Atlanta City Councilmember Michael Julian Bond has a plan to turn Midtown’s explosive growth into a new source of funding for affordable housing.
Bond proposed an ordinance in March to create a trust fund that Midtown apartment and condo developers receiving increased density allowances could opt to pay into if they don’t want to include below-market-rate units in new residential towers. (In exchange for increased density, these projects currently must set aside a percentage of affordably priced units.) That money would then be used to build or preserve affordable housing elsewhere in the city.
The slice of Midtown covered by the ordinance, located just east of the I-75/I-85 Connector, participates in the city’s affordable housing density bonus program. Bond’s ordinance would add another option: Let developers pay an in lieu fee instead of renting a percentage of units below market rates, and they can still qualify for the density bonus.
Bond’s goal is to give developers the flexibility to build swanky high-rises, while generating much-needed funds to house Atlanta’s lower-income residents.
“Any major city, especially a city like Atlanta, needs affordable housing in every corner of it,” Bond told Atlanta Civic Circle. “People need to be close to their jobs and to economic opportunities.”
But Bond’s ordinance has been stalled in the city council’s Finance and Executive Committee since March. One key reason: the city hasn’t determined what the in-lieu fees should be for Midtown — a fast-evolving neighborhood where luxury high-rises have become the norm.
Until recently, Atlanta’s in-lieu fee schedule for neighborhoods covered by inclusionary zones or the city’s affordable housing density bonus program hadn’t been updated in years. Consequently, developers were paying outdated, below-market fees per unit that didn’t come close to covering the cost of the affordable units they opted out of providing.
The city’s planning department has revised the fee structure, which previously ranged from $124,830 to $167,364 per unit. Now the opt-out fees range from $129,511 to $244,405 per unit, better reflecting the construction cost. The planning department would have to set a new opt-out fee rate for Midtown.
The nonprofit Midtown Alliance welcomed Bond’s proposal. “Any creative policy tools or strategies that can be administered effectively to raise money for affordable housing are welcomed as Midtown continues to grow,” said spokesperson Brian Carr.
Courtney English, Mayor Andre Dickens’ top policy advisor, said he doesn’t expect many Midtown developers to choose the in-lieu fee option if Bond’s ordinance passes, because the planning department would likely have to price the fees there extremely high to reflect market costs.
But English said the ordinance could further the mayor’s affordable housing goals. “This would create a scenario that allows us to incentivize additional affordability and additional density — or present the option for folks who chose to take the in-lieu fee that would generate so much revenue we could build a bunch of affordable housing somewhere else,” he said.
Bond said that’s the point: If some developers prefer to price all of their residential units at market rates but still receive a density bonus, they should help pay for affordable housing elsewhere in Atlanta.
