Affordable Housing Work Session July 22, 2014 1 Presenters Dawn J. Luke Managing Director, Housing Finance Invest Atlanta Terri M. Lee Deputy Commissioner Department of Planning and Community Development Derrick Jordan Interim Director, Office of Housing Department of Planning and Community Development H. Granvel Tate Principal 1025 Advisors, Inc. 2 Agenda Why we are here: Current realities, community concerns and market conditions p. 4 State of the City of Atlantas Housing Market p. 8 Overview of Affordable Housing p. 15 Where Does Affordable Housing Exist within the City of Atlanta? p. 19 Who Creates Affordable Housing in the City of Atlanta? p. 23 City of Atlantas Approach in Addressing the Affordable Housing Need p. 27 Citywide Housing Strategy p. 32 The Call to Action p. 37 3 Why we are here: Current realities, community concerns, and market conditions 4 What does the data say: Atlantas housing market and its citizens have faced the Great Recession & foreclosure crisis, while powerful demographic forces have played out. The number of Atlanta residents who spend more than 30% of their income on housing has increased significantly since 2000. The lowest cost housing is concentrated in the places with the fewest jobs. Over the last twenty years, housing prices have grown faster than incomes. The Citys residential vacancy rate remains high, despite recent improvements in home construction. The Citys population growth has slowed while its share of the regions population has declined. The majority of Atlantas housing units are more than 30 years old. 5 What does the community say: Residents and business stakeholders expressed common themes about priorities and key issues for the housing market. Priorities Residents: Address issues that impact quality of life alongside housing Support more multi-family high-rise housing Address blight Provide housing for all age groups, especially young families and elderly Business Stakeholders: Interagency Coordination / Strategic alignment with APS Mixed income models (Hope VI) Key Issues Residents: More housing options for young families and desiring a balance of ownership and rental Connectivity among the housing, economic development, and educational strategies Inclusion of other neighborhood infrastructure (sidewalks, bike paths, etc.) Continued community representation in the strategy process and implementation Business Stakeholders Limited resources / Permanence of affordability Concentrations of poverty / Location of jobs 6 Policies and resources needed to meet the existing housing challenges. Funding Needed to Implement the Housing Strategy New issuance of the successful Housing Opportunity Bonds Funding to increase LBA capacity to acquire and rehabilitate vacant, blighted properties Creation of Housing Trust Fund from a variety of sources (payment in lieu of, dedicated millage, per unit levy) Policies for Implementing the Housing Strategy Changes to TAD Policies to require developers to create workforce housing Priority tax lien purchase for the LBA Tax incentives for affordable housing development New zoning incentives and requirements based on proven models in other cities Inclusionary Housing policy that requires all new residential developments to have affordable/workforce housing component 7 State of the City of Atlantas Housing Market 8 Overview of the City of Atlantas Demographics Source: 2007-2011 ACS Total Population: +400,000 # of Cost Burden Residents: ~75,000 Median Household Income: $46,000 Median Home Value: $228,000 Median Rent: $910 Population living in poverty: 23% # of Housing Units: 225,000 Residential Vacancy Rate: 20% Structures 30 years or older: 61% 9 More than 30% of Atlanta households earn less than $25,000 a year. 15% 18% 23% 16% 10% 11% 14% 0% 5% 10% 15% 20% 25% 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 < $10,000 $10,000 - $24,999 $25,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $149,999 > $150,000 P e r c e n t
