A year after City of Atlanta leaders launched a $100 million housing opportunity bond program, an extra-governmental commission of planning and development experts this week teased the idea of scaling the program up to as much as $250 million.
In January 2021, the Atlanta City Council approved then-Mayor Keisha Lance Bottoms’ executive order to issue $50 million in bonds for affordable housing initiatives and authorized and pre-validated additional bonds that could be issued later. Ultimately, the goal was to deploy up to $100 million over two or three years.
The idea isn’t new; some city officials had argued for a bond package that size years ago, but the proposal faltered. Mayor Andre Dickens even campaigned with a promise to produce a new $250 million housing opportunity bond.
Passing even the $100 million bond program last year was a challenge, due in part to the economic volatility spurred by the pandemic. Now though, as the nation’s economy stabilizes, bolstering the program looks more feasible, according to the Atlanta Housing Commission’s chairman, Andy Schneggenburger.
Not only do the economy and tax revenues “seem to be a bit more stable than everybody thought they might be,” he said in an interview with Atlanta Civic Circle, “but also we have a different administration and a whole lot of new city council members, most of whom have been pretty on-point with affordable housing as part of their platforms.”
But before formally recommending additional bond legislation to the city council, the commission will assess the current housing opportunity bond program to determine “how it’s operating and the degree to which money has gotten out the door over the past year,” Schneggenburger said.
According to the city’s Housing Affordability Tracker, a tool launched by the Bottoms administration to monitor affordable housing investment, as of Sept. 30, housing opportunity bonds accounted for nearly 5%—roughly $28 million—of the roughly $596 million the city has committed to the construction and preservation of affordable units since the beginning of 2018.
Increased bond funding could help develop and restore thousands more units. It would also better complement the affordable housing trust fund that city council members recently approved.
By fiscal year 2025, when the trust fund would take full effect, the city will be funneling a full 2% of its general fund to the trust fund for affordable housing programs annually. If it were totally effective today, the trust fund would pull some $14 million from the city’s $710 million purse.
Since the trust fund offers grants instead of loans, it could jump start developments that charge lower rents, Schneggenburger said.
“The housing trust fund could play a huge role in helping to facilitate development of lower-income units, because it can provide the kind of equity on a project basis that would take some of the heat off of the housing opportunity bond financing,” Schneggenburger said.
Projects using bond financing are “quite capable of financing the development of units [priced for households earning] 50% or 60% of the [area median income],” he said. “It starts to get a lot tighter … when you’re trying to do rent at 30% of the AMI.”
Schneggenburger added that he hopes the trust fund will spur additional giving from the nonprofit sector. It’s intended as “a mechanism that will give the philanthropic sector in Atlanta confidence that they can make philanthropic investments into that trust fund to help capitalize it, so it’s not just relying on these very small budgetary allocations from the city,” he said.