The city of Atlanta’s development authority approved a massive infusion of public tax subsidies for mostly private developers to build and renovate nearly 1,900 affordably priced rental units last week—which City Councilmember Matt Westmoreland called a historic pivot by Invest Atlanta at the council’s direction to fund affordable housing.
Invest Atlanta, the city’s economic development arm, plans to award $342.1 million in tax subsidies to a dozen developers and real estate investors to build and preserve 13 multifamily complexes with a total of 1,981 units—including 1,834 units to be priced as “affordable” by city standards.
The public funding is expected to support projects by local firms, like Columbia Residential and Stryant Investments, and national ones, such as Pennsylvania-based Pennrose, Ohio-based National Church Residences, and New Jersey-based Michaels Development Co.—part of the team tapped to revamp the Atlanta Civic Center—to build or refurbish apartments on the Westside, Southside, Old Fourth Ward, and downtown, among other communities.
Other local players are: Smith Real Estate Services, Pansophy Capital, Gorman & Co. (with Chicago’s Red Rock Capital), along with national firms Wingate Capital Associates and Woda Cooper Development. Atlanta Housing is partnering on some projects.
The deals represent “the largest affordable housing agenda—in terms of the number of projects, dollars invested, total development cost, and the number of units—in the history of Invest Atlanta,” the development authority’s spokesperson Katrice Mines told Atlanta Civic Circle on Friday.
The total development cost is projected at $606 million, Mines said in an email. That means the city of Atlanta intends to help fund over half of that with the $342.1 million in tax subsidies. That includes: $325 million in tax-exempt bonds, $6 million from a relatively new housing opportunity bond program, $8.5 million in tax allocation district incentives, and $2.6 million in other tax credits.
During separate meetings Thursday, the boards of directors for Invest Atlanta and its subsidiary, the Urban Residential Finance Authority (URFA), signed off on 20 different development proposals, though items on the URFA agenda are subject to a second approval, Mines said.
The baker’s dozen of affordable apartment complexes is expected to be ready for occupancy starting in 2025.
All of the 1,834 affordable units will be priced for families earning 80% or less of the area median income (AMI), or $77,120 for a four-person household. Of those, 118 will be priced for tenants earning 30% or less of the AMI, or $28,920 for a family of four.
When realized, these 13 new apartment developments will achieve about 10% of Mayor Andre Dickens’ campaign promise to build and preserve 20,000 affordable homes by 2030.
The city’s massive new investment in affordable housing signals a new focus for Invest Atlanta, which is best known for skyline-altering mega developments like the residential and office towers sprouting up all over Midtown, said Westmoreland, an at-large city councilmember and former Invest Atlanta board member.
While it’s important for Invest Atlanta to prioritize economic development by helping fund high-profile commercial and residential projects, he said in an interview, “there has to be an equal or greater focus on addressing Atlanta’s affordability and socioeconomic challenges.”
Invest Atlanta’s move on Thursday “was awesome,” he said, because it signaled the “intentional shift” the council pressed its economic development agency to make in 2019 when the city reauthorized it.
The council passed an ordinance then directing the development authority to take a “new approach” and add affordable housing to the real estate deals it uses tax dollars to subsidize in an effort to mitigate growing inequities and “opportunity gaps” for Atlanta residents.