City Hall crafting plan requiring new housing to include affordable units

Developers would be required to make units affordable under policy currently in the works

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City Hall officials are taking an important step toward requiring developers who build new apartments, condominiums, townhouses, and single-family homes throughout Atlanta to make those units available to people making a wide range of income levels — not just the wealthy. It’s a policy decision that could have huge ramifications on how for-profit developers construct new residential properties across the city.

Mayor Kasim Reed, Atlanta City Councilman Andre Dickens, and Invest Atlanta officials are currently drafting the city’s first-ever mandatory inclusionary zoning plan. Though the wording is wonky, the concept is simple: developers constructing new rental and for-sale housing would be required to offer a fixed percentage of those units to people making “low-to-moderate income.”

Currently, the city has a voluntary inclusionary zoning policy on the books that gives developers tax incentives for projects with “affordable” units. The policy, which hasn’t always effectively targeted people making lower incomes, has had a limited impact on boosting the city’s affordable housing stock.

Reed spokeswoman Jewanna Gaither tells CL the new policy will be designed to reduce the number of residents spending more than 30 percent of their income on housing and create a “broad mix” of housing choices. She says the policy would also be useful in serving a diverse population that includes working families, seniors, teachers, police officers, firefighters, and health-care workers. The city has looked to Austin, Boston, Seattle, and Washington, D.C., to draft the new housing policy.

“We have also hired national experts to develop a predictable financial model specific to the Atlanta housing market that will assist in crafting a policy and had extensive community and stakeholder engagement meetings,” Gaither says.

But the proposal could also have loopholes that allow developers to opt out of the policy by chipping in to a housing trust fund to pay for affordable units elsewhere in the city.

Dickens, who expects Council to pass the legislation before the year’s end, says the mandatory inclusionary zoning policy is still being finalized. Officials have not yet decided the exact percentage of housing units developers would need to set aside as affordable, how much developers would need to pay toward the housing trust fund to opt out of the policy, or what level of income would qualify residents for those units.

“We’ll have legislation to help ensure quality housing options across the whole city for all the diverse price points in the city,” Dickens says. “It’s going to be meaningful. We don’t want to do it unless we’ll have an impact.”

What does a meaningful policy entail? That’s depends on whom you ask. Georgia State Trade Association of Nonprofit Developers President and CEO Kate Little tells CL one of the most crucial parts of an affordable housing policy starts with defining who qualifies for those units. She’ll be watching the income restrictions in the policy and whether officials focus on “workforce” housing, between 80 and 120 percent of Area Median Income, or if they’ll craft a policy to help lower-income residents.

Atlanta affordable housing professional Andy Schneggenburger tells CL that a well-crafted mandatory inclusionary housing policy — an ideal one would require at least 20 percent of the new units to be affordable — is a “necessity” for the city. He says that percentage should be higher near transit stations to help low-income residents have greater access to their jobs.

However, Schneggenburger says other policies are needed to further address the city’s housing needs. The most important of those programs, he says, is to create a citywide community land trust. That kind of nonprofit organization would act as the steward of those units and ensure they remain affordable in the long-term. Many new affordable housing units built by developers, including those in Atlanta, ultimately revert to market rate. So the city is always playing catch-up.

The level of pushback from developers will likely play a key role in the strength of Atlanta’s mandatory inclusionary zoning policy. We’ve heard that some developers, who are discussing the plan with officials, could support the measure if its restrictions create a level playing field for residential construction across the entire city. With the right opposition, residential housing builders could pressure officials into passing a toothless plan — or killing the legislation altogether.