Atlanta’s experts in affordable community redevelopment pushed to sidelinesHUD celebrates 50th anniversary in Atlanta on Nov.4, 2015 at the Center for Civil and Human Rights. Left to right: Renee Glover, Egbert Perry, Shirley Franklin and Georgia Tech professor Danny Boston. Atlanta Mayor Kasim Reed welcomes then-HUD Secretary Julian Castro to Atlanta (Photo by Maria Saporta)
By Maria Saporta
When the U.S. Department of Housing and Urban Development came to Atlanta on Nov. 4, 2015 to celebrate its 50th anniversary, it turned to Renee Glover, Egbert Perry and Shirley Franklin to highlight its successes in Atlanta.
Glover, who had been ousted two years earlier by Atlanta Mayor Kasim Reed as the CEO of the Atlanta Housing Authority, moderated two panels that looked at Atlanta’s place in history as an innovator in public housing.
Not only were Atlanta’s Techwood Homes and Clark Howell Homes the first public housing developments in the nation.
But the development that replaced them – Centennial Place – became the proto-type of the next generation of public housing – mixed-income communities aimed at lifting the poor out of poverty by creating neighborhoods with strong schools and a quality of life where people of all incomes would live.
The Atlanta model – using HUD’s HOPE VI program – was developed by Egbert Perry, CEO of the Integral Group, in concert with McCormick Baron Salazar and the Atlanta Housing Authority before the 1996 Olympics. Perry now also serves as chairman of Fannie Mae, one of the largest purchasers of mortgages in the country.
Franklin, who was working with the Olympics before running for mayor, remembered how Glover, Perry and Hattie Dorsey, then CEO of the Atlanta Neighborhood Development Partnership, launched the idea of mixed-income, complete communities.
“They were the pioneers,” Franklin said. “They were at the forefront, and it’s a great tribute to them that they were actually able to find a mechanism that could be used to create new communities and take existing resources to serve people who have limited options.”
The model was replicated in the East Lake Community, which also has become a national case study of how to break the cycle of poverty that used to afflict former public housing projects.
Developer Tom Cousins, working with AHA’s Glover and Franklin (both before and after she was mayor) helped transform the crime-infested East Lake Meadows into a desirable community with a quality public charter school and other cradle to grave amenities, such as early childhood education.
Cousins, Franklin and others have been exporting the East Lake Model through a national nonprofit called Purpose Built Communities, and they are working with more than 16 redevelopment projects throughout the country.
Former U.S. HUD Secretary Julian Castro was so impressed by what he saw in Atlanta during the 50th anniversary visit, that he complimented Glover, Perry and Franklin for all their “trail-blazing work” in transforming communities.
What has been harder to figure out is why Reed and his appointments to the Atlanta Housing Authority board, including chairman Dan Halpern, were hell-bent on removing Glover, despite her reputation as one of the very best public housing directors in the nation.
“When I was first elected Mayor and went to Washington to meet with members of Congress, every single one of the ranking members knew Renee, knew of her work and wanted me to give her support,” Franklin said. “I know for a fact that she was a force to be reckoned with when it came to developing urban housing policy.”
But for whatever reason, Glover never received support from the Reed administration.
Now the authority is trying to back out of an agreement that Glover had reached with Integral – one that would permit the firm to buy the undeveloped parcels next to four of Integral’s AHA developments – Carver, Capitol, Grady and Harris.
In fact, the authority has launched a public campaign arguing that the existing legal agreements, which were approved by HUD, would give Perry and Integral a sweetheart deal on those parcels.
But it’s important to know the whole story.
When Integral first started developing those properties, the value of the land was negligible because the concentrations of poverty that existed in the public housing projects.
Integral, working with other partners and the AHA, created those mixed-income communities – once considered risky ventures – making the adjacent land more valuable.
The agreement between Integral and AHA calls for three appraisals of the property’s current value (Integral gets one appraisal, AHA gets one appraisal and they both agree on a third appraisal). With a consensus of the current appraisal, the formula called for Integral paying what the land was worth before the development plus 50 percent of the appreciation of value. Then Integral and AHA would form a new company that would own the land.
That’s not all.
The development agreements Integral has had with AHA have been based on a financing model that actually has provided the authority with $80 million over the last 20 years. That has been a game changer. Perry said subsequent AHA projects with other developers adopted the same model of providing funds back to the authority. In all the Authority has done about 60 phases of development throughout the city, and Integral and its partners did 28 of those 60.
“The Authority was one week away from being placed into receivership when Renee came in,” Perry said. “The Housing Authority of Atlanta would not exist today if it were not for this model. And at the end of the ground lease period, the whole property goes back to them.”
At that time in the early 1990s, Atlanta also had the highest concentration of public housing units per capita than any other city in the country. That contributed to Atlanta’s then high crime rate and low public education outcomes.
Today, much attention is being focused on developing affordable housing in Atlanta. The mayor has set a standard of affordability for developers using public financing at either 10 percent of the units based on 60 percent AMI (area median income) or 15 percent at 80 percent AMI.
By comparison, the projects developed by Integral and its partners were split with 40 percent being publicly subsidized – rents based on 30 percent of a tenant’s income (the average household income of residents living Techwood/Clark Howell was $4,300 in 1994); 20 percent being affordable; and 40 percent being market-rate. In other words, about 60 percent of the units were affordable, with most of those being publicly subsidized.
In all, since 1994, Integral has developed 1,446 affordable units; 1,235 publicly subsidized units and 1,113 market rate units, making Perry the most prolific developer of affordable housing in Atlanta over the last couple of decades.
Perry said the market is right for Integral to exercise its options to buy the outstanding parcels, and he pledged to meet the city’s current affordable housing requirements.
The Reed-controlled AHA board reportedly has voted unanimously to not appraise the properties – a move aimed at blocking Integral, because its seven-year option to buy the parcels runs out in 2018.
It easily could end up being a dispute that will be settled in court.
But Perry said Integral and its partners “will work with AHA to resolve any disagreements within the context of our Agreements.”
But in the meantime, there’s a larger question.
Why has Atlanta’s varsity team of affordable housing experts – people who have a national track record of transforming communities – been placed on the sidelines in Atlanta during the Reed administration?
Imagine how much healthier Atlanta would be today had we kept Glover, Perry, Dorsey and Franklin in the game – engaged in the transformation of Atlanta’s poorest communities.