Invest Atlanta, the City of Atlanta’s development authority, recently announced the creation of a $15 million transit-oriented development (TOD) fund. The $15 million pilot fund will provide below-market capital to support the acquisition and eventual development of workforce housing near MARTA stations, the Atlanta Streetcar and the Atlanta Beltline. Invest Atlanta also mentioned in their announcement “other modes of transit” but it is unclear what those could be.
The fund comes from different sources – $4.5 million from the City of Atlanta Housing Opportunity Bond financing and an additional $10.5 million from the Enterprise Community Loan Fund and Low Income Investment Fund.
“Every day, about 70 percent of our region commutes to a different county for work, which affects the productivity and economic output of our workforce,” said Dr. Eloisa Klementich, President and CEO of Invest Atlanta. “Lowering a worker’s commute time by just one hour per week can effectively increase that worker’s wages by almost $1,000 annually. If we can achieve this with just 20 percent of our workforce through investments like the transition-oriented development fund, we can inject an extra $460 million into our local economy.”
Non-profit and for-profit affordable housing real estate developers will be able to access the fund for low-interest loans. These developers will be able to access capital for the TOD projects at a lower cost than traditional financing options. Ideally, projects supported via the TOD will encourage further development in the areas identified by Invest Atlanta.
The Enterprise Community Loan Fund and Low Income Investment Fund have previously supported projects in the San Francisco Bay Area, Seattle/Puget Sound and Denver. All places that may have city halls and developers seeing dollars but may spark those concerned about a real estate crunch or the “G”-word – gentrification – to get nervous. Invest Atlanta, city officials and the developers undoubtedly hope that the inclusion of many affordable housing units will deflect some criticism.
The Atlanta real estate-centric website Curbed penned an article questioning whether the fund would be enough. In the multi-family real estate world, $15 million may not be that much. Curbed used the much-hyped reopening of the Hotel Clermont as one example. That single project cost nearly twice the value of the total TOD. However, there are additional funding sources that developers may be able access going forward.
Some of those other sources have already spurred projects in a number of areas, including:
King Memorial MARTA TOD: A 385-unit modular multifamily community at the King Memorial MARTA station with 93 units income-restricted to households earning 80% of the area median income (AMI).
Edgewood-Candler Park MARTA TOD: Retail and 224 apartments, 34 of which are designated as workforce housing. This project also included a $42.9 million lease-purchase bond transaction approved by Invest Atlanta.
161 Peachtree: Located in the heart of the hotel, convention area of Downtown Atlanta, a 14-story, 345-unit residential tower. Seventy units will be for affordable workforce housing. The Eastside TAD provided a $9 million grant for the project.
The Avery at Underground: Part of the massive Underground redevelopment project, a 4-story, 180-unit multifamily workforce housing development with access to MARTA’s Five Points station. The Eastside TAD grant also contributed $3.6 million to this project.
