City audit looks at the state of affordable housing

By Sonam Vashi

Last week, the city auditor’s office presented an audit of affordable housing, the first of its kind, to the City Council. The report offers recommendations to the City Planning department in the midst of rising housing prices and renewed focus on affordable housing.

While Atlanta has relatively lower housing prices compared to other metros, its residents are spending a large proportion of their income on housing costs, the audit remarks. There are about 99,000 renter households in the city; nearly half of them pay more than 30% of their income on rent—an amount that the U.S. Department of Housing and Urban Development considers “cost-burdened”—and a quarter of the renters are paying 50% or more of their income on rent. Production of affordable housing can’t keep up: The report says that Invest Atlanta (the city’s economic development arm) and the Office of Housing had 1,200 affordable units in their portfolio as of March 2017.

To address these issues, the report offered several recommendations. City Auditor Amanda Noble said, “It was a little unusual for us [to offer policy recommendations], but I think that’s where the data was leading.” Among the recommendations:

— Fix the lopsided distribution of affordable housing in the city.
Half of the city’s affordable housing subsides is located in areas that are already inexpensive or have naturally-occurring affordable housing. Much of the city’s affordable housing also tends to be in areas that lack access to transit and contain below-average schools. (The city’s Office of Housing responded in the audit that the new affordable housing in already-affordable areas is higher quality than what exists already.) Higher income districts—namely, the northern and northeastern parts of the city—have much lower percentages of affordable housing compared to other parts.

— Consider longer affordability periods for renters, and maintain affordability for homeowners.
Outside of inclusionary zoning legislation passed this year for renters, Atlanta’s city code doesn’t address the length that affordable housing will actually stay affordable. “The city has no mechanism in place to maintain the affordability of homes purchased by buyers,” the report states. The auditors looked at a sample of 33 affordable homes sold to buyers 10 years ago with assistance from the city in Atlanta’s Eastside. Within eight years, 12 of those 33 homes were no longer owned by the original buyers—nine had been sold, and three were liquidated through foreclosures.

In Atlanta, affordable housing agreements with developers are generally for about 15 to 20 years, the audit notes, but many other cities have longer periods. Austin has affordability periods up to 99 years for home ownership and 40 years for rentals; Seattle has a 50-year affordability period. “The city should consider increasing affordability periods for rentals and implementing a mechanism to maintain affordability of purchased homes.”

The City Planning department replies in the audit that Georgia state law prohibits restrictions longer than 20 years on a property—limiting the city from having affordability periods longer than 20 years—but that the city can explore extending the period on some federally subsidized homebuyer assistance programs.

— Make measurable goals, and put affordable housing information in the same place.
The city’s affordable housing plans and goals are divided across several different agencies and multiple plans—which often lack quantifiable or measurable outcomes. The audit recommends that the city develop performance metrics, consolidate data, and make affordable housing information more accessible to Atlantans by putting them in the same place.

— Expand the use of programs like density bonuses or community land trusts.
The audit suggests looking into alternative ways to create affordable housing, like density bonuses (where developers can build more units than zoning rules typically allow) or community land trusts. In a community land trust, a nonprofit buys land, builds a house, and sells the house to a homeowner, but it keeps the land rights and leases it to the homeowner. That model could ensure that the home stays affordable.

In its response to the audit, the City Planning department says developers aren’t using the maximum amount of density allowed by city rules—so a density bonus might be ineffective—and that community land trusts have tried and failed in Atlanta before. However, the department is exploring new policies that could make land trusts more effective.

Read the report here.