Atlanta funds $40 million for affordable housing at annual cost of about $2.9 millionAtlanta has established a $40 million fund to help low income homeowners pay to upgrade their homes. Now, it's common for folks to leave such homes and for developers to buy, renovate and flip them at prices higher than the former residents can afford. File/Credit: David Pendered
Editor’s note: This story has been updated to correct the title of Katrina Taylor Parks.
By David Pendered
Atlanta has approved a $40 million expenditure that aims to preserve the city’s supply of affordable homes by – among other efforts – providing money to lower income residents to repair their decaying homes and continue residing in them.
The Atlanta City Council approved the measure Monday by a unanimous vote. Mayor Kasim Reed is expected to sign the legislation. Reed views the program as a priority and highlighted it in his Feb. 2 State of the City presentation, Jim Beard, the city’s CFO, told the council’s Finance Committee at its March 1 meeting.
The housing opportunity program is financed with bonds that are secured by the full faith and credit of the city. That means the bonds are to be paid out of the general fund – the pot of money filled by property taxes and fees.
Under questioning at the Finance Committee from Councilmember Yolanda Adrean, Beard indicated city officials will devise a way to pay for the program without goring any sacred cows. Adrean noted that the city already faces funding gaps as the mayor and council prepare to debate and then adopt a budget for the fiscal year that begins July 1.
Beard responded that the city has faced gaps before and has, “pushed through them.”
Katrina Taylor Parks, Reed’s deputy chief of staff, stepped forward to say the administration and council have a record of setting objectives and reaching them.
“I do realize the debt concern and budgetary issues,” Parks said. “We have been able to multitask before on big issues and nobody loses. That’s the spirit of this council and this administration.”
This sale of $40 million in bonds is to be repaid at a cost of about $2.8 million a year, based on current interest rates.
The city now is paying a maximum of $2.8 million a year to retire $35 million in bonds sold in the same program. That tranche was sold in 2007 at an interest rate of 5.8 percent, Beard said.
The council created the housing opportunity program in 2007 during the tenure of then Mayor Shirley Franklin.
Atlanta’s first round of housing opportunity bonds helped create about 2,100 units of affordable homes, Terri Lee, deputy commissioner of the Department of Planning and Community Development, told the Finance Committee.
The city’s funds leveraged $257 million from other sources, Lee said. The other sources included a number of vehicles such as historic tax credits and tax exempt financing, Lee said.
The second round of the program, the sale of $40 million in housing opportunity bonds, means the entire $75 million has been allocated. The amount of money from this second sale that will be used to pay off the first round is not clear in the legislation.
The program provides three buckets of money to fund three types of housing programs:
- Loans for multi-family projects;
- Loans for single-family homes;
- Loans for non-profit organizations that develop affordable housing;
- Loans to purchase land for future use as affordable housing.
Following the council’s unanimous vote, council President Ceasar Mitchell paused the proceedings to allow members to speak to the legislation.
Mitchell has made affordable housing a central plank of his mayoral platform and prefaced the comments by saying: “I think we’re going to have some comments on this wonderful piece of legislation that just passed.”
Councilman Michael Julian Bond was among the speakers. Bond introduced the paper, which ultimately was co-sponsored by every councilmember. Bond observed:
“In passing this and putting forth this effort, we are determing the type of city we want to have in the coming decades. … We need to dream and envision the kind of Atlanta we will have, and make it so.”