On October 11, 2023, BPC’s J. Ronald Terwilliger Center for Housing Policy, in partnership with Habitat for Humanity International, hosted a roundtable discussion in Atlanta. The purpose of the roundtable was to better understand and identify local challenges and opportunities for increasing the supply of affordable homes in Greater Atlanta, including the city of Atlanta and its surrounding counties. BPC has held similar discussions with local stakeholders in Boston, MA and Austin, TX.
Representatives from local real estate developers, government, advocacy groups, and community-based organizations in Atlanta participated. To encourage an open dialogue, the roundtable was governed by the Chatham House Rule, meaning the discussion cannot be attributed to specific individuals or organizations.
Below are key takeaways and considerations for policymakers informed by the housing affordability challenges in metro Atlanta.
Atlanta is one of America’s largest and fastest-growing cities. Between 2010 and 2020, the Atlanta metro area gained more than 800,000 new residents, an increase of more than 15%, bringing the total population to more than six million residents. Growth continues: from April 2022 and April 2023, the 11 core counties in the metro region gained nearly 67,000 residents.
Source: Atlanta Regional Commission
In the past year, the fastest rate of growth occurred in the City of Atlanta (2.8%), but each county also registered a population increase. The steady increase in population is being fueled by continued strong employment growth. Metro Atlanta’s job employment base increased 5.4% since the pandemic began in early 2020, the fifth highest in the nation.
Home builders in greater Atlanta, like those in many cities with strong job growth, have struggled to keep pace with a rapidly expanding population. During the 2007-2008 financial crisis, permitting of all private-owned home types plummeted from between 5,000 and 6,000 approvals per month to a few hundred. While the permitting rate has slowly inched back up since then, it is still hovering at just over half the pre-crisis level. In 2021, metro Atlanta was about 105,000 homes short of meeting regional demand.
Increased housing costs, in what was previously considered an affordable metro area, have put pressure on low- and middle-income families. Atlanta experienced some of the fastest-rising rents in the country in recent years. In October 2018, the average monthly rent in metro Atlanta was $1,497 for a one-bedroom apartment, but by October 2023, rent for the same type of apartment had risen to $2,068. The median-earning household in Atlanta would now have to spend more than 50% of its income to afford the median rent.
Meanwhile, homeownership is increasingly out of reach. Between September 2018 and September 2023, the median home list price in the Atlanta metro rose 65%. The Federal Reserve Bank of Atlanta measures the ability of a median-income household to absorb the annual cost of owning a median-priced home in its Home Ownership Affordability Monitor (HOAM) Index. In March 2022, the Atlanta metro fell below the HOAM Index’s affordability threshold for the first time in more than a decade, where it remains as of the index’s last update.
The lack of available homes at affordable prices threatens to displace many residents from their neighborhoods, a sign of increasing economic division in a city that, as of the most recent census data, suffers from some of the worst income inequality of any large metro in the U.S. Recognizing the problem, the Atlanta mayor’s office has implemented a variety of programs to tackle affordable housing issues.
1) Investment within Atlanta and surrounding suburbs has stimulated business development and job growth but has negatively impacted housing affordability, in particular for low- and moderate-income households.
Participants noted the Georgia Governor’s Office has focused on economic development and successfully recruited new companies to the state. In fact, Georgia is frequently ranked among the most attractive states nationwide to do business, and metro Atlanta is home to 17 of the state’s 19 Fortune 500 companies. These economic development efforts, while creating jobs, new businesses, and more economic activity, have nonetheless contributed to greater housing demand, straining the existing housing supply and leading to higher housing costs.
Roundtable participants shared that, locally in Atlanta, recent investment in historically underserved communities has led to housing price inflation and displacement. The BeltLine, an expansive urban redevelopment project surrounding Atlanta’s urban core, transformed abandoned railroad infrastructure into miles of parks, trails, and public transit.
Source: Invest Atlanta
The BeltLine circles the core of Atlanta’s in-town neighborhoods and enables residents and visitors to explore amenities across the city, including restaurants, shops, art installations and green space. Because of the BeltLine’s massive investment, property values nearby increased, property tax bills inflated, and housing affordability decreased for current and prospective homeowners and renters. According to some experts, it has concentrated demand for housing in those neighborhoods and escalated gentrification. Because single-family rentals make up a significant source of affordable rentals and the overall housing stock in the area, many roundtable participants expressed a need to better support those renting single-family homes.
