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Atlanta’s housing policies must be well-funded, comprehensive, inclusive

BeltLine, Eastside Trail

The price of a three-bedroom apartment starts at $2,999 a month in the building on the right, the 755 North Avenue complex that overlooks Old Fourth Ward Park. Credit: David Pendered

By Guest Columnist DAN IMMERGLUCK, a professor in the Urban Studies Institute at Georgia State University

In the book, City on the Verge, author Mark Pendergrast points out some of the challenges that the Atlanta BeltLine and the rest of Atlanta face in terms of housing affordability. He argues, for example, that the City should adopt mandatory inclusionary zoning, with a sliding scale to address the truly impoverished, as soon as possible in order to address the problem of declining affordability.

Dan Immergluck

Dan Immergluck

I agree, but I would go somewhat further and argue that, for projects such as the BeltLine to represent responsible and equitable urban redevelopment, they need well-funded, muscular affordability measures that anticipate rising land values and housing costs and put in place a variety of tools to address this easily anticipated outcome. These strong affordability preservation and inclusion tools should be put in place before other aspects of the project are started.

Instead, in the case of the BeltLine, for the first 10 years of the project, affordability was treated as a subordinate issue that could be handled through modest, weakly funded efforts, as a kind of after-thought. The result has been that the market tumult that the BeltLine has stoked has made it much more difficult – and much more expensive – to address affordability problems at this point.

In the BeltLine’s case, there was ample warning (see here and here), going back to 2007, that the project was causing major speculative increases in land and housing prices. In fact, the foreclosure crisis put a brake on these trends for a few years, providing BeltLine leadership with ample time to push a reset button on its affordability planning.

Unfortunately, this did not happen in any major way. It was not until late 2016, roughly five years after speculation and rapid increases in land values resumed, that the leadership of the BeltLine took any steps to ramp up affordability measures.

More recently, there have been very large post-crisis increases in housing prices within a half-mile of the BeltLine (see here and here). These increases are also reflected in rapidly rising rents in the same areas.

At this point, though, what can be done to increase affordable housing options near the BeltLine and across the city? In various places, I have made a number of recommendations, which I break into nearer- and longer-term efforts.

In the short term, examples of measures that should be taken to preserve affordability include:

  • BeltLine, Eastside Trail

    The price of a three-bedroom apartment starts at $2,999 a month in the building on the right, the 755 North Avenue complex that overlooks Old Fourth Ward Park. Credit: David Pendered

    The City of Atlanta, and its county partners (Fulton and DeKalb) should increase the homestead exemption for owner-occupied properties. While this may appear to be poorly targeted (and I do argue for more targeted efforts below), an increase in the exemption will disproportionately benefit owners of $75,000 or $100,000 homes compared to those who own homes valued at, say, $500,000 or above.

  • The City should speed up the process of reclaiming vacant housing for reuse by buyers who commit to providing long-term, affordable rental housing. Other properties should be land-banked for later use for affordable housing. In City on the Verge, Pendergrast suggested a faster implementation of the Judicial In Rem program to help in that effort. This and other efforts to address vacant properties need to be accelerated.
  • The City should allocate most of its $40 million affordable housing bond program toward rental housing that is affordable to households with incomes below 50 percent of the area median income (which is equivalent to about $35,000 per year for a family of four). There is far less need for funding for higher-income families, especially those with incomes above 80 percent of area median income. Unfortunately, such programs favor products like down-payment assistance for outright house purchases, because those dollars are easier to get out the door.

As Pendergrast suggested in City on the Verge, the City should pass a citywide mandatory inclusionary zoning ordinance that addresses the needs of the most impoverished.

BeltLine, Westside Trail

These two houses on Harwell Street are boarded up and supposed to be vacant. They are adjacent to the Atlanta BeltLine’s Westside Trail and each is valued at less than $40,000 by the Fulton County Tax Assessor. The house with white trim sold in 2016 for $14,000 by a seller who purchased the house in 1999 for $67,500. Credit: David Pendered

Meaningful set-aside requirements must target households below 50 percent of area median income. They should also provide additional incentives for owners targeting tenants below 30 percent area median income. The current proposal in the Atlanta City Council covers only the BeltLine and nearby neighborhoods; it should be expanded to include the entire city. Otherwise, developers will seek to avoid the requirements by simply building just outside the inclusionary overlay zone.

Public and private capital sources should be mobilized toward funding the preservation of existing, low-cost rental housing. This may involve the pooling of social impact finance and public sources aimed at rehabilitating unsubsidized units, featuring attractive financing offered in exchange for long-term affordability commitments from landlords.

