It’s been two years since Frank Fernandez, the CEO of the Community Foundation for Greater Atlanta, announced that the nonprofit had secured an “unprecedented” $100 million in donations from the Robert W. Woodruff Foundation and the Joseph B. Whitehead Foundation to build and preserve housing for lower income people — and that the group planned to raise another $100 million.
Since then, the Community Foundation has raised $54 million of that $100 million match — and so far, it’s allocated $121 million to build and renovate nearly 5,000 affordable housing units across metro Atlanta, according to Sarah Kirsch, its managing director of housing funds.
The Community Foundation has closed 24 deals to provide $64 million in gap funding for affordable housing projects to 18 nonprofits and six for-profit developers since late 2023, Kirsh said. These projects will ultimately offer 2,356 rental and homeownership units priced as affordable for households earning as much as 80% of the area median income ($86,000 for a family of four) or as little as 30% of the AMI ($32,250) or below.
Thirty percent of those units — spanning from Decatur to the Westside — are occupied, 36% are under construction, and another 34% are in the pre-development stage.
The Community Foundation has another 32 deals in the pipeline, worth $58.4 million. It expects to close on six financing deals worth $14.4 million by the end of July to develop 505 affordable housing units from Doraville to Old Fourth Ward.
The nonprofit is negotiating an additional 16 deals worth $44 million for 1,880 affordable housing units.
“We actually stopped taking applications at the beginning of this year, because we weren’t sure that we would have the funding to meet everything in our pipeline,” Kirsch told Atlanta Civic Circle in an interview. But now, she added, the foundation believes it can raise the remaining $46 million of its $100 million pledge match from investors by the end of the year.
How it works
To disburse its $200 million pledge for affordable housing, the Community Foundation created two affordable housing financing streams: GoATL, a loan fund for for-profit developers building affordable units, and TogetherATL, a fund to finance purely nonprofit development through either grants or no-interest loans.
The TogetherATL-subsidized loans come due if the affordable units stop being affordable, due to an ownership change, or if the owner allows them to deteriorate to the point that they are uninhabitable.
It costs roughly $30,000 to subsidize a single affordable housing unit, Kirsch said. Higher-priced rentals and home-ownership units cost more, while lower-income units cost less.
What’s on deck
“Investors are allowing us to call on their money when we have projects to invest it into,” she said. “We load it out at 3% to 6% [interest] rates — and then, either in 10 or 15 years, depending on what type of investor they are, they’re going to get their money back. We’re going to manage it to, say, 3% to 4% return on investment.”
To keep its list of affordable housing deals growing, the Community Foundation must keep reeling in financing capital. It’s raised $14 million from Truist Bank, its largest contributor, millions more from Wells Fargo, Fifth-Third, and other financial institutions, plus $10 million from “another foundation who likes to remain nameless,” Kirsch said. The foundation also put $5 million of its own cash into the effort.
Once the Community Foundation raises and commits the whole $200 million, Kirsch thinks it can replicate this investment model to subsidize financing for more affordable housing development.
“[Investors] almost look at this as recyclable philanthropy,” she said. “You’re going to put your money out, support this work, get your money back — and then you go and do it again.”
Editor’s note: The Community Foundation for Greater Atlanta is an Atlanta Civic Circle funder.
Bravo Community Foundation for Greater Atlanta!
This story makes me feel good about my city.