By Guest Columnist MIKE DOBBINS, a professor of the practice of planning at Georgia Tech’s College of Design and and a longtime advocate for housing affordability
The city is making constructive strides toward addressing its ever-growing affordable housing needs. Researchers are pretty much in agreement that a stable, safe, and affordable home provides the fundamental and essential grounding for families to make their way into better education, improved health, higher incomes, and a quality of life that holds out hope.
The recent city elections highlighted the urgency for housing fairness, with the candidates mostly all pledging to do something about it. There seems to be a will for searching a way out of Atlanta’s greatest shame, its persistent poverty, dearth of hope, and widening wealth gap.
Recent moves by the Atlanta City Council, led by Councilmember Andre Dickens, beyond ongoing programs, mark the significant shift in priorities, and one hopes that momentum continues:
- Requiring residential developments relying on municipal bond finance rates to include a percentage of affordable units;
- Amending the Beltline overlay district zone to require “inclusionary zoning,” that is, between 10 percent and 15 percent of new residential units in a development must be provided for families classified as eligible based on income – hopefully that new zoning provision will extend to the whole city;
- Reactivating a $40 million housing opportunity bond fund launched in the Shirley Franklin administration in support of producing affordable units – hopefully that amount will expand, with the discussion below suggesting a way how;
- Amending the R5 zoning district to allow garage conversions or accessory dwelling units (ADU), that is, small houses on the same lot as the primary house, to provide for more affordable options as well as a means to support the principal owner’s mortgage and other payments;
Read on to understand the BeltLIne’s opportunity to begin to meet its goal.
The BeltLine’s prospects for being able to step up face two major hurdles: Land cost and money.
First, the hot market, partly caused by the BeltLine’s own relentless hype, drives up land costs and taxes, the rise of which is the BeltLine’s life blood through its BeltLine Tax Allocation District. The conflict of interest for the BeltLine is obvious: How can an agency that funds itself by pumping up property values and taxes deliver land at below market rates?
Second, the money, where could it come from? As it happens, by rearranging its priorities the Beltline could dedicate much more of its considerable resources toward achieving its goal. But this isn’t easy and would take two major moves, one related to its revenue stream and the other related to its streetcar priority.
On the first, the Atlanta BeltLine board and its boosters who do support the affordable housing imperative need to consider the negative impact on housing affordability caused by the agency’s TAD revenue stream. The shifts necessary to do this would call on the BeltLine to damp down its relentless, albeit brilliant, hype that portrays itself almost as an alternate city within the city. This picture, in fact, has contributed to the speculation that boosts property values.
Concurrent with muting its trumpets, the BeltLine might need to accept a more modest or more protracted flow of its tax revenue. For example, is it good, really, for the affected neighborhoods and the city to support the BeltLine’s disruptive drive to produce hyper densities next to settled single-family neighborhoods? Its activities have been shown to accelerate property and tax values with predictable, usually unwanted, and unnecessary neighborhood displacement impacts.
At the same time, should not the BeltLine redirect a major portion of its revenues toward acquiring properties as quickly and as deftly as it can, a tactic that Invest Atlanta has been utilizing for some time now in Westside neighborhoods? The result would allow the BeltLine to sell or gift land to affordable housing developers at rates where the affordability mandate could be met and hopefully strengthened.
And about the money, if the BeltLine were to redirect resources it has currently committed to streetcars, it could make a big dent in its obstacles to meeting its affordable housing mandate. The following lays out the case for such a transformation in purpose.
Overall, to date the BeltLine has expended about $600 million, most of it on the East side and most of it on real estate, parks, trails, and other amenities for the ever hotter East side that emerged after the 1996 Summer Olympic Games and fired up as the BeltLine came along 10 years later.
According to its websites, the BeltLine originally anticipated generating about $3 billion in TAD revenues over the 25-year life of the program, about half over by now. Partly due to the impact of the Great Recession, that projection was cut in 2014 to about $1.5 billion. The overall cost of the program, including affordable housing, parks and trails, and transit is estimated at $4.8 billion, thus a funding gap of about $3.3 billion.
The status of the BeltLine’s streetcar program further casts doubt on its viability. The great bulk of the BeltLine’s program cost was slated for building a two-track streetcar system, originally for the 22-mile loop that goes around, but not to, the city’s major concentrations of destinations. The BeltLine completed a Tier One environmental impact statement for that concept seven years ago, with the requirement to complete a Tier Two EIS, the schedule for which seems to be in limbo or may have been abandoned.
