As hedge funds snap up residential property in Atlanta, driving up home prices and rents, local philanthropic groups are fighting an uphill battle to provide affordable housing, especially on the rapidly gentrifying Westside.
Danny Shoy, who oversees the Arthur M. Blank Family Foundation’s work on Atlanta’s Westside, knows that struggle well.
The Blank Foundation late last year committed $2.4 million in grants aimed at increasing affordable housing and financial security for English Avenue and Vine City residents. That investment offers significant boosts to local nonprofits that build and preserve housing, offer legal assistance to defend against evictions, and run jobs training programs, but it still pales in comparison to the cash deep-pocketed investors are shelling out across metro Atlanta.
With a focus on predominantly Black communities, like Westside neighborhoods, investment firms accounted for more than a third of all cash home purchases in the metro area last year, the Atlanta Journal-Constitution reported. Meanwhile, the region loses thousands of affordable units annually.
“What we can’t control is speculators—investors who come from beyond Atlanta and within Atlanta,” Shoy said in an interview. “The intention [of the new grants] isn’t necessarily to try to control or stop the uncontrollable; it’s to try to mitigate it to create balance.”
To the Blank Foundation, that balance requires more mixed-income communities with greater home ownership by local residents, Shoy said, noting that 67% of English Avenue and Vine City residents are renters, and most earn less than 60% of the area median income—or under $58,000 for a family of four.
Of the $2.4 million in grants, the Blank Foundation allocated $1.04 million to the Westside Future Fund, which builds and renovates affordable housing, and $400,000 to Enterprise Community Partners and $310,000 to the Atlanta Neighborhood Development Partnership, which develop affordable units to rent and buy.
It gave another $150,000 to the Atlanta Volunteer Lawyers Foundation to beef up its eviction prevention efforts; $200,000 for On the Rise Financial Center’s financial coaching assistance to Westside residents and the Westside Future Fund’s homebuyer assistance program and Westside Works’ jobs training; and $300,000 for social services organization CHRIS 180’s healthcare efforts.
The Westside Future Fund has spent upwards of $20 million buying 189 vacant or blighted properties on the Westside to provide increasingly scarce affordable housing and offset the impact of wealthy investors driving up prices.
Of 69 severely deteriorated single-family homes it’s purchased, 25 have been razed or are scheduled to be, due to safety concerns, 18 have been renovated and either resold or rented, while 29 are being renovated or waiting on permit approvals, the Westside Future Fund said in a March 16 blog post.
John Ahmann, the Westside Future Fund’s chief executive, told Atlanta Civic Circle in an interview, that, with market forces out of the organization’s control, it’s crucial for the nonprofit to purchase as much of this property as possible as soon as possible so it can be made into—and preserved as—affordable housing.
The Future Fund bought some of those properties from the city of Atlanta for cheap, but got most of them from hedge funds for market rates, he said. But the investment firms typically focus on inhabited single-family homes, not the blighted properties the organization focuses on transforming.
Lee Harrop, the Future Fund’s vice president of real estate development, added that, sometimes, when the organization attempts to buy property, they’re competing with the hedge funds, “but it is not my job to participate in a bidding war.”
More often, said Ahmann, investors are calling the Future Fund with offers.
“They want revenue-generating property, and so we’re getting calls every day to buy out our multifamily portfolio,” he said. “We tell them no.”
As they evolve, Westside neighborhoods like English Avenue and Vine City will inevitably become dominated by market-rate housing, Ahmann said, “which is why we’re trying to lock it down now”—because “mixed-income [development] delivers the best outcomes for people’s lives.”
Shoy, of the Blank Foundation, said these philanthropic contributions to the fight for housing affordability is “additive” to public efforts by filling in some of the gaps left by government housing initiatives.
“Government can’t do it alone,” he added. “I think that’s the beauty of philanthropy; it is the lever that oftentimes has the ability to take greater risks, and risk becomes important because it’s hard to innovate and not take risks.”
Government projects are often hindered by bureaucratic red tape restricting how money can be spent and on what, Shoy said, while “philanthropy can be more nimble.”
“That means it’s imperative for those of us working on the private side to be very thoughtful about where we can create leverage, where we can fill the gap,” he said. “A strong tide lifts all boats, but oftentimes, Westside residents don’t have boats; they don’t even have oars.”