Participants highlighted ongoing efforts to maintain affordable housing options for low- and moderate-income renters and homeowners but stressed that additional tools are needed. The Atlanta Land Trust, one of an estimated 315 community land trusts (CLTs) across the country, was created in 2009 to maintain affordability in neighborhoods at risk of gentrification and displacement due to development. Another tool Atlanta implemented to ensure that local investment does not displace current residents is inclusionary zoning. Atlanta’s inclusionary zoning ordinances stipulate that multifamily properties constructed within specified districts, including near the BeltLine, must include units affordable to low- and moderate-income residents.
- Key considerations for federal housing policymakers: Can the federal government further clarify how its programs, like Federal Housing Administration mortgage insurance, can support community land trusts and facilitate related lending? Are there ways to help communities acquire land for the purposes of building affordable housing? Can the federal government support efforts to develop new tools to promote affordable, sustainable homeownership? Because infrastructure investment leads to economic opportunity but also impacts housing affordability, could federal funds for infrastructure include additional incentives for maintaining affordability or monitoring of the investment’s impact on housing prices?
2) Long-term homeowners in Atlanta benefit from targeted assistance to help them stay in their homes—but that assistance is oversubscribed.
Participants discussed several challenges facing homeowners in metro Atlanta. In particular, the appreciation of homes has inflated property tax bills for families, escalating the cost of homeownership. To alleviate these tax burdens for some long-term, lower-income homeowners, the BeltLine’s Legacy Resident Retention Program covers the costs of increases in property taxes through the 2030 tax year. Roundtable participants stressed that while programs like these can be funded in the short term by philanthropy, state policy initiatives such as a cap on property tax increases are needed to provide a more sustainable solution.
Low-income homeowners whose properties need rehabilitation turn to Atlanta’s economic development authority, Invest Atlanta, for assistance. Its two owner-occupied rehab programs are popular and oversubscribed. As a result, many roundtable participants noted that homeowners would benefit from additional, more user-friendly federal resources for these activities. For example, they mentioned how federal requirements for HUD’s HOME Program can turn otherwise minor rehabs into expensive and time-consuming endeavors, while HUD’s Community Development Block Grant (CDBG) program could be a better funding source for homeowner preservation activities, if adequate resources were available.
- Key considerations for federal housing policymakers: How can federal programs best support struggling homeowners afford the ongoing costs of homeownership? Is the current mix of programs available to help low-income homeowners repair and rehabilitate their homes sufficiently funded, coordinated, and easy to access? Should Congress direct HUD to update its CDBG allocation formulas—the core variables of which have not been changed since 1978—to better match the geographic distribution of need today?
3) Zoning reform will be an important tool to diversify and expand Atlanta’s housing stock if public opposition can be overcome.
Roundtable participants consistently cited zoning as a key barrier to expanding the supply of housing in the city of Atlanta as well as in its surrounding cities and counties. Despite its population growth, 74% of metro Atlanta’s housing stock is single-family homes. Developers aiming to construct multifamily properties commonly must request variances from local government, which can be difficult to get approved.
Neighborhood Planning Units (NPUs) throughout Atlanta’s neighborhoods offer city officials an on-the-ground opinion on planning-related issues, including zoning. While NPUs frequently vocalize opposition to new housing developments, they have historically been a respected stakeholder in the decision-making process in Atlanta. Roundtable participants shared how balancing the need for more housing supply with the diverse opinions of its residents continues to be a challenge for local policymakers, affordable housing developers, and other stakeholders.
In 2020, the City of Atlanta’s Department of Planning developed Atlanta City Design: Housing to illustrate how housing policy has historically impacted the city, set a broad vision for land use and zoning, and guide future land use policies and zoning ordinances. Although not all components of the framework have been embraced, the city is taking a big step by rewriting its zoning code for the first time in 40 years. Through zoning reform, the city has a chance to update its zoning standards so they can more effectively respond to the current housing and economic development needs of its residents.
- Key considerations for federal housing policymakers: How can federal policymakers support zoning reform efforts? Are there ways that Congress can incentivize state and local governments to support greater housing density in areas of opportunity?
