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Addressing legacy resident displacement in Atlanta

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Addressing legacy resident displacement in Atlanta

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Overview

As rising costs make homeownership increasingly unobtainable for many low- and middle-income families across the US, localities are increasingly exploring methods to address racial disparities in access to housing by expanding affordable home ownership options. Community Land Trusts (CLTs) are one approach localities have turned to for creating and maintaining affordable units in communities. CLTs, which trace their modern American origin to the civil rights movement in Albany, GA, are a common mechanism for Shared Equity Housing. Especially popular in booming housing markets, CLTs seek to close the homeownership gap and mitigate the displacing effects of neighborhood change by using one-time investments to make homes affordable for homebuyers — especially from marginalized groups — who would not otherwise have been able to afford them (for more information on CLTs see this Local Housing Solutions brief).

This case study features the Atlanta Land Trust (ALT), a CLT founded to address homeownership affordability and legacy resident displacement along the Atlanta BeltLine. Atlanta, GA is the fourth fastest-growing metropolitan area in the country. This growth yields benefits but also contributes to rising housing costs that have displaced many legacy residents, particularly Black residents. In the sections below, we review the ALT’s history, operations, and its progress towards its goal of helping long-term residents benefit from the opportunities that Atlanta’s development brings. 

Key Takeaways 

It is important to note that the ALT is one of many valuable policy solutions in Atlanta’s comprehensive housing strategy (see this Local Housing Solutions profile). The organization was created to preserve some affordable housing in specific locations along the Atlanta BeltLine for people — especially those from marginalized groups — who would not otherwise be able to afford homes (see the Description section for more information). Given its inextricable link to the BeltLine, the ALT should not be viewed as a generic prototype of a CLT; it should be evaluated according to its particular goals and context. Policymakers seeking to create or expand CLTs elsewhere should take their own needs and goals into account instead of directly replicating the ALT.

With that noted, there are several key takeaways for policymakers to consider including: 

  • Despite its modest goals, the ALT is a vital part of Atlanta’s housing affordability action plan. Accordingly, the ALT should be evaluated as one piece of a larger scheme.
  • The ALT’s ability to achieve the goals contained in its five-year strategic plan depends in part on collaboration with its partner organizations. The ALT’s scope is currently structured to enable it to steward and develop a relatively limited number of affordable homes. It lacks the financial leeway to fund an expansive vision on its own. Related activities like property development and portfolio expansion requires collaboration with numerous community organizations and stakeholders. In the long run, maximizing its potential to reduce displacement of legacy BeltLine residents will require the ALT to deepen its existing relationships with partners including the Metro Atlanta Land Bank, Atlanta BeltLine Partnership and Atlanta Beltline Inc., and city agencies. Therefore, institutions like the Catalytic Land Cohort, which provides technical assistance to help cement the relationship between the ALT and Metro Atlanta Land Bank, are useful means of helping the ALT and its partners work towards common goals. 
  • The ALT’s emphasis on affordability, reducing displacement, and increasing racial equity is valuable given the current decline in Black homeownership and residential displacement in Atlanta. As the Description and Outcomes sections detail, efforts like this are particularly important given Atlanta’s legacy of housing discrimination and the pronounced increase of housing costs along the BeltLine.
  • CLTs present significant tradeoffs. As discussed in the Outcomes section, CLTs can increase housing access but limit wealth generation for participating households. 
  • Similarly, CLTs require significant public investment. Depending on local market conditions and public investment models, that large public investment could potentially benefit a larger number of people if spent differently. Accordingly, the ALT and CLTs in general may not be appropriate policy interventions for all localities.

Description

The ALT was established largely to buffer the effects of anticipated rapid development along the Atlanta BeltLine which has contributed to rising rents, untenable living costs, and displacement of longtime residents. Specifically, the ALT endeavors to, “steward permanently affordable housing to support inclusive, equitable communities near the Atlanta BeltLine and other targeted areas in the city of Atlanta.” 

As with other CLTs, approved home buyers purchase homes from the ALT while leasing the land under the home from the ALT on a long-term, renewable basis. Meanwhile, the ALT retains ownership of the land itself which helps keep housing costs below market rate since homeowners only buy the house and not the land it occupies. If ALT homeowners choose to sell their home, the organization ensures its continued  affordability using two resale formulas and so enables households that would not otherwise have been able to buy a home to realize at least some gains from their investment. 

Background: About the Atlanta BeltLine Project

The Atlanta BeltLine project aims to build 33 miles of multi-use urban trails around the city by 2030 to help connect Atlanta’s outer neighborhoods to its urban core. Since the formation of the Atlanta BeltLine Partnership in 2005, the Atlanta BeltLine project has become one of the largest urban redevelopment efforts in the country. Proponents believe it can promote equitable urban development by generating $10 billion in economic development for many long-neglected neighborhoods. Moreover, the project can make Atlanta more eco-friendly by encouraging public and non-car transportation and expanding green space. Finally, Atlanta BeltLine, Inc. intends to expand affordable housing in the areas it touches. Specifically, it has helped build or preserve over 2,000 units of affordable workforce housing out of its goal of 5,600 by 2030 (a goal the ALT can help achieve).