Beginning in about 2010, after significant investment in the loop idea, the BeltLine began to listen to those who had tried for years to point out that a transit system needs to get people to where they need to go. Absorbing that wisdom, the BeltLine conducted a whole new study, completed and adopted by the city council in 2015, that called for a 50-mile, two-track streetcar system, termed the Atlanta Streetcar System Plan (SSP). Touted as Atlanta’s plan for transit, however, it does not begin to serve the city as a whole. (see map that locates the scope of this plan in the context of the city boundaries)
The current priorities for the SSP call for about 16 miles of streetcar, grouped into four subsets: Eastside, Westside, Midtown and Downtown. Unlike the loop, this concept actually might allow some people to get from their origins to their destinations. The required environmental review for each of the four groups is underway, with end dates uncertain.
Current rules of thumb for the cost of urban streetcar systems run at about $100 million per mile. Using the rule of thumb cost estimate, the 16-mile phases would require about $1.6 billion, with the whole package costing about $5 billion. The BeltLine has been reluctant, or at least coy, about dealing with what the streetcar system might cost and how it might be funded since its $1.4 billion budget doesn’t come close to meeting its funding needs.
It is noteworthy that the streetcar has been unquestioned given from the very beginning. The BeltLine has given no consideration for a truly multimodal, citywide transit system, which now MARTA and hopefully the city’s new transportation plan should address. Any future planning must take into account the impacts of major shifts in travel technologies and behaviors, now well underway. And these studies should certainly review the viability, feasibility, desirability, serviceability, and capital and operating costs of the BeltLine’s clinging to streetcars as the city’s only transit option. The need for these studies is daily underscored by development investment and settlement patterns that overwhelmingly favor Downtown, Midtown, Buckhead, and increasingly the East side and airport areas, where transit needs are and will be highest.
Indeed, it has been reported that MARTA is planning a big boost in service to the high intensity corridor from its Arts Center Station through Midtown and Downtown to the Turner Field redevelopment area and the long under-served neighborhoods nearby. Reflecting basic transit planning principles and commonsense, MARTA will build a bus rapid transit (BRT) system that is certain to generate high ridership, provide real travel options, and reduce auto congestion. Its cost will be about $5 million per mile, or 1/20th of what a streetcar would cost.
The point of this discussion is to challenge whether hewing to its ever-dimming prospects for actually building and somehow operating streetcars is the best use of BeltLine resources. Instead, perhaps it’s time for the BeltLine and the rest of us to get real about the streetcar component of its program and redirect real money to meeting the real housing needs of thousands of Atlanta families.
If, for example, over its 12 remaining years the BeltLine were to commit just half of that $1.6 billion first phase streetcar program cost to housing, again using conventional rules of thumb to make rough approximations, the funds could build about 4,600 units, thus meeting at least one of the BeltLine’s stated goals. It could then join wholeheartedly into the challenge of housing all of Atlanta’s people and particularly those with limited means. Worthy of a celebration!
Note to readers: Mike Dobbins’ work at Georgia Tech focuses on urban design and planning. Dobbins previously served as Atlanta’s commissioner of the Department of Planning, Development, and Neighborhood Conservation.
I definitely disagree with Dobbins on this one issue but I do it with great respect. He’s a treasure. I saw him speak at Tech when his “Urban Design and People” book was released and it was a major influence on me as an urban writer. His argument for prioritization on affordability is inspiring (as he so often is), even if I disagree with his take on the transit issue.
It’s healthy to challenge ABI’s thinking – and that of City leaders, who really call the shots.
A couple of money questions for Prof. Dobbins on his affordable housing proposal.
1. Where does he think ABI could find $800mm over the remaining life of the TAD? The only potential source of that sort of money would be Federal Transit funding, which could not be siphoned off for housing. The Beltline TAD is expected to generate $34mm of taxes this fiscal year. That cash first has to service bonds that fund the land acquisition and meet the famous APS PILOT payout and other obligations. There is only $11mm of TAD money left over after that. ABI’s own operation spends almost all of the rest. Sure, one might trim ABI’s expense if there’s no transit to plan for and the TAD tax revenue should continue to increase. Maybe one day in the 13 or so years before the TAD expires, Ponce City Market and Alexan on Krog will actually pay taxes. (Tax exemptions on developments in the TAD handicap the project quite significantly.) But $800mm, seriously?
2. Is $175,000 per unit the necessary public subsidy for providing affordable housing? ($800mm / 4600 units) Renters at the 80% of median income level are expected to pay $950-1200 per month in rent, which should surely support the majority of the cost of a unit. If I recall correctly, ABI was hoping to bring on affordable units with a subsidy of $35,000 each – not $175,000. For comparison, Invest Atlanta’s most recent affordable housing tax subsidy, for the Edgewood Transit-oriented development, was $60,000 per unit, but that deal was designed by the developer, not created primarily for economical provision of affordable housing.
