$100M Later, Atlanta Has 'Completely Allocated' A Fund For Affordable Housing

The city of Atlanta’s economic development arm has used bond financing since 2023 to help fund the creation of thousands of affordable housing units. 

But this year, the $100M Housing Opportunity Bond Fund has been “completely allocated,” said Granvel Tate, vice president of real estate operations at Invest Atlanta. That eliminates, at least for now, a key tool the agency has used to help Mayor Andre Dickens reach his goal of creating and preserving 20,000 affordable housing units in the city by 2030, he said. 

Tate was speaking Tuesday at Bisnow’s Atlanta Affordable & Workforce Housing Conference.

Atlanta created the Housing Opportunity Bond Fund to create gap financing for developers cobbling together a capital stack for affordable housing projects.

The fund was among several programs that Invest Atlanta has used to incentivize developers to add affordable housing inside the city. Other tools include tax-exempt bonds for below-market interest rate loans through the Urban Residential Finance Authority and bond financing for small apartment projects and single-family homes, according to its website. 

It is unclear if the city planned to renew or create a new fund to replace the Opportunity Bond Fund. Courtney English, chief of staff for the city, did not answer a question from Bisnow about a potential replacement.

“Without additional public subsidy, affordable housing production in the city will stop,” English said in an email. “The Mayor is advancing the Neighborhood Investment Initiative, which represents the largest investment in affordable housing in the city’s history.”

An Invest Atlanta spokesperson said in an email the agency will "continue to advance affordable housing development through a range of existing tools. This includes deploying remaining Housing Opportunity Bond proceeds already in the market, leveraging Tax Allocation District (TAD) financing for gap funding, and advancing multifamily loan programs that support new construction and preservation."

Compared to existing available programs, the Opportunity Bond program offered Invest Atlanta more flexibility in choosing projects to help, Tate said during the event at the Wyndham Atlanta Buckhead Hotel.

“Most of our financing tools tend to be location specific,” Tate said. The Opportunity Bond Fund is “one of the rare tools that is also citywide,” he said.

“We need a new funding source that is similar, that's also citywide, so whether that's a reissuance of a new bond or another tool that can be utilized throughout the city, that's extremely important to ensure we have the production of affordable housing that we want,” he said.

Dickens has been pushing for city approval of his Neighborhood Reinvestment Initiative, a program that would extend half a dozen of the city’s tax allocation districts — self-taxing areas in the city where the extra property tax revenue is used to help finance economic development projects — through 2056 instead of sunsetting beginning in 2030. 

The initiative would help the city raise between $5B and $7B among the six extended TADs, according to Atlanta Civic Circle. But financing is only applied to projects within the geographic jurisdictions of the various TADs and not wholesale across the city. 

The mayor’s office had proposed a scaled-back version of the initiative last month in response to opposition from the Fulton County Commission and the Atlanta Public School Board, Atlanta News First reported. The initiative must also get approval from the commission and the school board.

Tate said the loss of the Opportunity Bond Fund has not impacted the current pipeline of affordable housing projects in the city.

But other factors are beginning to limit just how many and where in the city affordable housing projects will rise, panelists said during Tuesday’s event. Site selection is getting more complicated as developers of luxury and market-rate projects are willing to pay more for land, leaving leftover suboptimal sites, including awkward lot shapes and smaller lot sizes. That is forcing many affordable developers to partner with nonprofits, housing authorities and other entities to get projects off the ground.

“The trick in affordable is that a great piece of real estate [is] probably going to be monetized by a market-rate developer or someone who can bring more value than necessarily what we could do,” Columbia Residential Chief Development Officer Robert Fink said. “We might have site challenges, we might have to pay a little more, but in general, that's what we're looking for. It takes that partnership approach to really execute and bring affordability into Atlanta, and in any other city, really.”

Patrick Otellini, national affordable housing director for construction firm Swinerton, said municipal employees are often hampering “ambitious policy goals” by local government administrations when it comes to affordable housing growth as well. 

“We talk about 20,000 homes in Atlanta. I built in San Francisco. There's 80,000 that they're trying to build there. Having those ambitious plans are important because it sets the stage for the policy goals. But what happens is this big disconnect between the rank and file that are actually approving your plans, that are reviewing them,” Otellini said. “That's the challenge that I see in front of us.”

And some panelists said just hearing the word “affordability” causes some local residents to oppose new housing projects in their jurisdictions, making it more difficult for developers. Atlanta’s Neighborhood Planning Unit system — a system of resident advisory committees that vet proposed developments before they go before the city council — “unfortunately sometimes kills projects,” Five Points Development Founding Principal Cassius Coleman said. 

“It depends on the politician for their particular district. If they kowtow to the NPU, you have no chance,” Coleman said. “I've been in plenty zoning hearings where folks come out in the same color T-shirts, and they will absolutely, they'll stone you if they can, not to have that affordable project in their neighborhood, and I think that's the biggest issue.”

Tate said Invest Atlanta is working with the city and examining its own portfolio of real estate to turn over to developers for affordable housing projects. 

“Over the next, I’d say, 12 to 18 months. We are working together with our partners … whether that’s land owned by Atlanta Housing, land owned by the city of Atlanta, land owned by Invest Atlanta, and working to get those RFPs [request for proposals] out and put them back into private hands and active use,” he said.