4) The Low-Income Housing Tax Credit (LIHTC) is a critical funding source for affordable housing development in metro Atlanta.
Participants stressed the importance of the LIHTC program as a crucial source of funding for affordable housing, and participants cited a need for additional LIHTC allocations for the state. They emphasized the complexity of combining LIHTC with other funding sources, each with its own timelines and requirements. Once a property funded by the LIHTC program is in operation, participants highlighted additional challenges. The methodology used for property tax assessments of LIHTC properties outside the city of Atlanta has resulted in higher tax bills for affordable housing than market-rate properties in the area. Elevated insurance costs at LIHTC properties have raised the total cost of operation as well.
Preserving existing LIHTC properties is an important strategy to maintain the current inventory of affordable housing in metro Atlanta. Work is being done at the city level to identify subsidized affordable housing properties that are potentially at risk of losing their affordability due to subsidy expirations. Not all properties are eligible to secure new tax credits to support preservation, and today’s high interest rates can make the preservation process even more challenging. Participants identified the need for federal policymakers to elevate preservation as a priority and to consider areas like Atlanta that, because of rising housing costs, may not benefit from the proposed new federal tax credit to support the building and rehabilitation of owner-occupied homes.
- Key considerations for federal housing policymakers: Should Congress consider legislation to extend the affordability requirements for LIHTC properties given how critical these units are amid a declining supply of affordable rental homes? How can federal policymakers support housing construction and renovation in historically disinvested communities that now have high housing costs? Are there opportunities for federal policymakers to encourage more states to incentivize access to transportation in their LIHTC scoring criteria?
5) Metro Atlanta benefits from a collaborative group of stakeholders pushing for affordable housing in the region.
Participants felt optimistic about the future of affordable housing in metro Atlanta, due to strong and diverse partnerships that have formed in the region. HouseATL, a membership coalition of 185 organizations spanning from local government to housing developers, advocacy groups, and philanthropy, have collaboratively developed and are implementing a comprehensive set of strategic recommendations to advance housing affordability.
Atlanta city government has also dedicated significant time and funding to this issue, in partnership with the area’s public housing authority, Atlanta Housing. The state of Georgia has further made strides to address the shortage of affordable housing. In 2022, Mayor Andre Dickens established an affordable housing strike force, which has reviewed all publicly held land and identified opportunities to develop affordable housing on several publicly owned parcels. The city purchased a 44-story office building from the state of Georgia and is in the early stages of converting it into a mixed-use, mixed-income development. Atlanta Housing was the recipient of two Choice Neighborhood grants to revitalize former public housing sites and several residential neighborhoods. Participants believed the housing authority’s collaboration with the city, a trusted developer, the Atlanta University Consortium, and former public housing residents contributed to the proposals’ success.
- Key considerations for federal housing policymakers: Is there a role for federal policymakers to facilitate knowledge sharing of successful local partnerships and initiatives? What can federal policymakers do to help city, county, and state governments convert underutilized publicly owned space to affordable housing?
Atlanta benefits from a growing population and local and state commitment to economic development, infrastructure, and jobs. Nevertheless, the region’s assets created housing affordability challenges for Atlanta’s low- and middle-income families. The metro area’s single-family housing stock and zoning restrictions limit denser buildings from being constructed without variances, and the complexity of funding sources available to affordable housing developers creates lengthy development timelines, all limiting the supply of affordable housing options. Atlanta has the capacity to maintain existing single-family neighborhoods and support homeowners to remain in their community, while diversifying the housing stock so families of all incomes can afford to live and thrive in the region. A strong coalition of affordable housing stakeholders has made progress, and those partnerships could serve as a model for other cities in the United States.
The J. Ronald Terwilliger Center for Housing Policy would like to thank Habitat for Humanity International as well as all of the roundtable experts – including representatives from Atlanta Apartment Association, Atlanta BeltLine, Atlanta Department of City Planning, Atlanta Housing, Atlanta Neighborhood Development Partnership, Atlanta Office of the Mayor, Collaborative Housing Solutions, Enterprise Community Partners, Georgia Affordable Housing Coalition, Integral Group, and the Urban League of Greater Atlanta.
The Center thanks the Melville Charitable Trust and Conrad N. Hilton Foundation for their generous support of our work. The findings, interpretations, and conclusions expressed in this report—as well as any errors—are ours alone.
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