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Income Brackets Source: U.S. Census (2011 5-YR ACS) Household Income Distribution 10 33% of households earn < $25k The number of cost burdened residents has increased. Source: 2000 Census vs. 2011 5-yr ACS 17,495 37,994 23,507 49,762 0 10,000 20,000 30,000 40,000 50,000 60,000 Cost Burdened Owners Cost Burdened Renters 2000 2011 Atlanta residents who spend more than 30% of their income on housing (2000 vs. 2011) Source: 2000 Census vs. 2011 5-yr ACS 29% 41% 40% 54% 11 Overview of the City of Atlantas Neighborhoods 160,207 total parcels 143,888 Residential parcels 242 neighborhoods 98% of Residential Parcels are Single Family (1-2 units) 17,638 Vacant Structures and Lots (11% of total) 3,850 blighted structures (poor/deteriorated) (2.4% of total) 12 Percentage of Residential and Vacant Parcels in the City of Atlanta By Council District TOP 3 COUNCIL DISTRICTS % OF RESIDENTIAL PARCELS: 1. CD-3 (18%) 2. CD-6 (16%) 3. CD-5 (15%) % OF VACANT PARCELS*: 1. CD-3 (25%) 2. CD-12 (21%) 3. CD-4 (20%) Source: SCI Report: APD Solutions, 2013 *Includes Vacant Lots and Structures CD-1 CD-2 CD-3 CD-4 CD-5 CD-6 CD-7 CD-8 CD-9 CD-10 CD-11 CD-12 % of Residential Parcels 12 13 18 12 15 16 10 9 11 10 9 12 % of Vacant Parcels 16 4 25 20 8 3 1 3 19 13 11 21 0 5 10 15 20 25 30 13 City of Atlanta Neighborhood Investment Typology 3% 12% 17% 16% 18% 19% 13% 2% Exceptional Strong Stable Trending Transitional Vulnerable Declining Fragile 32% 34% Source: SCI Report: APD Solutions, 2013 14 Overview of Affordable Housing 15 There is a growing divide between market and affordable rates especially for families. Area Median Income % STUDIO 1 BEDROOMS 2 BEDROOMS 3 BEDROOMS 50% $ 563 $ 604 $ 725 $ 837 60% $ 676 $ 725 $ 870 $ 1,005 80% $ 901 $ 965 $ 1,158 $ 1,339 MARKET* $ 955 $ 1,029 $ 1,470 $ 1,985 New Old 4 th Ward Units** $1,130 $ 1,240 $ 1,890 $ 2,455 16 *Market units are based on an average rate of $1.47psf. **Prices in Old 4 th Ward reflect lowest priced market unit in Bohemian House and 755 North Avenue. Affordable Workforce Housing Policy, which is based on family size, has to include working families who are at the high end of the % of Area Median Income but cannot afford to buy houses in many parts of the city. $44,000 $75,000 $65,000 $132,000 $225,000 $195,000 100% 140% 140% $228,000 Median Home Value in Atlanta Total Household Income Maximum Home Price They Can Afford % of Area Median Income 17 Affordable Housing Income Limits for the Atlanta MSA. 2014 INCOME LIMIT 1 PERSON 2 PERSONS 3 PERSONS 4 PERSONS 5 PERSONS 30% $ 13,550 $ 15,450 $ 17,400 $ 19,300 $ 20,850 50% $ 22,550 $ 25,800 $ 29,000 $ 32,200 $ 34,800 60% $ 27,060 $ 30,960 $ 34,800 $ 38,640 $ 41,760 80% $ 36,050 $ 41,200 $ 46,350 $ 51,500 $ 55,650 100% $ 45,100 $ 51,600 $ 58,000 $ 64,400 $ 69,600 115% $ 53,400 $ 61,000 $ 68,650 $ 76,250 $ 80,000 120% $ 55,700 $ 63,650 $ 71,600 $ 79,550 $ 83,500 140% $ 63,100 $ 72,100 $ 81,100 $ 90,100 $ 97,300 H O M E O W N E R S H I P R E N T A L 18 Where Does Affordable Housing Exist within the City of Atlanta? 19 Subsidized housing is clustered near the City center and the west. HUD-Subsidized, HUD- Insured, HUD-Operated, and LIHTC properties Source; Policy Map, U.S. Department of Housing and Urban Developments LIHTC Database, which was last revised as of August 17, 2012. 20 Households with vouchers are concentrated in southern neighborhoods. Percent of Households receiving Section 8 Vouchers as of 2009 by Census Tract Source; Policy Map, U.S. Department of Housing and Urban Developments LIHTC Database, which was last revised as of August 17, 2012. 21 Areas of Atlanta with the most jobs have the least affordable housing. Source: Policy Map, 2011 5-yr ACS Jobs per tract Map of Atlantas Employment, 2010 Source: Atlanta Regional Commission Share of Homes Affordable to Families Earning below 80% AMI 22 Who Creates Affordable Housing in the City of Atlanta? 23 A number of different entities play an important role in creating Atlantas housing landscape. City of Atlantas Housing Agencies City of Atlanta: Office of Housing Distributes funding for housing development & preservation Invest Atlanta Provides financing for affordable housing development & homeownership Atlanta Housing Authority Acquires, manages and develops affordable housing Public Sector Georgia Department of Community Affairs Distributes Low-Income Housing Tax Credits and offers down payment assistance United States Department of Housing & Urban Development Administers federal aid to local housing agencies that manage and finance housing for low income families MARTA and Atlanta Beltline, Inc. Make land available for development City of Atlanta / Fulton County Land Bank Authority Banks land for future development Private/Non-Profit Enterprise Community Partners Provides capacity building for non-profits, funding for workforce housing and consulting services Foundations/Banks Provides funding for workforce development and/or place-based neighborhood revitalization Neighborworks Provides capacity building for non-profits, funding for workforce housing and consulting services CDCs/CHDO Acquires, owns, operates, and