annual levels of new home starts nationally have fallen by 75 percent from over 1.5 million per year to just 360,000. And in the Atlanta region, new residential permits are projected to be a paltry 4,000 this year – a decline from over 60,000 only two years ago!

Meanwhile, another key driver of change will be the evolving demographic characteristics of American families.

The marketplace has already seen an increase in the number of seniors, single heads of households, and households without children, all of which are predicted to accelerate and all of which will impact the type, size, and cost of housing that people need and can afford, particularly for low income and workforce families who represent two-thirds of metro Atlanta’s population.

What this means is that a lasting recovery for the region’s housing industry must satisfy the demand and need for rental housing, smaller units in denser developments, and housing inside the Perimeter that is closer to job centers and public transportation.

It also means that we must contend with emptied urban neighborhoods and failed suburban subdivisions in need of complete redevelopment because of the foreclosure crisis. The response to this new paradigm will again eventually create jobs and help reinvigorate the housing industry, but the climb back to prosperity will be long and hard.

In order to engineer a successful recovery, the region must stand prepared to address three major challenges:

First, credit will be more difficult to obtain and will cost more, reducing the opportunities for homeownership for many families.

As banks eventually recover from this period, they will almost certainly apply more stringent underwriting standards and offer more limited and more conservative mortgage products than in the past.

Meanwhile, new regulatory proposals are being discussed regarding “suitability standards” around mortgage origination and requiring “risk retention” (i.e. some participation or continued ownership by lenders when selling mortgages to the secondary market).

And Fannie Mae and Freddie Mac – which own or guarantee over 70 percent of all mortgages being originated in the US today – are in public conservatorship, their futures uncertain.

The resulting combination of all these factors could result in fewer mortgage originations and home sales over time. Indeed, it would not be surprising to see the homeownership rate in the country decline from its recent all time high of over 69 percent to less than 65 percent over the next five years, which would translate into millions of fewer homeowners.

Second, American desires and needs for housing are rapidly changing, irrespective of the current housing decline.

It is projected that over the next 20 years that fewer than 20 percent of the households in the country will be comprised of the “traditional” nuclear family of two parents with children.

The implications for housing are profound particularly when combined with a desire among many of these households for shorter commutes from home to work and easy accessibility to amenities associated with urban lifestyles. This likely means more demand for multifamily housing (whether for sale or rent), smaller unit size, and housing in mixed-use settings.

Granted, suburban housing is not going to disappear. The suburban advantage has been measured by the availability of a bigger house on more land and access to better schools which will continue to be meaningful to many people.

But in a future likely characterized by gasoline prices at $4 a gallon or more, many other households, particularly those without school age children, will be searching for alternatives that reduce the time spent in a car and that provide other intangible benefits.

Third, the growing need to provide affordable housing to low-income and working class families will only grow.

Even during the last several decades of relative economic prosperity in this country, the gap between affordable housing need and availability continued to rise. It is now at risk of exploding into a national catastrophe. Why? Because of a toxic brew created by a bad economy, worsening exacerbating unemployment, decreasing public subsidies for affordable housing, and a foreclosure epidemic that has destroyed home values and reduced the quality of life in many neighborhoods.

As just one example, the principal national housing subsidy program for affordable housing in the United States – the Low Income Housing Tax Credit Program – will generate just half its normal production this year due to the fact that its traditional investor base, large financial institutions, are fewer in number, and the survivors largely unprofitable.

Also, Fannie Mae and Freddie Mac, in recent decades a primary source of affordable housing finance for communities and developers, are too crippled to provide meaningful support. That condition is unlikely to change in the near term.

The Obama administration and Congress have been working creatively to fill these gaps through stimulus funding and special programs directed toward acquiring and rehabbing foreclosed properties.

But the needs are enormous and outpace available resources. Moreover, the growing national deficit will make it harder, not easier, to access federal dollars for these purposes in the future.

Looking ahead, the solutions to these challenges will be determined in large part by market responses over time – by the homebuilding industry itself and by banks and other providers of mortgage financing as they address the new market environment.

But it wouldn’t be surprising in the years ahead to also see additional federal governmental actions to provide support through regulatory actions and through creating new housing incentives through the tax code.

The thorniest problem to address, however, will be the need for more affordable housing, not just for the poor but for policemen, firemen, hospital workers, retail employees, and thousands of other “workforce” families.

The reduced value of housing caused by the current downturn will not alone solve the affordability challenge of these households, particularly when balanced against rising mortgage rates and the desire to live in often more costly housing near job centers and near limited public transportation services.

Affordable and workforce housing almost always requires subsidy from some source. And federal dollars – the primary current source – are not likely to materially grow in the future. This means that local public and private leaders – government, business, and philanthropy –will need to find new, creative ways to expand opportunities.

With a few notable exceptions, such as the efforts of Atlanta Mayor Shirley Franklin, affordable housing has not been a priority on the regional and state agenda in the past.

But if the region’s housing industry is going to recover and thrive once again, it will need to take steps necessary to meet the changing needs of metro Atlanta’s working families.

An interesting juxtaposition occurred at Thursday’s Atlanta Regional Commission board meeting.