So far, the BeltLine project has been criticized for undermining two of its stated goals — equity and inclusion. Citywide data suggests that increased demand is putting pressure on housing costs across the city. From 2000 – 2017 median income in Atlanta increased by 48%, median rent jumped by 70%, and currently 69% of Atlanta households spend over 30% of their income on housing. Meanwhile, Black homeownership rates dropped by 5.5%. Similarly, The BeltLine project has been linked to increased housing costs in neighborhoods it passes through. These challenges have become particularly pronounced in recent years  as a raft of businesses have opened offices in or relocated to Atlanta. As companies like Microsoft settle along the BeltLine, they attract higher-income households who tend to buy homes and exacerbate affordability and displacement-related problems. These trends raise concerns that legacy residents, most of whom are Black and faced past and present housing discrimination, will be blocked from opportunities BeltLine development brings. 

The Atlanta Land Trust

Though the ALT was proactively established in anticipation of potential  displacement along the BeltLine, it also ultimately seeks to support inclusive, affordable housing in other targeted areas of Atlanta that are also vulnerable to similar economic challenges. 

The ALT’s scope is primarily focused on reducing displacement and promoting equity by stewarding properties it owns and delivering them to prospective homebuyers. Thus, property development and portfolio expansion requires collaboration with an array of community organizations and stakeholders — ranging from the City of Atlanta to neighborhood associations, and real estate developers. For example, partnerships with philanthropic partners, like the Annie E. Casey Foundation, which can purchase and ultimately transfer affordable homes for the ALT to steward, helps the ALT grow its housing stock while donations from a range of funders, such as the Ford Foundation and The Kendeda Fund, helps the ALT finance its operations. Furthermore, its governance structure includes a tripartite board comprised of neighborhood residents (including both both ALT residents and community members of neighborhoods where the ALT is active), nonprofit representatives, and public and private stakeholders, including municipal policymakers from agencies like the Atlanta Housing Authority and Invest Atlanta, and representatives from businesses operating along the Beltline. 

One of the ALT’s most important partners is the Metro Atlanta Land Bank, which has the legal and financial mechanisms to acquire abandoned, blighted, and tax-foreclosed properties which it can use to transfer some of those properties to the ALT (a common practice land banks and land trusts use). The two institutions have worked closely together for years, and enjoy cross-board membership; furthermore, the ALT and Metro Atlanta Land Bank recently entered Grounded Solutions Network’s ‘Catalytic Land Cohort’, a 36-month initiative that will further cement their symbiotic relationship.

Finally, it is worth noting that the ALT was a limited operation after the departure of the first Executive Director in 2013, until it hired its current Executive Director, Amanda Rhein, in 2018. The rapid growth serves as a springboard for the ALT’s five-year strategic plan which includes a goal of having 50 units under stewardship by the end of 2021 and 300 by 2025. 

Process

The Atlanta Land Trust formed after a years-long effort of several independent, Atlanta-based CLT programs working to coordinate themselves. Despite their slow beginnings, these decentralized efforts were able to achieve some milestones before ultimately forming the unified ALT: 

  • 2009: A group of more than 30 public, private, nonprofit and community organizations (including the Atlanta BeltLine Partnership) founded the Atlanta Land Trust Collaborative as a network of CLTs. That same year, the Annie E. Casey Foundation purchased 53 vacant homes in Atlanta’s Pittsburgh neighborhood and transferred ownership of them to the Metro Atlanta Land Bank, which would eventually transfer stewardship of a portion of these properties to the ALT. This process helped develop a partnership between the Land Bank, philanthropic funders, and the ALT that continues to grow.
  • 2012: The Land Trust Collaborative executed agreements for its first three units. 
  • 2014: Christopher Norman was elected as Board President. Mr. Norman is the executive director of the Metro Atlanta Land Bank and his hiring helped further solidify the relationship between the two complementary institutions. 
  • 2017: Recognizing that competition between CLTs for philanthropic funds was limiting the model’s potential to secure and deliver permanently affordable homes, the network was consolidated into a single entity — the ALT. This structural change has allowed for a more centralized approach and has mitigated the unintended consequence of smaller CLTs cannibalizing philanthropic funds. 