develop neighborhood based workforce housing projects Developers Acquires, owns, manages and develops workforce housing 24 These funding streams run through many different entities. Housing Opportunity Bonds Tax Exempt Bonds Down Payment Assistance Vine City Trust Fund BeltLine Affordable Housing Trust Fund HOME Funds Community Development Block Grants (CDBG) Neighborhood Stabilization Program (NSP) CITY OF ATLANTA OFFICE OF HOUSING INVEST ATLANTA Hope VI Section 8 / PBRA Choice Neighborhoods Planning Grant Down Payment Assistance ATLANTA HOUSING AUTHORITY Low-Income Housing Tax Credits State HOME Funds Down Payment Assistance 1 st Mortgage Program HOME Safe Program GEORGIA DEPARTMENT OF COMMUNITY AFFAIRS 25 26 While many of Atlantas primary housing resources have been effective, they are now largely depleted. Invest Atlanta Tools Tax Exempt Bonds Housing Opportunity Bonds HOME Investment Partnership BeltLine Affordable Housing Trust Fund Homelessness Opportunity Fund Lease Purchase Bonds Economic Realities Conventional taxable rates have been lower than Tax Exempt Bond Rates 93% Expended; $40mm remains to be issued. Requires Council approval Federal funding decreased by 40% since 2010 100% Allocated 99.9% Expended Some success in providing workforce housing choice in higher cost areas 26 City of Atlantas Approach in Addressing the Need for Affordable Housing 27 In recent years, Atlanta has enacted several initiatives to make housing more affordable for residents. Established the Atlanta BeltLine Affordable Housing Trust Fund Established the Homeless Opportunity Fund Used Tax Allocation Districts to facilitate the development of mixed income communities Used Lease Purchase Bonds to create housing choices in high cost areas Redeveloped public housing as mixed income communities Established a Housing Opportunity Bond Fund Successful Development Funded to Date Novare Skyhouse Lofts at Reynoldstown Crossing Adamsville Green Senior Apts. West Highlands Master- Planned Community 28 Four entities played roles in the creation of the Housing Opportunity Bond Fund (HOB). Guaranteed payment of debt service from City revenue Used Housing Authorities Law to create non-profit AHOI Issued the Bonds Implementation Agent for the programs outlined in the HOB documents Atlanta Housing Opportunity Inc. (AHOI) Designated Housing Corporation and Borrower of Funds Housing Opportunity Bond (HOB) 29 HOB has produced more than 2,000 housing units and been leveraged by private funds >7:1. Components Revised Budget Funds Expended Funds Leveraged Units Produced Down Payment Assistance for workforce homeownership $13,446,446 $13,446,446 $104,656,008 777 Loans for acquisition and rehabilitation/new construction of multifamily rental units $4,200,000 $4,200,000 $89,600,807 802 AHA Hope VI Infrastructure Funds for Collegetown at Harris Homes Redevelopment $7,500,000 $7,500,000 $44,010,000 489 Land Assemblage Financing Fund for predevelopment/acquisition cost $1,800,000 $1,800,000 $21,500,000 -- Direct Land Acquisition to fund City of Atlantas property acquisitions $1,000,000 $3,000 -- -- Community Housing Dev. Organization Loans to create rental and for-sale units $810,115 $246,438 $283,403 4 ProgramAdministration $5,589,200 $5,589,200 NA NA Bond Costs of Issuance $708,015 $708,015 NA NA Totals $35,053,776 $33,493,099 $260,050,218 2,068 DRAFT - July 18, 2014 30 777 homebuyers used HOB down payment assistance to make Atlanta their new home. Component Value Closed Loans New Construction 231 Closed Loans Existing Homes 546 Opportunity Funds Expended $13,446,446 Private Investment Leveraged $104,656,008 Average Family Income $46,605 Average Family Size 1.5 Average Sales Price $147,998 31 Citywide Housing Strategy 32 Community Engagement: Community meetings were held in various quadrants of the City to gather residents feedback. SCI Group 1: South Atlanta 11/12/13 Adamsville Recreation Center 6 8 pm *Housing Strategy Group 1: Council Districts 3, 9, 10 11/13/13 Adamsville Recreation Center 6 8 pm *Housing Strategy Group 2: Council Districts 1, 2, 5 11/14/13 The Trolley Barn 6 8 pm *Housing Strategy Group 3: Council Districts 6, 7, 8 11/19/13 Peachtree Christian Church 6 8 pm SCI Group 2: North Atlanta 11/20/13 Atlanta Speech School 6 8 pm *Housing Strategy Group 4: Council Districts 4, 11, 12 11/21/13 Atlanta Technical College 6 8 pm * Coordination: Invest Atlanta and Enterprise Community Partners * Polling and Meeting Assistance: Atlanta Regional Commission 33 Our consultants talked to numerous community members and stakeholders to assist in informing the Housing Strategy. 