Not-so-affordable housing project in Buckhead gets $3.4M in tax incentives. But why?Luxury apartments, like the ones planned for this site in Buckhead, shouldn't be getting tax incentives unless they provide real affordable housing, experts say. (credit: Google Maps)
By Sean Keenan
A luxury apartment project planned in Buckhead recently earned nearly $3.4 million in tax incentives, which has some local leaders scratching their heads.
In June, the Development Authority of Fulton County okayed an incentives package that includes a $271 million bond issuance which could ultimately save developer JLB Partners roughly $3.35 million in taxes over ten years.
The development, which would produce a high-end apartment complex at 99 West Paces Ferry Road, just a stone’s throw from the Governor’s Mansion, is expected to include a handful of “workforce housing” units priced at between 130 and 150 percent of the area median income.
Those units—10 percent of the rentals at the planned development—would be affordable to households making between $103,610 and $119,500 annually, according to Reporter Newspapers.
According to one housing and city planning expert and an Atlanta city councilman who’s championed legislation that encourages affordable housing creation, supporting such a project with public incentives is just absurd.
Atlanta City Councilman Andre Dickens told Saporta Report that the tax incentives approved by the DAFC are in direct conflict with an ordinance he passed in 2016 that requires intown projects vying for public funding help to earmark 15 percent of their units for individuals making 80 percent of the area median income or 10 percent of their units to people making 60 percent of the area median income.
“We created a policy that says, if [developers] are going to get [public] incentives in our city, they don’t get a permit unless they meet our objectives,” Dickens said.
Plus, the councilman pointed out, the DAFC passed a resolution in January that somewhat mimics the language of his legislation:
“The DAFC will encourage all residential rental projects receiving incentives in Fulton County to work to create affordable units as is consistent with the best interests and needs of each municipality (for example approximately 15 percent of the units could be reserved for residents earning at least or below 80 percent of the area median income for the Atlanta-Sandy Springs-Marietta, Georgia metro area as defined by the U.S. Department of Housing and Urban Development).”
But a spokeswoman for DAFC CEO Al Nash told Saporta Report that the JLB Partners project has been in the works for so long that Dickens’s ordinance doesn’t apply to it.
“The ordinance passed by the City of Atlanta went into effect July 1, 2016,” wrote Sandra Zayac in an email. “Prior to that, there was no requirement by the elected officials regarding affordable housing… The JLB Partners project at 99 West Paces Ferry received its letter of inducement prior to July 1, 2016, so it was not subject to the new requirements. The project took several years to secure equity investors and finalize plans, which is why the bond resolution was adopted just a few months ago.”
Responded Dickens: “Now you see just how bad it was and why I had to create a policy for this ridiculousness to stop. In this specific case, I’m surprised and frustrated that they allowed an inducement to remain in effect for three years that allows them to avoid my policy’s requirements.”
Dan Immergluck, an urban studies professor at Georgia State University, was equally befuddled when he learned about the deal JLP Partners secured. “It seems ridiculous,” he told Saporta Report. “I haven’t heard of anyone anywhere offering incentives for rental at that level of median income.”
No doubt, Buckhead is starved of affordable and even middle-income housing. But, Immergluck said, the City of Atlanta and Fulton County need to use public incentives carefully when filling such gaps.
“There is such a need for below 60 or 50 percent [AMI], but we certainly shouldn’t be using tax subsidy to subsidize middle- to almost upper-middle-income rental,” he said. “It’s just not where the dollar should go. It just shouldn’t be coming from the public purse.”
DAFC documents described the West Paces Ferry Road project site as “underperforming,” although Immergluck and opponents of the incentives package believe, if there’s a demand for such rental units, the market will deliver them with or without government support.
Additionally, when it comes time to settle out the bond, JLB Partners would have to enter into a Land Use Restrictive Agreement (LURA) with the City of Atlanta, which mandates that a project meet the affordable housing promises laid out in Dickens’s ordinance, according to the councilman’s chief of staff Everett Steele. Essentially, the developer wouldn’t be able to procure a certificate of occupancy unless it decreases the price of its “workforce housing” units to be in line with the area median income requirements, he said.
Not so, said Zayac. “The project is exempt from the LURA requirement because it has been in the works for such a long time and was induced prior to the ordinance going into effect,” she argued.
JLB Partners representatives could not be reached for comment, and this story will be updated should responses be provided.
This story was edited for clarity.