A Fulton County proposal to pull out of the Westside Tax Allocation District (TAD) has ignited a battle over the future of affordable housing in some of Atlanta’s most underserved neighborhoods — and whether it’s worth diverting property tax revenue to subsidize lower-priced housing at the expense of funding for schools, healthcare, and public safety.
In short, TADs capture the growth in property tax revenue from rising property values. The city, county and public school district in the TAD must agree to forgo that revenue, which is then redirected to private developers to subsidize economic development in underinvested communities. Fulton’s share of the Westside TAD money is managed by Invest Atlanta, which often uses it to back bonds that finance residential and commercial projects in neighborhoods like English Avenue and Vine City.
Fulton is supposed to participate in the Westside TAD through 2038, but the proposed withdrawal resolution says the Westside TAD special fund already has a balance higher than what’s needed to pay off the bond debt. Fulton’s share of the excess balance was about $5.85 million a year ago, it adds. Even so, the county anticipates contributing an additional $9.4 million in tax revenue this year. So what happens if Fulton’s Board of Commissioners votes to “decline participation in new projects” in the TAD?
“Best case scenario, it would slow affordable housing development. Worst case, it would stop it altogether,” said Courtney English, Atlanta Mayor Andre Dickens’ interim chief of staff and the former Atlanta Public Schools (APS) board chair.
The city currently is seeking Fulton’s approval to use $10 million in TAD funding to subsidize private development projects slated to add a total of 182 affordable housing units on Centennial Olympic Park Drive, James P. Brawley Boulevard, Vine Street, and Sunset Avenue.
All four projects are stuck in limbo until the county commissioners vote on the measure, English said. “Now is the wrong time to pull out of the TAD,” he added, because potential federal budget cuts for housing initiatives are complicating the Dickens administration’s goal to build and preserve 20,000 affordable housing units by 2030. English would rather see the city extend its eight existing TADs until 2055.
Since its 1998 inception, the Westside TAD has received $96 million in diverted property tax revenue from Fulton County. That’s helped to finance 32 residential projects that have delivered 1,332 affordable housing units in English Avenue, Vine City, and western downtown Atlanta, according to documents the mayor’s office shared.
But Fulton Commissioner Bob Ellis, who co-authored the TAD withdrawal resolution, thinks it’s high time to reroute that funding stream back toward the county’s school districts, healthcare facilities, and other public services. “Affordable housing is a big issue,” he told Atlanta Civic Circle. “Healthcare and public safety are also big issues.”
For instance, South Fulton needs a hospital, Ellis said, to make up for the loss of Atlanta Medical Center, which its owner, Wellstar Health System, shuttered in 2022. “We also have public safety needs that we have to meet,” he said. The Fulton County Jail, for instance, needs funding for an overdue $300 million renovation, after years of overcrowding and inmate-safety concerns.
But one Atlanta School Board candidate, Stephen Owens, is questioning whether the developers who benefit from the TAD really need public money, especially as Atlanta Public Schools weighs closing additional schools.
“Can we afford to keep diverting dollars meant for schools so that developers can make more money?” he asked on Instagram. APS declined to comment for this story.
Owens contend that developers could build the housing without public tax dollars. “How do we square the fact that Atlanta Public Schools is planning to close dozens of schools over the next few years with the fact that the mayor’s office is asking to extend a program that will give your local property taxes — instead of to schools and fire departments — to business that would probably be profitable building in your area anyway?” he asked in his post.
English, the mayor’s advisor, said some schools risk closure because affordable housing is so scarce in those districts that it reduces the student population. Building more housing could fix that, he said. “The reason schools are empty on the south [and west] side is because people have been displaced, because they can’t afford to live in the community.”
Fulton’s bid to pull out of the Westside TAD, he added, reflects the commissioners’ ignorance of the financial challenges for lower-income communities. Ellis represents the county’s wealthier northern suburbs, English pointed out.
“Anybody who thinks that the TAD has done its job and should be ended hasn’t talked to people on Campbellton Road, Martin Luther King Jr. Drive, Metropolitan Parkway, or the residents in Mechanicsville or English Avenue or Vine City,” he said. “It’s fascinating that people who don’t live in those areas are telling people who do that making those investments now costs too much.”
Still, some critics see TADs largely as gentrification engines — funding mechanisms that hike housing costs more than they foster affordability. Former Invest Atlanta board member Julian Bene called the city’s TADs “slush funds” that allow the city to give money to developers who don’t really need it to turn a profit.
TADs “are only justifiable if they are viewed as ‘priming the pump’ in disinvested and distressed areas,” said Dan Immergluck, a Georgia State University professor emeritus and housing expert. “They are not justified if they are simply going to steal revenue from schools and basic city and county services elsewhere,” he said in a comment to a recent Maria Saporta column in SaportaReport about the Westside TAD controversy.
Whether the Westside TAD is a handout to developers or an economic lifeline may depend on who you ask and where they live. What’s clear is that the county’s decision — expected in coming weeks — could realign the trajectory of some of Atlanta’s most disadvantaged neighborhoods.
If Mr. English is so focused on funding affordable housing, why has the Mayor not pushed the County to fix its tax appraisals that are allowing large commercial properties to be appraised often at 50% of their market value (when the standard is 90%+)? This is sapping the city and schools of hundreds of millions of revenue annually, a substantial chunk of which could go to affordable housing. Instead of relying on funneling property tax revenue out of gerrymandered tax allocation districts that can *only* be used in those same districts, returning the revenue to the general revenue fund (and to the school system) would allow the dollars to be used where they most make sense, anywhere in the city. Affordable housing should not be relegated to these oddly shaped (and sometimes serpentine) districts, where the land values are often far higher than other places, making the cost of the affordable housing development more expensive, and the use of taxpayer dollars less efficient.
The TADs that Mr. English is proposing to extend have already been in place for almost 20 years. If the City doesn’t have a plan to allow them to be closed out in 10 years (the original term) and provide the increased tax base for the city, county, and schools that is the entire purpose of tax increment financing in the first place, what is extending them even further going to accomplish?
These TADs are just another financial device to abstract from the clear need for higher tax revenue to fund the range of needs in the community. Starving Peter to pay Paul won’t work in the long run.