Atlanta Studies How to Better Collaborate on Affordable Housing

As in many big cities around the country, affordable housing is desperately needed in Atlanta. A new report by an Urban Land Institute’s Advisory Services panel that was commissioned by the city’s housing authority, Atlanta Housing (AH), analyzed opportunities for the city to collaborate more effectively with developers and partners to meet that need, noting the many land and financial resources already available to developers if properly deployed.

The agency commissioned the report to achieve expert feedback and recommendations to help it achieve its aggressive goals, which include creating or preserving 10,000 affordable housing units within five years. The agency has the full backing of Mayor Andre Dickens, who set a goal of building 20,000 affordable units within eight years when he took office in 2022.

The panel was made up of national experts in real estate, finance and land use. Its report noted that AH has some unique resources, including more than 350 acres of vacant and underutilized land across the city. The total cost of its development pipeline was estimated to be over $2.1 billion, not including infrastructure. It also has a housing voucher program. These assets, the report said, “offer excellent opportunities for leverage—the greater the leverage, the more affordability and the greater the likelihood that AH will achieve its goals.”

The agency’s FY 2025 budget of $534 million was recently approved. It will fund the construction of 1,350 affordable housing units and the preservation of 1,114 others.

“AH’s land holdings can be catalysts for development, offering attractive sites with reduced upfront costs for projects prioritizing affordability,” it noted.

To attract and retain quality developers, the panel stressed the need to publish clear developer and partner guidelines that include regulatory requirements and timing. Providing developers with a clear picture of funding sources and potential financial support would also help., “AH can reward projects with greater financial support based on greater affordability levels, which would incentivize developers to prioritize the most vulnerable populations,” the report noted, citing the example of San Antonio.

The report also recommended streamlining the process by adopting a true master developer model and designating one sole master developer with responsibility for the development of the full site and select codevelopers as needed, and clear performance benchmarks that favor shovel-ready projects.

Among its other recommendations, the report also advised reorganizing AH’s real estate functions along the lines of private-sector development companies, including decision-making hierarchies, clear investment criteria, and internal reviews of projects before they reach senior management.

“The panel recommends establishing a well-defined pipeline, meticulously curated on the basis of factors such as development timeline, funding obstacles, and partner… responsiveness. This strategic approach ensures that resources are directed toward projects with the highest potential for success while balancing other AH goals,” the report said. Plus, it encouraged the agency to improve collaboration by becoming an active co-developer, not just a passive landowner, to help address challenges and interactions with external agencies more effectively, as well as speed up infrastructure planning.

“AH boasts valuable long-term staff with expertise in the traditional HUD-inspired development model. However, as AH ventures into new financing models and funding sources, there will be a knowledge gap,” the report said. It suggested targeted upskilling initiatives and hiring specialized consultants to bridge this gap.

“AH’s ambitious goal to create and preserve 10,000 affordable housing units necessitates a strategic, multipronged approach that transcends traditional funding models and emphasizes both community impact and financial sustainability. To navigate this exciting path, AH’s next steps require a phased approach,” the report stated. In addition to prioritizing Tier 1 projects, it also advised the agency to secure a diversified portfolio of funding sources, explore the potential of private equity, federal grants, land swaps, and other creative funding mechanisms.

Affordable housing is not just a matter of civic duty. Lack of available housing has been identified as the second most important issue impacting Georgia’s ability to attract, develop and train a competitive workforce by the Georgia Chamber of Commerce Foundation. The Foundation noted that at the same time as the state experienced “unprecedented” economic growth in the past five years, housing inventory decreased by over 60%.