First, new urbanism planner Andrés Duany briefed the board about the Lifelong Communities projects that his firm — DPZ — has been conducting in the Atlanta Region. The goal has been to design communities that work best for the region’s aging population.

And then, Mike Alexander, ARC research division chief, presented the latest regional snapshot showing that the metro area’s population will top 8.3 million people by 2040, roughly an additional 3 million residents.

But most strikingly will be the age of those residents. In 2005, 8 percent of the 20-county region’s population was 65 or older. By 2040, 20 percent of the population will be 65 or older.

As Alexander said, the region will shift from being a place with a relatively young population to one that’s much older with more than 1.5 million people who are 65 or older.

“The boomers are going to age early,” Alexander said.

Those figures just reinforced Duany’s message to the ARC board about how to create communities that are friendlier people who can no longer drive yet still want to be contributing members of a community.

“You are pioneering,” said Dauny, who added that it’s important for communities to measure the cost of services for suburban sprawl. He credited the Atlanta region for being on the forefront of trying to design the future of communities by addressing the needs of its aging residents.

Duany also expressed great confidence in the fact that much of future developments will be market driven — creating communities where people want to live.

“New urbanism was market driven,” Duany said. “People wanted this.”

The biggest challenge will be to create zoning and land-use codes that will permit the development of mixed-use, pedestrian-oriented communities.

“We’ve been asked to level the playing field so it becomes legal,” said Duany, adding that current codes “make suburban sprawl easy and walkable difficult.”

For more information or a copy of the final charrette report: “Lifelong Communities: A Regional Guide to Growth and Longevity,” click here.

By Guest Columnist MIKE DOBBINS: a Georgia Tech professor of architecture and planning who also served as the city of Atlanta’s commissioner of planning, development and neighborhood conservation from 1996 to 2002. Dobbins also is author of a new book: ‘Urban Design and People.

The long way around might turn out to be the shortest – and the best. Maybe the state’s transportation program ought to first be based on a statewide strategy.

Then it ought to focus on where people do their most traveling – in and around cities and towns, where more and more of the state’s population lives; where congestion is highest and air quality lowest; in centers large and small, most of which have some kind of a transit system; places where a growing majority of the people – and thus votes – are concentrated, even in rural counties.

Markets are changing, and many of the state’s towns have historic and cultural charms that haven’t yet been destroyed, the kinds of bones that can attract the flesh of growing markets for closer in living, working, and shopping. These are features that most all of the state’s towns and cities share.

Finding these commonalities and their potential for widespread, town-centered grassroots support, though it might seem like the long way around, could actually put the state on the fast road to transportation sanity. And such a strategy could hold the key to stabilizing and growing the latent markets for town and city living, thus revitalization that benefits not just the towns and cities and their counties but the whole state.

While most of the roadway miles are in rural areas, most of the trips are concentrated in and around the town and city centers. The transportation strategy should treat these as two sets of problems, one to meet low volume but necessary distance travel needs and the other to support growth of high volume travel centers and corridors Where people travel the most should look and function the best, not the worst like so many of our abysmal endless commercial strips.

Take the Governor’s Road Improvement or GRIP program. It builds four lane roads for little traffic from the outskirts of one town to the outskirts of the next, maybe luring an occasional Wal-Mart or small industry.

What if, though, towns could take the same money and rebuild mainstreets as really high quality, tree-lined boulevard, maybe with some planted medians, maybe as transit corridors, with wide, well-lit sidewalks. Aside from the life, work, and travel choice that such an approach offers, of course, vehicle miles traveled, thus costs and air pollution generators, start coming down, preparing the state for the kinds of shifts that will be inevitable as fossil fuels become scarcer and costlier.

Correspondingly, not just metro Atlanta, but all metros and most of their towns provide some level of transit service. Improving transit is the necessary adjunct for a transportation system to create and support centers, corridors, and towns that can capitalize on the market potential that their old centers provide.

Atlanta and other centers have seen a steady rise of “choice” riders to supplement systems’ transit dependent riders. The new demographics are showing a support base for choice in how to get there to go with choice in where and how to live and work.

Improving transit, making things better for the whole population, is a strategy that in the end will likely propel towns and cities faster down the track toward stabilization and reinvestment. People want to live in places where inevitable frictions are not magnified and exacerbated by visible and entrenched inequities.

Transportation investment generates private investment, and the more such investment is focused where most people are living, the greater the investment multiplier. Public infrastructure that responds to higher density travel needs is already attracting increasing private reinvestment both in Georgia and around the country, a trend most expect to accelerate coming out of the current development hiatus. With concerted advocacy, funding for such public investment could flow out of the national transportation reauthorization legislation that is taking form right now.

Shifting emphasis from rural roads to city and town travel needs, though, would require a systematic and insistently state-wide approach to multimodal travel. It would obviously take time and a lot of collaborative, mutually supportive hard work among the towns and metro organizations throughout the state.

But the time to start is now, since it is unlikely that current state leadership is up to doing anything useful to advance a sound transportation planning, management, and finance program until after the 2010 gubernatorial election, if then. And the third time is not likely to be a charm for the twice-failed Atlanta-centric, business community-driven pile driver approach to transportation reform.

