Council approves boost to housing trust fund—with an out clause

The Atlanta City Council on Wednesday passed legislation to put another $3.5 million from the city’s general fund into its affordable housing trust—but recent tweaks to the proposal enable the city to rethink that commitment if fiscal challenges arise.

Authored by Councilmember Jason Dozier and backed by 13 of the city’s 15 legislators, the ordinance materialized from the fact that Dickens’ $8 million allocation from the Fiscal Year 2024 budget fell short of meeting the goals enumerated in the legislation that created the housing trust fund.

The 2021 ordinance that formed the dedicated purse called for 1.5% of the general fund—or $11.5 million of the $790 million budget—to go into the trust in FY24, with a full 2% committed from FY25 and onward. Dickens’ office told Atlanta Civic Circle last month that inflation had limited how much the city could funnel into the account this year.

Emphasizing that the city is on solid financial footing, Dozier’s legislation aims to fill that $3.5 million delta. But it also gives the city an out, thanks to a caveat adopted during the council’s June 28 Finance and Executive Committee meeting. The city will properly fund the housing trust “on the condition that the city is not projecting a deficit at the close of the second quarter ending Dec. 31, 2023,” the amended legislation says.

The city’s chief financial officer, Mohamed Balla, worked with Dozier to get that clause inserted into the legislation. “Those guard rails were put in place because when we allocate general fund dollars, they are general fund dollars across the board, and they compete with all our city priorities,” Balla said. “So, as inflation takes a toll, it impacts everything that we do at the city of Atlanta.”

The city today is sitting on an uncommitted fund balance of over $240 million, but Dozier’s legislation puts the $3.5 million allocation on hold until the end of the year. If the CFO’s office finds the city in dire financial straits before then, Balla said, “we could raise our hands and say, ‘Hey, before we do this, we’d like you [councilmembers] to have some additional thoughts and considerations.’”

Although the mayor’s office has celebrated securing $100 million in philanthropic dollars—with $100 million more expected to be raised by the Community Foundation for Greater Atlanta—and approved the issuance of $100 million in bonds to fund the construction and renovation of affordable housing, it’s still important to finance the trust fund, Dozier said. 

“Once those funds get spent, that’s it,” he said of the donations and bonds at the June 28 committee meeting. “So having a recurring fund is absolutely critical, and this is essentially saying that we are continuing to honor the commitment we made through an ordinance in 2021 to fund affordable housing efforts through the general fund.”

Additionally, unlike the bonds and philanthropic funds, the trust fund can be used for initiatives besides housing production and preservation. It’s been tapped to provide property tax assistance to homeowners and grants to nonprofits that offer legal aid in eviction cases or healthy food to food stamp recipients.

Are there better options than the trust fund?

Not everyone is convinced that the affordable housing trust fund is structured in the best way to support affordable housing initiatives.

Sherman Golden Jr., a senior attorney at Thompson Hine and the city’s bond counsel from 1993 to 1997, told Atlanta Civic Circle in June that “the principal problem with this approach is that affordable housing dollars have to compete each year against other critical financial needs of the city.”

He suggested imposing a new city “litter tax” on fast-food restaurants, convenience stores, and liquor stores; additional taxes on short-term rentals or real estate purchases; increased parking fees; or an “upzoning charge” for developers looking to build denser residential projects.

Even City Councilmember Matt Westmoreland, the architect of the 2021 legislation that created the housing trust, said at the committee meeting that the city can’t keep getting into debates about funding the trust each year, and that it should reevaluate the model before next summer’s budget-drafting season. (Dickens’ office almost snubbed the fund last year, before critics pressured his office to direct $7 million to the account.)

“We kind of found ourselves in the same spot two years in a row,” Westmoreland said. “I am certainly open to a conversation that the general fund might not be the best place for these dollars to come from, and we’ve got 12 months to figure it out.”

Atlanta Civic Circle is publishing this story as part of ATL Budget, a civic engagement project in partnership with Capital B, Canopy Atlanta, and the Center for Civic Innovation, to help you understand where your tax dollars will go—and how you can have a say about it. To keep up, follow #ATLBudget on Twitter and Instagram.