At $35,000 per unit subsidy, ABI would ‘only’ have to find $161mm to meet its 4600 unit additional goal. It’s not going to happen, because the TAD simply won’t generate that sort of discretionary cash, but it’s more likely than finding $800mm.
Thanks, Julian, for your response, insights, and questions.
What my suggestion aims at is consideration of prioritizing ABI’s resources toward affordable housing outcomes, which it can do, and away from streetcars, which it cannot (and for some reason never considering the range and mix of modes suitable and feasible for meeting varying transit needs, costs, and timelines).
Affordable housing, trails/parks, and streetcars has always been the three part mission. Responding to right now community needs, why not aggressively pursue what can be actually accomplished: affordable housing, aiming at meeting the 5600 unit goal that can be met? Such a shift, too, could accelerate completing the trail mission by eliminating having to build them to meet two track streetcar specifications. Trail costs without that provision would be reduced by some 75%, and the timeline for completion would be shortened dramatically.
On the numbers, I used information from ABI’s website, which projects a $1.4 billion realizable form the TAD over the remaining life of the program. I know it’s complicated, but as a matter of policy committing half of that take to meeting ABI’s housing goal seems to get there. With a staff of some 35, ten of whom at director level or higher, surely there’s enough knowledge fire power to figure it out. Keeping in mind that we have 20 or 25 percent of our citizens living below the poverty line, the depth of subsidy could then provide support for people at 50 or even 30 percent of AMI.
I’m just saying………
What good is affordable housing if residents can’t afford to get to jobs, school, healthcare and other services. Transit is essential to creating equity in our city. This constant drumbeat from Mr. Dobbins to abandon transit on the BeltLine is antithetical to everything we are aspiring to be in Atlanta.
With rising housing costs and 25% percent of our citizens at or below the poverty level, housing affordability is our most pressing need. I agree that transit is vital.. Transit mode options, however, are expanding even as travel needs and behaviors are changing rapidly. To hold to a 20 year old notion that streetcars are the only “solution” that can be considered seems unwise.
Why must transit on the beltline be via streetcar? would it not be cheaper to use buses – we can easily design buses that are high tech and look like streetcars. buses can be electric without the power lines, and since they wont interact with streets and associated traffic problems. surely this is significantly cheaper than streetcars.
I rely primarily on walking and transit to get around in Atlanta. With regards to transit, what matters most for me is the frequency of buses or trains and whether or not they’re stuck in traffic. People who use transit on the BeltLine won’t have to share lanes with automobiles, a big plus. This applies regardless of whether the BeltLine uses buses or streetcars. Like Mike, I think vehicles like the Tech Trolley would be a far better choice. In addition to lower cost, service could be launched soon. Streetcars were selected as the “locally preferred alternative” in 2003. Much has changed since then. The BeltLine has invested a considerable amount of time and money in developing plans for the streetcar, it’s far, far less than the difference in cost and time to completion between streetcars and trolleys.
Thanks Mike for a very helpful analysis of the situation. I tend to agree with you regarding the viability of streetcars on the Beltline. During the initial planning for the system during the Franklin Administration, we struggled to make the operations numbers work; we had to create extremely rosy scenarios concerning density along the Beltline path that turn out to have been extremely unrealistic (look no further than the pushback on the proposal for what I would consider rather modest density at 10th and Monroe). If ABI has a viable business case for fixed rail transit on the Beltline I would love to see it. I just can’t see how you make the numbers work.
On the housing affordability issue, I would like to caution us to not fetishize affordability within the Beltline district. After all, it is ultimately an artificial geography that has little to do with how people actually live. I would encourage us to look at actual neighborhoods and see if we can find ways to preserve existing affordability and create new affordability in cost effective ways. For example, despite concerns about gentrification on the West Side, there remain huge swaths of properties (some of them already owned by public entities) that could be secured relatively inexpensively and then used to create new affordability over time. My big fear at this point is that we will dedicate significant resources to subsidize affordability along the Beltline while underfunding options that could yield much larger quantities of affordable housing down the line.
I think you raise a solid point with the need for affordability beyond the Beltline. We definitely need that in other places around the city. With the Beltline what’s important with housing, in my opinion, is a set of tools that prevents any increase in the hardship of housing security among current residents — including renters.
Also of importance IMO is to make sure that, where large-scale new housing is happening in the overlay, we get affordable units in there so that the population growth isn’t all happening among wealthy people. In fact I think its essential to the equity aspect of both growth and transit access. The best transportation plan is always a good land-use plan — meaning we need to get people in walkable distance to nearby destinations and transit lines that take them to far-off ones. We need to be making those connections in emerging land-use and transpo options equitable.