The City should authorize and float an additional $250 million affordable housing bond. The existing $40 million is woefully inadequate. Long-term affordable rental subsidy will conservatively cost in excess of $50,000 per unit, or more. (Subsidy for down-payment assistance would be cheaper per unit, but much less effective at helping those who need housing assistance the most.) At such costs, $40 million will only generate about 800 units initially (with future recoupment of funds generating more units, but in later years).

Conservatively, the City is losing on the order of 1,000 units of affordable rental housing units per year due to “natural” attrition. Thus, a much larger bond program is needed. For a fast-growing, hot-market city like Atlanta, affordable housing must be viewed as part of the basic infrastructure of the city, just as is public transportation.

In the longer-term, other key steps need to be taken to increase housing affordability, providing for a more inclusive Atlanta over the long run:

  • housing, apartments, westside

    Atlanta’s affordable housing policy should include measures to protect existing structures that could provide affordably priced homes, Dan Immergluck contends. File/Credit: David Pendered

    The property tax structure in the city (and counties) should be revised to treat affordable rental housing more fairly. Property owners who commit to keeping their rents affordable, or a portion of their rents affordable, over a substantial period of time, should receive lower property tax assessments. Currently, Georgia law makes providing such differential treatment, or tax abatements, quite cumbersome and it is not well designed for smaller, lower-value properties. Instead, existing tax abatement programs have been used to subsidize expensive luxury rentals and high-end mixed-use developments.

  • Similarly, lower-income homeowners should receive property tax reductions (e.g., higher exemptions) and “circuit breakers” that limit increases over time. While some programs exist for senior citizens (which likely need to be marketed and serviced more aggressively), there are no such programs for younger low-income homeowners. Many other states (e.g., Michigan, Arizona, Colorado, Montana) offer property tax breaks for lower-income homeowners and renters.

There are also other measures that could be taken to preserve diversity in Atlanta over the long-term. Banking land for affordable housing, improving tenant protections, and legal aid for low-income renters, for instance, are on a longer list. The measures above are just some of the things that local and state leaders could do to provide for a more inclusive Atlanta and BeltLine.

Note to readers: Dan Immergluck’s  research concerns housing and housing policy, neighborhood change, urban poverty and racial dynamics, financial markets, and community and economic development. He has consulted to the U.S. Department of Justice, the U.S. Department of Housing and Urban Development, and the Federal Reserve Bank of Atlanta. He has testified before Congress and the Federal Reserve Board.  He has served as a visiting scholar at the Federal Reserve Bank of Atlanta and as a senior fellow at the Center for Community Progress in Washington, D.C.


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  1. mike dobbins September 25, 2017 6:15 pm

    Great article, Dr. Immergluck. Little by little, people are beginning to catch on to the magnitude of the gap between the BeltLine’s promise and its performance. For the BeltLine, two questions:
    – Rising land cost is a fundamental obstacle to achieving housing affordability, yet the BeltLine’s life blood derives from pumping up land costs and the Tax Allocation District revenue that generates: if its bread and butter depends on this revenue source, then, how in good conscience can it hope to deliver on its affordable housing commitment?
    – The BeltLIne is obligated to spend 15 percent of its bond-supported activities on affordable housing but is free to spend more if it wants to: so why doesn’t it devote more from its considerable Tax Allocation District resources toward affordability? Like diverting some of its hundreds of millions of streetcar dollars until, when and if that proposal shows some signs of life?Report

  2. Jack Hardin September 26, 2017 10:27 am

    I applaud this article and especially the suggestion that the affordability threshold be lowered to 50% or below from the 80% of AMI often seen. I want to add one suggestion to the menu for affordable housing. I think affordable housing efforts that depend on private owners have two potential weaknesses. For one thing, the affordability component is not permanent in most cases and to that extent just kicks the problem down the road, albeit 15 years or so. Secondly, my observations from New York City’s multi-decade efforts in these regards is that some private property owners develop ways to circumvent the affordability restrictions so the properties can be market rate again. This leads me to believe that significant non-profit ownership and management of affordable units should be added to the mix. Non-profits have less incentive to convert properties from the affordability restrictions. Thanks Dr. Immergluck for your contribution to this dialogue.Report

  3. Julian Bene September 26, 2017 11:01 am

    Professors, while I strongly support critical thinking about the Beltline and affordable housing, you both could use a fact check on the cash available to ABI, past and future. It does no good to hand wave at a non-existent money tree. Where did ABI have money to take advantage of the 2008 property crash? (It didn’t.) Where are the “hundreds of millions of streetcar dollars”? (You’ve got me.)

