By Andrea Rattray, Tapestry Development Group
The Atlanta region is currently seeing a rapid increase in the need for affordable housing as Atlanta continues to grow the focus has been on “luxury” multifamily rental developments, putting upward pressure on rents across the region. While the new construction of affordable multifamily rental housing continues through current programs, the demand for affordable rental housing far outweighs the supply. To mitigate this growing demand for safe stable affordable housing options, programs and capital should be made available for the preservation of existing affordable housing multifamily rental properties. While existing programs are available for the preservation of affordable housing through programs like the Low Income Housing Tax Credit Program, the high-barrier-to-entry nature of these programs make it difficult for property owners to access these capital sources. When existing property owners can access capital for the moderate rehabilitation of existing properties, the cost of rehabilitation can be too expensive due to the rising cost of labor, materials and the lack of efficiencies of scale for single property low-unit count renovations. The cost implications of renovation make it difficult for property owners to find rehabilitation financially feasible without large increases in rent to offset the cost of borrowing funds.
Tapestry Development Group’s Atlanta Affordable Housing Preservation Program is designed to offer low-cost capital to mid-size affordable housing multifamily property owners with properties serving residents at 80% AMI or below.
Selected property owners would access low-interest funds for moderate rehabilitation needs in exchange for locking-in current the affordability level for a 10-year period or a period to match loan repayment terms. The Program will prioritize properties in areas located near public transportation, quality education facilities, employment centers and other amenities that will increase access to opportunity for low-income residents. The program will maximize efficiencies by developing bulk pricing for interior finishes with several finish styles available to property owners. The program will also negotiate with consultants and subcontractors to provide services and labor at the selected properties with opportunities to provide job training to current residents.
The second phase of the ATL Preservation Challenge will focus on developing best practices through case study analysis of existing moderate rehabilitation affordable housing programs around the United States to understand the program requirements, timing and utilization of funds. This analysis will provide understanding of the frameworks and policies needed to implement the program successfully. The research will also explore potential capital and subsidy sources to support the proposed program. Tapestry Development Group will work with existing capital sources to assess the viability of funding moderate rehabilitation projects. Tapestry Development Group will also meet with current affordable multifamily housing property owners to assess the capital needs of the properties, the current limitations to accessing funding and the incentives required to enter into the proposed program. To further enhance the framework the program will explore procedures and methods of engaging current residents into the rehabilitation process of the properties.
As the need for quality affordable housing in Atlanta continues to outpace the supply, it is essential to develop greater access to capital for existing property owners to maintain and preserve affordable housing units. The proposed program provides benefits both to property owners and residents. The program also promotes the stability of the property by maintaining ownership through rehabilitation, maintaining the rent affordability of the property and increasing the quality of the property. The objective of the Atlanta Affordable Housing Preservation Program is to provide a cost-effective opportunity for current property owners to access capital to rehabilitate multifamily rental units while securing the affordability of the units and improving the living conditions for residents.