Incentives proposed to preserve affordability of homes, shops along BeltLine

Note to readers: This is the first of two stories about affordability along the Atlanta BeltLine. Coming Monday: Skyrocketing housing prices along BeltLine.

By David Pendered

Rising land values along portions of the Atlanta BeltLine have resulted in steep price hikes for existing tenants of homes and businesses, forcing some to relocate. A new proposal aims to preserve the affordability of now-blighted areas as they are redeveloped.

Atlanta City Councilmember Michael Julian Bond said he introduced the paper in response to debate at the May 9 meeting of the council’s Community Development/Human Services Committee. At that meeting, several committee members told BeltLine President and CEO Paul Morris that they were deeply disappointed in efforts by BeltLine leaders to devise tools to prevent small businesses and residents of lower-priced homes from being priced out of the market.

Bond said he expects the legislation to move forward within a matter of weeks, not months. Bond said the current schedule includes discussions this week with Mayor Kasim Reed’s administration.

The talks will center on the geographic boundaries of the proposed Urban Enterprise Zones for housing and commerce. They’re to be located alongside the BeltLine Tax Allocation District. The boundaries have not yet been identified.

Enterprise zones may not be created in an existing tax allocation district, or TAD. The city’s guide to EZs states: “A property located in an existing Tax Allocation District is disqualified from consideration.”

Consequently, the incentive can’t be applied to properties in the BeltLine TAD. But the incentive can be provided in areas adjacent to the BeltLine TAD.

Bond suggested that neighborhood leaders begin thinking about whether their areas need help and are eligible. If incentives are desired, the local folk should begin preparing their case for inclusion in an EZ.

“This is, hopefully, a tool that will help encourage landowners not to raise rent and push people out,” Bond said. “This is definitely is happening on the commercial side, and also happening on the residential side.

“We want to work deliberately to avoid problems that other cities wrestling with the issue are overwhelmed by,” Bond said. “We want to keep Atlanta affordable for existing residents and businesses. All that plays into the culture and the history of the city.”

Enterprise Zones are powerful tools to spur redevelopment. They exempt, in whole or in part, the property tax imposed by the City of Atlanta and Atlanta Public Schools, according to the city’s EZ guidebook. The legislation notes that:

• “[T]he designation of a Commercial Enterprise Zone exempts the real property from ad valorem taxes for one-hundred percent (100%) of its taxable value for the first five years after creation; eighty percent (80%) for the next two years; sixty percent (60%) for the next year; forty percent (40%) for the next year; and twenty percent (20%) for the last year….”

These tax savings could be enough to entice developers to marginal areas. The legislation paints a vivid picture of the physical and moral decay in some BeltLine-area neighborhoods:

• “[A]reas such as this contribute to or cause unemployment, create an inordinate demand for public services and, in general, have a deleterious effect on the public health, safety, welfare, and morals. It is further found that these areas, as is the case with the identified BeltLine areas are characterized by no investment or under investment by private enterprise in ventures which produce jobs, trade, provision of services, and economic activities which individually and together contribute to a healthy society. This lack of private investment and activity contributes to social and economic depression in such areas.”

Atlanta has five criteria for creating a site-specific EZ. A property must meet at lease three of the following criteria:

1. “Evidence of Pervasive Poverty: Must be greater 20 percent, as is measured by the census block group in which the subject property is located.
2. “Unemployment: An average rate of unemployment rate at least 10 percent … higher than the average rate of unemployment for the State for the preceding calendar year according to data published by the Georgia Department of Labor; OR, Must have evidence of adverse economic conditions brought about by significant job dislocation within the nominated area such as the closing of a manufacturing plant or federal facility.
3. “General Distress: Must have a high crime rate. The crime rate for the police beat must be greater than 20 percent higher than the Citywide average of crimes per square mile as is measured by City of Atlanta Police crime statistics; OR, Must demonstrate the presence of adverse conditions within the nominated area such as existing abandoned and/or dilapidated structures, deteriorated infrastructure, as is measured by documentation (such as photographs) to be provided by applicant and substantial population decline.
4. “Underdeveloped: The Neighborhood Planning Unit (NPU) in which the property is located must have 20 percent less than the Citywide NPU average for development activity for the past five years, as is measured by City building permit data….
5. “General Blight: The property is located within the boundaries of an identified urban redevelopment area for which an urban redevelopment plan has been officially adopted.”