So why not prepare, deliberately, inclusively, and in a technically sound way a program that will be ready for the 2011 legislative session? We need a program that clearly responds to statewide, town-based transportation needs, based on realizing the greatest potential private investment return on the public infrastructure investment. A program that could be coming into being even as the development recovery must have begun. 

For as long as I can remember, there’s always been tension between Atlanta and the rest of the state.

Some call it the two Georgias. Others say there are three, four or five Georgias. Whatever the number, it’s become increasingly apparent that these great divides are pulling our state apart — creating a disjointed and acrimonious environment that hurts every corner of Georgia.

Those divides were even more glaring in this past legislative session when different political agendas resulted in little getting done for either metro Atlanta or the rest of Georgia.

As a result several key business and civic leaders are strategizing about a big idea to unify the state through a multimillion dollar, multi-year initiative.

Last week, at a joint meeting of the boards of Central Atlanta Progress and the Atlanta Downtown Improvement District, about 40 leaders brainstormed on how to change the divisive dynamics that have plagued our state for decades.

CAP President A.J. Robinson saw the potential for a unified state when his organization championed the campaign to get a statewide referendum passed to help local communities to fully implement tax allocation districts.

The referendum passed, thanks largely to support that came from several other cities and towns throughout the state.

“There needs to be much more connectivity between Atlanta, the region and the rest of Georgia,” Robinson said. “The challenge is going to be to find areas of commonality and how we can find prosperity for the whole state.”

Otis White, founder of Civic Strategies, an Atlanta-based firm that analyzes trends among cities and states throughout the country, was particularly fascinated with this concept.

“To the best of my knowledge, nothing like this has ever been done,” White said. “I’m intrigued by the fact that it’s never been tried and Georgia could be the first. It could be something that’s successful and exciting.”

White said many states face similar tensions with their major cities, and few have recognized how economically interdependent they are.

“There are places where cities do get along better with their state,” White said, but most of those are states without a dominant urban area. “Where you have big cultural differences between a big city and the rest of the state, you have conflict. And that conflict tends to make it difficult for people to come together.”

That’s exactly what’s been happening in Georgia.

“You are going to have to change the scenario and lower the conflict between the big city and the rest of the state,” White said. He added that a logical place to begin is for urban Atlanta to reach out to suburban communities.

Then the Atlanta region can also seek to build bridges with the other cities in the state — such as Augusta, Columbus, Savannah, Macon, Gainesville, Rome, Valdosta, Athens, Albany, Brunswick among others.

“Somebody needs to go out and meet the leadership in these other cities,” White said. “It’s a matter of seeking understanding before you seek to be understood. It can’t be arrogant Atlanta telling the rest of the state what to do.”

Myles Smith, director of the Regional Atlanta Civic League who participated in last week’s meeting, said one idea would be to have “LINK” trips within Georgia. For the last 13 years, about 100 metro Atlanta leaders have been going to other cities in North America to gain insights on how other communities address their challenges.

Smith said there could be LINK trips to Savannah, Macon, Columbus and Augusta so metro Atlanta leaders could get to know their counterparts across the state.

“You would have a real campaign here to knit the state together,” Smith said.

Another proposal would be for the coalition for one Georgia to get pledges from people running for state offices that they will not pit one part of the state against the other. More importantly, before receiving financial support from top business leaders, people running for office would have to pledge to try to unify the state.

“It is about quality of life and thinking as a healthy state for the betterment of everybody,” Smith said. “We have to change the culture that exists.”

Joe Bankoff, president of the Woodruff Arts Center, recently brought up the need for a statewide initiative to get the state working together on quality of life issues, such as the environment, water, education and the arts. Bankoff got inspired to launch such an intitiave during the last LINK trip to Minneapolis-St. Paul. The state passed a sales tax for water, parks and the arts.

Other organizations interested in a One Georgia initiative include the Georgia Municipal Association and the Association County Commissioners Georgia.

Both organizations work with local governments from across the state.

“The legislature has declared war against localities in the state of Georgia with property taxes,” White said. “It’s not about getting things that cities want; it’s now about getting things that cities need. They are all struggling with some of the same issues.”

But White also isn’t sure that the divide is as deep as many think.

“I’m not convinced that there’s as much hostility outside the Atlanta area among the general population,” White said. “But there are a lot of angry people inside the legisture. I don’t think it’s gotten worst with people. I think it’s gotten worse with the legislature.”

Robinson said over the next 90 days, the plan will be to reach out to other organizations and business leaders to see if they want to participate in creating a One Georgia initiative.

“It might take a decade for there to be a cultural change,” Robinson said. “But we have to start somewhere. It may end up being a coalition, a campaign or an organization. We also are working on a priority list.”

At the end of the meeting, White said he was optimistic about the possibilities.

“The message was very  clear from the people in that room that they wanted to try to make this work,” White said. “They were enthusiastic.”

What we do know is that the status quo is not working because Georgia as divided as ever.

So let’s try a different approach — create a strategy that unifies our state, once and for all.