    The Beltline TAD will bring in $34mm this year. That’s roughly how much the public is foregoing in school, city and county revenues. $23mm of it goes straight out in debt service and PILOT payments. So that leaves ABI with $11mm. ABI’s operating expenses are $9.5mm. So that leaves $1.5mm of recurring money to spend on programs.*

    ABI plan to spend $23.5mm of bond proceeds this year, of which one third will be on affordable housing. The rest of ABI’s capital budget comes from the TSPLOST, the Feds and private donors that require it to be spent on acquiring the rest of the loop or for trails and transit.

    In sum, it is a fantasy that ABI has significant hidden resources that it could put into additional affordable housing.

    Standing back, the Beltline has never generated the money required to fulfill all its promises. The original projections used to sell the plan to the public were ridiculously optimistic. Wayne Mason’s heist of $65mm for the key Eastside stretch put ABI in the hole from Day 1. The great recession and the tax exemption for Ponce City Market further eroded the Beltline’s funding. So it should surprise nobody that ABI has fallen short on producing affordable units. And, as you note, it was naive to promote and create an attractive, trendy amenity and then be shocked, shocked that it increased adjacent home and land prices and displaced low-income residents.

    We have to find a way that when the Beltline dramatically increases property values for private landowners, those landowners have to contribute much of their unearned appreciation back. It is perfectly reasonable for the City to tell landowners that we won’t build out the trail next to their holdings until they contribute heavily to affordable housing. We still have that leverage for most of the 22 miles. How about advocating for using it?

    *The budget numbers are online http://www.boarddocs.com/ga/investatlanta/Board.nsf/files/APDUZ97E71F5/$file/FY18%20Budget%20Briefing%20Full%20Board%20060517.pdfReport

    1. mike dobbins September 30, 2017 3:38 pm

      Thanks for engaging – these issues are critical if the BL is to redirect its energy and resources toward meeting real time low wealth community needs as has been promised but not delivered.

      To your points:

      Of course I know that the BL’s resources are limited; my comment spoke to transferring funding priorities over the remaining life of the TAD from the increasingly iffy streetcar, which would cost hundreds of millions of dollars, to housing affordability and infrastructure improvements where the needs are greatest, in neighborhoods whose inclusion was essential for establishing the TAD in the first place. This commitment is spelled out in the BL’s Strategic Implementation Plan, where the failure to perform is evident.

      For starters, the BL might consider reversing the year’s budget allocation from 1/3 housing to 2/3 housing and rethinking the ROW acquisition allocation to secure what’s needed for a trail that doesn’t assume a double track streetcar and using a combination of zoning and subdivision regulations, easements, and tax credit “bargain sales” to reduce cost outlays. Get PATH to do it.

      And thanks for acknowledging the Wayne Mason $65 million “heist,” a marker of BL ineptitude that still stretches credulity. Not to mention caving to Jamestown to achieve Ponce City Market, a big step back from any affordability intent.

      Finally, i’m not sure of the ethical or legal basis for soaking adjacent properties for their value increase. Less than two years into the TAD, in 2007 Professor Immergluck wrote a report that clearly linked the BL and its hype to scarily escalating property values adjacent to the BL. So there’s no excuse for “naivete” when the phenomenon that boosts land costs was publicly identified and documented 10 years ago. Maybe way back then there may have been someway to capture the value added.

      I appreciate your attention.Report

      1. Julian Bene October 3, 2017 12:07 pm

        To follow up on two of your points.

        Would spending 2/3 of this year’s ABI capital on housing be proportional to the promises made to city council and to voters who approved the Beltline TAD and the latest transport sales tax increase?

        I still believe there is a way that the big lucky winners from the uncompleted Beltline – owners of adjacent commercial land – can be induced to contribute affordable housing in return for having the trails actually built past their property. Nothing unethical about using that leverage to recapture some of the gains from an investment that we are all paying for.Report

    2. Dan Immergluck October 2, 2017 10:54 pm

      Mr. Bene,

      My comments never suggested that ABI would be the funding source for my recommendations. I specifically point to the City of Atlanta as the primary source. I don’t believe there were any facts that required “checking” in
      my piece. I’d respectfully request that you “check” your allegations before making them.

