At AHIC’s 2024 Fall Affordable Housing Summit, a session titled "Atlanta’s Innovative Approaches to Affordable Housing" highlighted the city’s ambitious initiatives to address its affordable housing crisis. The session featured Terri Lee, President & CEO of Atlanta Housing, as the keynote speaker, alongside a panel of local leaders including Joshua Humphries, Senior Housing Advisor to Mayor Andre Dickens; Dr. Eloisa Klementich, President & CEO of Invest Atlanta; and Frank Fernandez, President & CEO of the Community Foundation for Greater Atlanta.

The discussion focused on how Atlanta is leveraging public-private partnerships, innovative financing models, and the use of publicly owned land to create and preserve affordable housing. 

Addressing Atlanta’s Affordable Housing Shortfall
The session opened with an overview of Atlanta’s affordable housing crisis, which has been exacerbated by rapid population growth and rising housing costs. Terri Lee highlighted that the city faces a deficit of more than 100,000 affordable housing units, particularly for low- and moderate-income households. With the city’s population growing by over 63,000 residents in the past year alone, the demand for affordable housing has far outpaced the supply.

Mayor Andre Dickens’ administration has set a goal of creating or preserving 20,000 affordable housing units by 2030. Joshua Humphries outlined how the city is mobilizing resources from both the public and private sectors to meet this target. A key component of this strategy involves using public land and assets to drive affordable housing development, as well as attracting private investment through tax incentives and financing programs.

Atlanta’s commitment to addressing its affordable housing shortfall presents a significant opportunity. With strong political support and an ambitious housing agenda, the city is actively seeking partnerships with developers and investors who can help deliver affordable units. The demand for affordable housing in Atlanta is expected to remain high for the foreseeable future, making it an attractive market for LIHTC projects.

Leveraging Public-Private Partnerships for Development
One of the central themes of the session was the role of public-private partnerships in advancing affordable housing development in Atlanta. Dr. Eloisa Klementich from Invest Atlanta described how the city is using tax allocation districts (TADs), tax-exempt bonds, and other public financing tools to attract private investment. These public subsidies are critical for closing the financing gaps in affordable housing projects, particularly in high-cost areas.

A prime example of public-private collaboration is the redevelopment of a fire station in Midtown Atlanta into a mixed-use property with affordable housing and commercial space. This project, located on land owned by the city and valued at $20 million, demonstrates how Atlanta is leveraging publicly owned assets to create affordable housing in prime locations. By providing land and offering tax incentives, the city is able to attract private developers to build projects that would otherwise be financially unfeasible.

Frank Fernandez from the Community Foundation for Greater Atlanta emphasized that philanthropy also plays a key role in these partnerships. The foundation has mobilized $200 million in capital to support affordable housing projects across the city, using both grants and impact investments to fill financing gaps. These philanthropic funds are often used to support projects that serve the most vulnerable populations, such as seniors and legacy residents who are at risk of displacement due to rising housing costs.

For LIHTC investors, public-private partnerships are essential to making affordable housing projects viable in Atlanta. The availability of public subsidies, combined with philanthropic support, helps to reduce the financial risk of these projects while ensuring long-term affordability. Investors should seek out opportunities to collaborate with public agencies like Invest Atlanta, as well as philanthropic organizations that are committed to supporting affordable housing initiatives.

Creative Financing Models and Layered Funding Structures
Financing affordable housing projects in Atlanta often requires developers to use creative financing models and layered funding structures. Terri Lee and Dr. Eloisa Klementich discussed how developers are using a combination of federal LIHTC, state tax credits, tax-exempt bonds, and local subsidies to close the financing gaps in their projects.

A key strategy that developers are using is the combination of LIHTC with other federal and state funding sources. Joshua Humphries explained that the city has been successful in securing project-based Section 8 vouchers for many of its affordable housing projects. These vouchers provide long-term rental income, allowing developers to leverage more debt and reduce the amount of equity required. In addition, Atlanta Housing has been working with developers to secure federal HOME and CDBG funds, which provide additional subsidies for affordable housing development.

Frank Fernandez highlighted the role of impact investing in affordable housing finance. The Community Foundation for Greater Atlanta has established an impact investing fund that provides low-interest loans and equity investments to affordable housing developers. This fund is designed to complement public financing by providing flexible capital that can be used to fill funding gaps. By combining public and private capital, the foundation is able to support projects that might not otherwise be financially viable.

For LIHTC investors, understanding how to layer multiple sources of financing is critical to making deals work in Atlanta’s high-cost market. Projects often require a combination of LIHTC, tax-exempt bonds, philanthropic contributions, and local subsidies to cover development costs. Investors should partner with developers who have experience navigating these complex capital stacks and securing multiple layers of funding.

Use of Public Land for Affordable Housing
Another key strategy discussed during the session was the use of public land to support affordable housing development. Terri Lee explained that the city of Atlanta owns a significant amount of underutilized land that is being redeveloped for affordable housing projects. By making this land available to developers at little or no cost, the city is able to reduce the overall cost of development and ensure that more units are affordable to low- and moderate-income households.

One of the most notable projects is the redevelopment of the Two Peachtree building in downtown Atlanta. This nearly million-square-foot structure, which was previously used as a government office building, is being converted into a mixed-use development with affordable housing and commercial space. The project is part of a broader effort to revitalize downtown Atlanta while ensuring that low-income residents have access to affordable housing in the city center.

Joshua Humphries noted that the city is also exploring opportunities to partner with private landowners to develop affordable housing on privately owned land. Through zoning incentives and density bonuses, the city is encouraging private landowners to include affordable units in their developments, particularly in areas where land prices are high.

For LIHTC investors, projects that involve the redevelopment of public land offer a unique opportunity to participate in high-profile developments with strong political support. These projects often come with favorable financing terms and are located in prime areas with high demand for affordable housing. Investors should seek out opportunities to work with public agencies like Atlanta Housing to identify projects where public land can be leveraged to create affordable housing.

Reducing Bureaucratic Barriers and Streamlining Development
A major focus of the session was Atlanta’s efforts to reduce bureaucratic delays and streamline the development process for affordable housing. Dr. Eloisa Klementich discussed how the city has implemented an expedited permitting system for affordable housing projects, which allows developers to move through the approval process more quickly. This streamlined process is designed to reduce the risk of costly delays that can jeopardize the financial viability of projects.

Terri Lee added that the city has also made efforts to align its housing policies with federal and state programs to ensure that developers can access multiple sources of funding without facing conflicting requirements. For example, the city’s affordable housing programs are designed to complement federal LIHTC and Section 8 programs, making it easier for developers to combine these resources in a single project.