Atlanta Explores How to Better Collaborate on Affordable Housing

By Philippa Maister

July 15, 2024 at 05:29

Atlanta Housing’s land holdings can be catalysts for development, providing attractive sites with low upfront costs for projects that prioritize affordability,

Like many major cities across the country, Atlanta is in desperate need of affordable housing. A new report from an Urban Land Institute advisory group commissioned by the city’s housing authority, Atlanta Housing (AH), explores opportunities for the city to work more effectively with developers and partners to address this need, highlighting the many land and financial resources already available to developers if used properly.

The agency commissioned the report to gather expert advice and recommendations to help it achieve its ambitious goals, which include creating or preserving 10,000 affordable housing units within five years. The agency has the full support of Mayor Andre Dickens, who has set a goal of building 20,000 affordable housing units within eight years when he takes office in 2022.

The panel consisted of national experts in real estate, finance and land use planning. Its report noted that AH has unique assets, including more than 350 acres of vacant and underutilized land in the city. The total cost of its development pipeline was estimated at more than $2.1 billion, not including infrastructure. The city also has a housing voucher program. These assets, the report said, “provide excellent leverage opportunities—the greater the leverage, the greater the affordability, and the more likely AH is to achieve its goals.”

The agency’s fiscal year 2025 budget of $534 million was recently approved, which will fund the construction of 1,350 affordable housing units and the preservation of 1,114 others.

“AH’s land holdings can be catalysts for development, providing attractive sites with low upfront costs for projects that prioritize affordability,” he noted.

To attract and retain quality developers, the panel stressed the need to publish clear guidelines for developers and partners that include regulatory requirements and timelines. It would also be helpful to provide developers with a clear picture of funding sources and potential financial support. “AH can reward projects with greater financial support based on higher levels of affordability, which would incentivize developers to prioritize the most vulnerable populations,” the report noted, citing the example of San Antonio.

The report also recommends streamlining the process by adopting a true lead developer model and designating a single lead developer responsible for developing the entire site and selecting co-developers as needed, as well as clear performance criteria that favor shovel-ready projects.

Among its other recommendations, the report also recommends reorganizing AH’s real estate functions along the lines of private sector development companies, including decision-making hierarchies, clear investment criteria and internal reviews of projects before they reach senior management.

“The committee recommends establishing a well-defined pipeline, carefully organized based on factors such as development timelines, financing barriers, and partner responsiveness. This strategic approach ensures that resources are directed to projects with the greatest potential for success while balancing other HA objectives,” the report says. It also encourages the agency to improve collaboration by becoming an active co-developer, not just a passive landowner, to help more effectively address challenges and interactions with external agencies, as well as accelerate infrastructure planning.

“AH has a long-standing and valuable staff with expertise in the traditional HUD-inspired development model. However, as AH ventures into new models and funding sources, there will be a knowledge gap,” the report says. It suggests targeting development initiatives and hiring specialized consultants to fill this gap.

“AH’s ambitious goal of creating and preserving 10,000 affordable housing units requires a multi-pronged, strategic approach that transcends traditional financing models and emphasizes both community impact and financial sustainability. To navigate this exciting path, AH’s next steps require a phased approach,” the report said. In addition to prioritizing Tier 1 projects, it also advised the agency to secure a diverse portfolio of financing sources, exploring the potential of private equity, federal grants, land swaps and other creative financing mechanisms.

Affordable housing is not just a matter of civic duty. The lack of available housing has been identified as the second most significant issue affecting Georgia’s ability to attract, develop and train a competitive workforce by the Georgia Chamber of Commerce Foundation. The Foundation noted that at the same time as the state has experienced “unprecedented” economic growth over the past five years, the housing stock has declined by more than 60 percent.