The trouble with in-lieu fees
Atlanta Civic Circle last week published an investigation revealing how the city of Atlanta shortchanged itself by at least $3.7 million by allowing the Gulch developer to buy its way out of the affordable housing commitment for a new apartment tower. The money that the city missed out on could have gone toward affordable housing initiatives.
Gulch developer Centennial Yards — a company formed by California-based CIM Group to build out the nearly 50-acre pit of parking lots and railroad tracks downtown — pledged to earmark at least 20% of its new residential construction for affordable housing in exchange for tax breaks and incentives worth up to $1.9 billion from the city of Atlanta.
But the Gulch redevelopment deal also included an opt-out clause. Rather than creating 61 affordable units at the new Mitchell apartment tower, Centennial Yards paid the city just over $8 million — or about $132,000 per unit — in “in-lieu fees” so the city could create the affordable housing itself.
The problem: The city calculated the in-lieu fee amount based on 2017 construction costs, because the planning department never updated its figures after the city’s first inclusionary zones were created that year. Consequently, Centennial Yards got a bargain to sidestep the affordable housing commitment.
Had the city accounted for rising national construction costs and other market variables, it could have charged Centennial Yards at least 40% more — or about $196,000 per unit — for the in-lieu fees. That adds up to $11.76 million for 61 units — more than $3.7 million over the actual amount the city collected.
After we published this story, I joined WABE host Jim Burress on All Things Considered to discuss how the city got stiffed — or stiffed itself — and what can be done about it now. That’s now being debated by city officials, local housing experts and government watchdogs.
Julian Bene, a former Invest Atlanta board member and critic of the Gulch deal, believes the city should be able to retroactively charge Centennial Yards a higher, more market-appropriate in-lieu fee.
But Atlanta City Councilmember Matt Westmoreland isn’t sure that’s possible. He told Atlanta Civic Circle he’d ask the city’s attorneys.
Westmoreland added that he would explore whether the city could boost its in-lieu fees to make them “prohibitively expensive” for opting out, as public finance attorney Sherman Golden suggested in an earlier interview. That would effectively force developers doing tax-break deals with the city of Atlanta to include affordable units.
📸: Sean Keenan
ARC has a new way to explore housing data
The Atlanta Regional Commission (ARC) has updated the way it illustrates the fluctuations in the metro area’s turbulent housing market.
The new Metro Atlanta Housing Strategy Toolkit allows even non-data wonks to surf through local housing data and visualize how much the region has changed over the years. By breaking down the metro area’s many submarkets into categories like “rapidly changing urban neighborhoods” or “higher priced suburban neighborhoods,” an interactive map color-codes the way Atlanta communities are evolving, as the cost of living rises.
Click through each submarket for easily digestible datapoints — like the median home-sale price or cost per square foot — and policy suggestions for navigating the housing crisis.
To boost housing stock in Atlanta’s “higher-priced urban neighborhoods,” for instance, ARC recommends that the city “mandate and incentivize affordable housing development” — like, perhaps, revisiting its inclusionary zoning and in-lieu fee policies — and “allow innovative housing types.”
Beltline plots more “affordable” housing around the trail
The Atlanta Beltline has filed plans asking the city of Atlanta to approve building 1,100 homes around the Westside Trail, according to CoStar News. The development would materialize across 32 acres located at 425 Chappell Road, in Bankhead.
At least 30% of those new residences — which will be both for-sale and rental units — would be priced as affordable to middle- and lower-income Atlantans. The rental units would be priced at 50% to 80% of the area median income (AMI), while the homeownership units would command price tags affordable for families earning between 80% and 120% of the AMI.
The Beltline is the redevelopment agent for the Atlanta Beltline Tax Allocation District. It bought the property three years ago from Brock Built Homes for $25.6 million — 30% below its appraised value. It is the agency’s largest property acquisition to date.
The Beltline expects to issue a request for proposals from would-be development partners in mid-2025.
HEARD ON HOUSING
Upcoming Atlanta Regional Housing Forum
Don’t miss the next Atlanta Regional Housing Forum on December 4th at 9:30 a.m. at St. Luke’s Church in downtown Atlanta! This session will explore how women-led companies are navigating challenges in accessing capital for affordable housing development.
The panel includes several HouseATL members.
📅 Date: Monday, Dec. 4
⏰ Time: 9:30 a.m.
📍 Location: St. Luke’s Church, 435 Peachtree St. NE
🎟️ RSVP: Sign up for a ticket
Invest Atlanta approves financing for 218 affordable units
Invest Atlanta’s board of directors has approved bond financing to build and preserve 218 affordable housing units, according to RoughDraft Atlanta. The new and refurbished units are spread across four properties, mostly on the Westside.
A $20 million tax-exempt bond will spur Nation Church Residences’ purchase and rehabilitation of a 152-unit senior housing complex in Adamsville. When complete, the circa-2005 development will market rentals to households earning up to 60% of the AMI for 30 years.
Around $1.5 million in Housing Opportunity Bonds will help Invest Atlanta partner Grounded Solutions Network buy and renovate 40 single-family homes across southwest Atlanta neighborhoods. Rents for 21 units will be priced for households earning 80% or less of the AMI.
The economic development agency also approved $2 million in Housing Opportunity Bond financing for the Atlanta Neighborhood Development Partnership to buy and renovate 40 houses scattered across town. They will rent for 30% to 80% of the AMI for up to 10 years, with the aim of converting many to affordable homeownership.
Lastly, a $260,000 Westside Tax Allocation District grant will help convert an existing quadruplex located at 471 English Avenue into six restored residences. Five of them will offer rents for people earning no more than 50% of the AMI.
Ex-NFL star tapped to head HUD
📷: (AP Photo/Evan Vucci, File)
President-elect Donald Trump has picked former pro football player Scott Turner to head the U.S. Department of Housing and Urban Development (HUD). Turner currently works as chair of the Center for Education Opportunity at America First Policy Institute, a Trump-oriented think tank founded in 2017. Turner also served two terms in the Texas House of Representatives from 2013 to 2017.
During Trump’s first term, Turner served as the executive director of the White House Opportunity and Revitalization Council, which focused on rehabilitating distressed communities.
The appointment marks the second time Trump has tapped a HUD boss with little to no housing industry experience. During his first term, he selected Ben Carson, a retired neurosurgeon who insisted that living in public housing as a child made him qualified to lead the federal government’s top housing job.
Today’s newsletter was written by Sean Kenan and edited by Meredith Hobbs.
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