A new training program called the Equitable Development Initiative is looking to train investors to bring more affordable housing to Atlanta.
The program is being organized by Capital Impact Partners, a community development financial institution (CDFI) and part of the Momentus Capital brand which focuses on financing for disinvested communities. The application period closed on July 12, and applications will now be under review.
Though it’s the first one to launch in Atlanta, the program has previously been implemented in Detroit, D.C, Dallas, Cleveland, and the Bay Area. Altogether, the program has over 250 alumni.
This iteration is expected to see around 15 participant-developers over the nine-month course period, where smaller developers will bring their ideas at various stages and have them connected with more experienced investors to realize them. In addition to fostering connections, the initiative is focused on sharpening skills for participants through three key areas: training, mentorship, and financing. It also looks to build what it calls three different areas of capital: knowledge capital, financial capital, and social capital.
Tommy Lester, manager of Atlanta initiatives, said it’s crucial developers learn skills in a city like Atlanta, where the housing market has been steadily and rapidly rising. Lester is an Atlanta native and has over 25 years of real estate experience. Moreover, he’s seen the changes in the city with his own eyes.
“Freshman year of college, when the Olympics came here, I saw that first shift and the market of Atlanta real estate and overall growth, and that’s been sustained over the last several years,” Lester said, adding that he’s noted projects like the Atlanta BeltLine that have acted as economic engines in the city as of late too. “What I’ve seen happening is that the BeltLine has made the urban core so attractive that rents are going up significantly in that area, home prices have gone up significantly, and a lot of people who work in the city can’t necessarily afford to live in the city.”
According to a study by KB Advisory Group and Urban Land Institute Atlanta which Capital Impact Partners cited, home prices in Atlanta’s five-county core have increased by 73 percent since 2017 and rental units have increased by 33 percent.
In addition to the BeltLine, projects like the development of Tech Square in Midtown by Georgia Tech and a slew of other development projects around the city all have contributed to making Atlanta a hot commodity, Lester said. The region at large becoming increasingly unaffordable is in large part the reason why Atlanta was the right next location for the Equitable Development Initiative.
With the program now launching in Atlanta, Capital Impact Partners is looking to ensure community members are as involved as possible in every aspect of development — including local real estate developers.
“What I like about this program is that [we] target people from the communities that they serve; our development program is open to developers from Atlanta who have a verifiable partner history of working or doing projects in the city — because we’re really trying to do is increase the housing supply by increasing the number of housing developers,” Lester said.
This isn’t Momentus Capital’s first real estate development program in Atlanta; the group has a program called Growing Diverse Housing Developers, a joint program between Capital Impact Partners, Low Income Investment Fund, Reinvestment Fund and Wells Fargo, with the goal of “supporting development firms led by people of color to produce a minimum of 1,500 affordable housing units across the cohort over the next six years.”
One goal of Capital Impact Partners and the Equitable Development Initiative is to show developers how they can preserve and respect housing of a community and still make a profit, without outright flipping houses and raising prices of the whole neighborhood.
“A lot of times what we’ve determined as gentrification is people moving in, fixing stuff up and increasing values There’s a lot of neighborhoods where that hasn’t happened yet, and it’s important that it does happen,” Lester said. “The fine line for me is, one, whether or not you are coming in to add value to the community or are you coming to extract value from the community.”
By increasing the number of affordable housing developers, especially those from the communities they work in so they would have a better understanding of what’s missing in their community, Lester is optimistic that the program will be a success. One alumni and graduate of the program in Detroit, Edward Carrington, is building The Ribbon, a mixed-use building with one commercial unit and 18 affordable residential units. Ayesha Hudson, a graduate of the D.C. area program, recently created nine new affordable housing units and preserved four existing affordable housing units, according to Capital Impact Partners.
Lester is hopeful the tight-knit Atlanta community will introduce smaller developers to this program, where they can scale their operations and create more affordable housing like the ones aforementioned.
“We are not looking for inexperienced people who are looking to get into development, we are looking for people who already have development experience so that they can do bigger projects and more projects,” Lester said.
Classes for the first Atlanta cohort are scheduled to begin in late August.
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