      Thank you,

      Dan ImmergluckReport

      1. Julian Bene October 3, 2017 11:48 am

        Professor, You wrote that the foreclosure crisis gave Beltline leadership ample time to push a reset button on affordability planning. I inferred that you meant the Beltline should have bought land at knockdown prices then, which is why I pointed out they did not have the cash to do so. The City was in no financial position to take advantage of the property crash, either: they were closing fire stations because of the budget crunch. If that was not your point, I’m sorry to have misinterpreted it and am intrigued to understand what it was.

        Many of your proposals for increasing availability of affordable housing appear to involve expanding property tax exemptions for residents and developers or spending tax revenues to fund housing bonds. But the City’s tax base has been stagnant from 2010 to 2016. Expanding exemptions or funding a big housing bond diverts money from the City and APS funds that pay cops and teachers – often the folks seen as most needing affordable housing in the city. Alternatively we could increase tax rates, of course.Report

        1. Dan Immergluck October 3, 2017 12:24 pm

          The “tax base” has not been stagnant. Real values have increased dramatically since 2011 (perhaps you haven’t read the work I cited above?). Fulton County has made the political decision to freeze assessments without rationale. Once this is fixed the total assessed valuation will increase with ample room to fund these interventions.Report

          1. jim martin October 3, 2017 1:34 pm

            The work cited above, if I correctly understand it, pertains only to property close to the Beltline rather than in the city as a whole. Without a tax increase, appreciation in the city as a whole, should be offset by reduced millage rates, so only new development would be contributing to general fund revenue available for new expenditures.

            From a general-fund revenue perspective, only those properties described in the citations that are also outside of any TAD (mostly single family homes) would contribute at all. This does not seem like it would significantly increase the tax digest for the city as a whole and the general fund’s property tax revenue even less as it would be dragging up the mean and thereby reducing the millage rate. The politically frozen assessments only occurred recently and should not affect any of these numbers.Report

          2. Julian Bene October 3, 2017 2:06 pm

            Look at the city’s consolidated financial report. Property tax revenue was lower in 2016 than in 2010 ($325mm vs $334mm). The digest has barely budged – despite all the growth from new construction and depite the inflation in parts of the city. It’s stagnant.

            This surprised me, too. Reasons presumably include: commercial tax appeals not being reversed as values recovered post-crash; assessors doing horrible job on valuing commercial properties in general (they get near market on single family homes where I live); tax abatements eroding the increase from new commercial developments; many new developments located in TADs, so not contributing to general fund revenues.

            You are arguing that when the freeze comes off, the digest and tax revenues will rocket. But by state law the City would have to declare a big tax increase to achieve that, because it consists of “inflation” rather than new developments. There might be an outcry if the City did not substantially roll back the millage rate, so that people didn’t get whacked with much higher taxes – especially folks in lower-income parts of town where residential assessments have not kept up.

            Are you advocating for a significant tax increase on all residents to subsidize housing units for a few? Are you sure this would promote equity?Report

          3. Dan Immergluck October 3, 2017 2:27 pm

            No. Values have increased citywide. Over 30% NOT near the Beltline. Over 50% near the Beltline.Report

          4. Dan Immergluck October 3, 2017 2:35 pm

            For Mr Bene: The appraiser has not updated values for several years. When it was updated recently the increases were large hence the political pullback. If they had increased them regularly would have been less opposition. On your last point you are advocating that we not let property taxes increase at all when one’s value increases a great deal? That is giving them a huge tax cut effectively. I would rather they pay their fair share and use the overall tax base to help those oftenpaying more than 60% of their incomes for housing and not be pushed out of the city.Report

          5. Julian Bene October 3, 2017 2:39 pm

            Taxable property is up from $24bn in 2010 to only $24.9bn in 2016 and the $1bn increase is almost all commercial. The 2016 value is still well below 2008 and 2009 levels. – Source: CAFR 2016 p 182

            Seems like the assessors have not kept anywhere near to what your market studies say.Report

          6. Dan Immergluck October 3, 2017 2:51 pm

            Mr. Bene: My study is not a “market study” which implies a sample of some kind. It analyzes ALL residential sales from 2011 to 2015. And, yes, the tax assessor’s data during this time did NOT reflect real increases in values. And my work has been peer reviewed.Report

        2. jim martin October 3, 2017 3:17 pm

          If the city as a whole is up 30% due solely to appreciation rather than to new development and this is properly reflected in the assessments. And property near the Beltline is up 50% due solely to appreciation and this too is properly reflected (and presumably contributes to the 30% increase). Then without an explicit tax increase, the millage rate will drop by 30% and there will be no new tax revenue due to these effects. People close to the Beltline will pay more so that people further from the Beltline can pay less. If no money flows into an affordable housing trust or some such thing from this appreciation, but is rather transferred equitably from one set of tax payers to another, then overall affordability is only enhanced if the tax winners in the exchange are below 60% AMI and even then it is probably pretty a small effect compared to a thing like the homestead exemption, right?Report

          1. Julian Bene October 3, 2017 3:44 pm

            For Prof. Immergluck

            I do not question your work on residential values.

