Atlanta, Georgia: Affordable Homeownership on the BeltLine

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Atlanta, Georgia: Affordable Homeownership on the BeltLine

The city of Atlanta has spent the past 10 years undertaking a once-in-a-generation urban redevelopment project. Known as the BeltLine, the project is transforming an abandoned rail corridor into an expansive system of parks, trails, and public transit. When completed, the 22-mile greenway and transit corridor will encircle the city’s downtown, connecting 45 neighborhoods along its route. Encompassing transit, recreation, and community and economic development in equal measure, the project’s overarching goal is to revitalize many of the neighborhoods that it connects through its network of trails and transit, which will enhance both neighborhood accessibility and residents’ mobility.

Expanding affordable housing opportunities throughout the BeltLine neighborhoods is a priority of the revitalization plan and is critical to advancing a larger equitable development framework. To that end, Atlanta BeltLine Inc. (ABI), the entity responsible for implementing the project, is taking the lead in creating and preserving affordable housing across BeltLine neighborhoods. As part of this work, the organization completed the Lofts at Reynoldstown Crossing, a 29-unit condominium development that has broadened the homeownership opportunities available to the city’s workforce. The project was a finalist for the Urban Land Institute’s Jack Kemp Workforce Housing Models of Excellence Award in 2013.

Expanding Affordable Homeownership
ABI acquired a partially completed luxury condominium building after a series of setbacks left the original developer unable to complete the project. Although the property sat vacant for nearly four years as the local housing market rebounded from the recession, its location next to the planned expansion of the BeltLine made it well suited for infill housing.

ABI marketed the building as workforce condominiums to fill a neighborhood need for high-quality and affordable homes. ABI retained the development’s original upscale features, including granite countertops, stainless steel appliances, floor-to-ceiling windows, and a fitness center and pool, but the units were offered at price points affordable to households earning up to the area median income ($68,000). After an extensive marketing and outreach campaign generated considerable interest in the Lofts, the city conducted its first drawing for affordable housing. Potential buyers, who were required to have visited the property and to have secured approval for a mortgage (among other commitments) and signed purchase agreements for all 28 units on the day of the drawing. Three of these units went to police officers and a teacher through a partnership with the Atlanta Land Trust Collaborative that will ensure the units remain affordable in perpetuity.

ABI acquired the site in fall 2011 and completed the project less than nine months later. At a cost of less than $700,000, the elevator system was completed, improvements were made to the building envelope to address moisture ingress issues, and the building’s steel and concrete structure was reinforced. Nearly all of the units had sold by late spring 2012.

Financing to Support Homeownership
The project was made possible with funding from the Atlanta BeltLine Tax Allocation District, a tax increment financing district established in 2005 to implement the revitalization project, and the Atlanta BeltLine Affordable Housing Trust Fund (BAHTF). The Atlanta City Council established the trust in 2008 to create a flexible funding source for constructing and preserving affordable housing in the BeltLine neighborhoods. Funds from the allocation district to acquire the site made it possible to fill the gap between development costs and an affordable price for the units. Each unit cost $170,000 (including acquisition and construction), and the average price of the homes was $150,000. Tax increment funding accounted for a permanent subsidy of $22,000 for each unit, so the homes could be sold at prices affordable to moderate-income households. BAHTF provided each homebuyer with a zero-interest, deferred-payment second mortgage of approximately $64,000. As a result of the second mortgage, the monthly housing payment is approximately $1,000. If an owner sells the unit within 15 years of purchase, the second mortgage is paid to BAHTF. ABI holds a right of first refusal on the sale of all the units in the development.

Table 1: The Lofts at Reynoldstown Crossing Cost Overview

Advancing Equitable Development
As the transformative BeltLine redevelopment project continues, implementing the project’s vision will include investments to improve mobility, connectivity, and regional equity. The city has prioritized affordable housing in the BeltLine neighborhoods by creating BAHTF and has set other ambitious goals for the entire redevelopment area. Of the 28,000 housing units envisioned in the BeltLine’s strategic implementation plan, 20 percent, or 5,600 units, will be affordable to low- and moderate-income households. To help fund the affordable units, city council dedicated 15 percent of the revenues of the BeltLine tax increment financing district to BAHTF.

Other ambitious goals of the BeltLine redevelopment involve physically linking neighborhoods across the city and eliminating long-standing economic and cultural segregation. The BeltLine Equitable Development Plan provides a framework for supporting equity throughout the project. The plan recognizes that the place-based nature of the BeltLine promises to support mixed-income communities and address regional disparities in employment and housing. Emblematic of the city’s vision for the BeltLine, the Lofts at Reynoldstown Crossing repurposed a languishing asset to expand homeownership opportunities for moderate-income households. The project’s location near major employment centers, shopping, and the BeltLine’s transit and trails contributed to its success as workforce housing.