34 The following existing tools, new tools and tactics can best help Atlanta achieve its housing goals. Existing Policy Tools to be Enhanced Description The Housing Opportunity Bond Fund Funds the development and preservation of workforce housing Tax Allocation Districts Contributes local tax revenues to local projects The FC/CoA Land Bank Acquires and holds blighted property for redevelopment The Zoning Code Facilitates more dense development around key urban amenities New Policy Tools to be Created Description Inclusionary Zoning Would link workforce housing development with market rate development Expanded Tax Abatements Would provide a long-term operating subsidy to fill the gap left by affordable units New Tactics for Housing/Vacant Properties New Tactics for Neighborhoods & Community Development Targeted Workforce Housing Initiative Neighborhood Agenda at the State Legislature Vacant Property Registration System & Database Concentration of Housing Dollars and Code Enforcement Vacant Property Receivership/ Conservatorship Synergize Community and Economic Development For-profit and Non-profit Developer Collaboration Enhance Neighborhood Gateways Promote Purchase Rehab Lending Improve Pedestrian Mobility Implement the Use of a Smart Rehab Code Collaboration with Public and Private Utilities Enlist and Train Realtors, Builders, and Developers Community Engagement 35 Housing Strategy Metrics: Specific milestones that mark success in achieving the Goals. Grow Atlantas population by 10 percent (42,000) by 2020. Reduce the number of Atlanta low- and moderate-income households paying more than 30 percent of their income for housing by 10 percent (7,500) by 2020. Reduce the number of vacant, blighted homes by 10 percent (800) by 2020. Produce or rehabilitate 10,000 residential units for a range of incomes, doubling the current rate of production, in redeveloping communities job-rich areas by 2020. Generate $100 million in new funding to support part of the costs of these units by 2020, with the first $40 million issued by the end of 2014. Ensure that at least 10,000 new and rehabilitated units meet nationally recognized sustainability and energy efficient criteria by 2020. * * Range of incomes is defined as between 80% and 120% of area median income. 36 The Call to Action 37 Absent of adequate financial resources, IA and the City have taken several steps to begin implementation of the Housing Strategy. Changes have been made to TAD policies to include a workforce housing requirement COA has applied and received a technical assistance scholarship from Center for Community Progress to evaluate current policy and procedures to address blighted properties IA working with Office of Planning to enhance Density Bonus ordinance IA working with LBA to acquire tax delinquent multifamily property COA is working with a local developer and non-profit to complete a place based strategy to address vacant land and blighted properties in the Mechanicsville neighborhood and Pittsburgh COA & IA have participated in two (2) workshops conducted by Enterprise focused on Transit Oriented Development (TOD) and Inclusionary Housing IA is working on strategy to strengthen the use of Lease Purchase bonds to incentivize affordable workforce housing IA is developing a rezoning proposal to be submitted to the Office of Planning and considered as part of the evaluation and rewrite of the current zoning ordinance 38 Additional policies and potential resources needed to implement the Housing Strategy. Funding Needed to Implement the Housing Strategy New issuance of the successful Housing Opportunity Bonds Funding to increase LBA capacity to acquire and rehabilitate vacant, blighted properties Creation of Housing Trust Fund from a variety of sources (payment in lieu of, dedicated millage, per unit levy) Policies for Implementing the Housing Strategy Changes to TAD Policies to require developers to create workforce housing Priority tax lien purchase for the LBA Tax incentives for affordable housing development New zoning incentives and requirements based on proven models in other cities Inclusionary Housing policy that requires all new residential developments to have affordable/workforce housing component 39 40 Thank you! For more information, please contact us at: Dawn J. Luke Terri M. Lee (404) 614-8289 (404) 330-6643 dluke@investatlanta.com telee@atlantaga.gov Granvel Tate Derrick Jordan (404) 490-1025 (404) 330-6439 gtate@1025advisors.com dajordan@atlantaga.gov