            The assessors have obviously created a mess by not keeping up with values in some areas, while doing a pretty good job in others – in 30306 at least. If they persist with assessments on 2017 lines, however, there will be vast numbers of appeals, many justified by market comps – if 30306 is anything to go by. Once final values are settled, some folks may be staring huge tax increases in the face, even if there is a millage rollback. If they’re folks sitting in million dollar homes that were paying at $500k, no tears for them. But the folks sitting in $300k homes that were paying at $150k, that’s going to be hard, isn’t it? So tax season will be fraught politically and at a lot of kitchen tables.

            I believe that overall everyone’s property taxes should be rising at least enough to pay cost of living raises to our public employees. I’d expect all the new-since-2010 McMansions and apartment buildings to be paying for growth in services and for more competitive pay for employees where needed. It’s astonishing that all that growth has contributed not a penny to this, sales tax included.

            Given that, I’m not sure the City can afford to take on affordable housing subsidies to a major extent. We’re 300 or 400 cops short of the famous 2,000 goal, largely because we’re underpaying them. We almost cut our teachers’ pay this year.Report

      2. Dan Immergluck October 3, 2017 5:19 pm

        This is, fundamentally, a debate about fundamental policy choices and how *inclusive* the city should be over the long run. These are choices that the city council and next Mayor will have to make. However, I think it is misleading to pose a false choice between 1) affordable housing and 2) fair wages for teachers and salaries. The city, and its partners, have subsidized a great deal of luxury housing, commercial development, and, yes, the east side of the city. Property values have risen a great deal since 2011. Yes, it is politically difficult to raise tax revenue (even if millage rates do not have to increase). It is a question of political will, and policy choices. Thank you both for your comments.Report

        1. mike dobbins October 5, 2017 4:31 pm

          Dr. Immergluck’s points above begin to put the train back on the track (so to speak) – this is about policy not a quibble about sources and uses of funding. The BeltLine has in its mission and its long term funding projections the ability to shift its emphases toward meeting people’s needs where they are greatest. These are in low-wealth neighborhoods where stabilization, conservation, and a better quality of life can be approached through housing affordability strategies and through basic infrastructure improvements, like sidewalks, streets, lights, crosswalks, connectivity to schools, parks, and existing transit, along with security measures. This work has been in the BeltLIne program all along, but not delivered.

          The great bulk of its project funding, instead, aims at building streetcars, whose need and feasibility have been under question from the beginning. Indeed, with changing travel technologies and behaviors as well as changing investment and settlement patterns, the feasibility, utility, and advisability of the BeltLine’s streetcar pursuit are ever more questionable.

          Thus shifting priorities now, with the overall project’s life is half over, could yield real and meaningful contributions in the direction of equity as suggested above. Even the trails and parks, generally good amenities, could benefit by being much more affordably achieved.Report

  4. Dana Blankenhorn September 27, 2017 6:38 pm

    For Atlanta to succeed it must become a majority middle class city. It is not there yet. Most Atlanta households remain poor. Worries about affordability can be code for preventing Atlanta from getting what it needs to thrive, maintaining it as an enclave for the poor while the doughnut sucks up the money. The regional center of economic gravity is already in Buckhead. Moving it to Sandy Springs would be a disasterReport

    1. Mark Pendergrast October 5, 2017 1:23 pm

      i have been away on a camping trip and just found that Dan Immergluck’s good article, which originally appeared on my website, http://www.cityontheverge.com, has been published by Saporta Report and has elicited these comments. As Immergluck points out, it is a false dichotomy to say that you must choose between robust support for truly affordable housing in Atlanta and developments to attract middle class and affluent citizens. Both can be and must be done. Atlanta has the greatest gap between its wealthiest and poorest citizens of any major U. S. city. That means that the poor will be driven to the far suburbs as the city develops unless efforts such as those suggested by Immergluck are undertaken. And yes, there is money for all of this — it is a matter of political and civic will.Report


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