As noted above, the ALT has grown rapidly since 2018. Since the hiring of Executive Director Rhein in 2018, the organization’s development pipeline grew from 60 to over 200, with an existing portfolio of 20 homes that are either under contract or owned by the ALT. the Other more recent milestones include:

  • 2019: The One Atlanta Housing Affordability Action Plan was released by Mayor Lance Bottoms’ office. The plan, which endeavors to create or preserve 20,000 affordable homes by 2026, explicitly lists working with the ALT as a means of reducing displacement. This inclusion recognizes that the ALT has a specific role to play in the city’s overall affordable housing framework. 
  • 2019: The first units transferred to the ALT from the Annie E. Casey Foundation’s 2009 Pittsburgh neighborhood purchase were sold to homeowners at affordable prices. A year later the foundation indicated that they want 33% of the 72 units of affordable housing it has created and preserved in the Pittsburgh neighborhood (which the BeltLine goes through) to be transferred to the ALT.
  • 2020: The ALT received a $895,000 donation from The Kendeda Fund — its largest single donation to date — to acquire property to build 50 affordable housing units.
  • 2020: A Property Tax Homestead Exemption passed as a ballot referendum in Atlanta. This will allow ALT homes to receive a $30,000 property tax exemption which other ATL home owners already have, making the model a more appealing option for prospective homebuyers.
  • 2020: The ALT rolled out a five-year strategic plan to guide its work. The plan will track a number of short- and long-term outcomes which will help policymakers gauge how effectively it is achieving its goals. Chief among these is units added to the portfolio per year (see below) but other indicative factors include prevented displacements, measures related to housing costs for homeowners (vs the market), percentage of homeowners that are rent burdened, and increased racial equity in homeownership.
  • March 2021: City Council passed a law to create a special services tax district for multi-unit dwellings and businesses around the BeltLine which should secure the funding to complete the BeltLine project by 2030. This development is a boon for the BeltLine project but makes the need for affordable housing more urgent. 

Outcomes and Important Considerations

Since the ALT is only in the first year of its five-year strategic plan, further evaluation will be needed on the ALT’s short-term outcomes to gauge whether the organization is achieving its goals. That said, some promising indicators include: 

  • By the end of 2020 the ALT had a pipeline of over 50 families ready to purchase homes from the organization. 
  • The ALT attracted $1.5 million in new funding in 2020, an important step towards fulfilling its five-year strategic plan. 
  • At the time of this case study (July 2021), the ALT has over 200 units in its pipeline (including 125 units that are expected to begin construction by  late 2021 or early 2022) and 20 in its portfolio with a goal of expanding its portfolio to 50 units by the end of 2021.
  • In the coming months, the ALT is set to receive an additional 14 homes from the Metro Atlanta Land Bank which will help keep the ALT on track to reach its 2021 goal and further solidify the relationship between the ALT and Metro Atlanta Land Bank. 
  • Though the ALT’s portfolio is modest, 75% of ALT homeowners are Black demonstrating the organization’s emphasis on racial equity in this early phase.

Important considerations worth monitoring moving forward include:

  • The  CLT model offers limited opportunities for wealth generation, which is a chief cause for concern amongst detractors of the ALT and CLTs in general. For example, in the Pittsburgh neighborhood of Atlanta an ALT-owned property can appreciate at 2% per year. Meanwhile, housing prices in that neighborhood have jumped 200% in five years. Though ALT homeowners may not have been able to afford a home in the first place without the ALT, this tradeoff is still notable.
  • Relatedly, critics charge that policies like redlining allowed white families to buy homes and build generational wealth that people of color were largely excluded from for decades. These critics argue using a CLT framework may help some marginalized families attain homeownership, but only at the expense of forgoing wealth-building that systemic racism denied them. Using this logic, the ALT will never be able to fully deliver outcomes that match the scale of the historical harms that led to CLTs being created in the first place. 
  • Finally, some researchers worry that the public benefit of CLTs is not worth the cost. The average construction subsidy cost required for an ALT unit is $49,467. Some researchers suggest that CLT subsidies should be used elsewhere, such as interest-free home buyer loans, which they argue would help more low-income individuals purchase homes. This is a cost/benefit calculation worth considering by policymakers in Atlanta and other localities considering implementing CLTs.

Policy Significance 

Given the small size of the ALT’s projected portfolio by 2025 (300 units) relative to Atlanta’s overall affordable housing goals by 2026 (20,000) it can be tempting to minimize the significance of the ALT. Though the model is simply one part of a larger framework, its growth and nexus to the Shared Equity Homeownership movement suggest that it should not be dismissed out of hand. To that end, there are several significant policy implications that policymakers should consider. Specifically:

  • Addressing racial disparities in home access and tenure for legacy (largely Black) homeowners is a central goal to the ALT. If successful, people long-excluded from housing in Atlanta will have access to the BeltLine’s opportunities which may partially repair long-standing damage. 
  • If the ALT achieves its goals then it will have helped prevent the displacement of hundreds of low-income families which could help sustain the culture that has been built by legacy BeltLine residents.
  • The ALT can help instill permanent affordability in low- and moderate-income neighborhoods. Effectively, the ALT could ensure that there is a stock of at least some affordable places available to low-income homebuyers. This will ensure that lower income households will have access to these neighborhoods for generations.

Additional Resources

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