Atlanta Housing Authority sues to kill deal to subsidize homes for affluent residents

The Atlanta Housing Authority headquarters.

Credit: Willoughby Mariano

Credit: Willoughby Mariano

The Atlanta Housing Authority headquarters.

The Atlanta Housing Authority filed suit Friday against one of its longtime development partners to kill a deal that could push the agency to subsidize homes for affluent residents.

The deal to sell one quarter of the agency’s vacant land to Integral Group at below market value would be “unconscionable,” AHA lawyers argued in a Fulton County Superior Court complaint.

The contracts “do nothing to address the shortage of affordable housing for low-income persons; they do not create or facilitate access to low-income housing or demonstrate the benefit to low-income residents,” AHA;s complaint states. “In fact, (they) actively subvert the AHA’s ability to perform its public mission.”

An Integral spokeswoman could not be immediately reached for comment.

The deals to sell land at the former Capitol, Carver, Grady, and Harris homes were made in 2011 in the waning months of former AHA head Renee Glover's leadership. A March Atlanta Journal-Constitution investigation determined the contracts would lead the housing agency for the poor to subsidize homes for the well-off.

Some of the land is extremely valuable. Certain parcels lie near the Beltline, the ambitious, city-wide development project that has sent real estate values skyward and is far behind on its mandate to build affordable housing. Others are in rapidly gentrifying areas near downtown.

Integral, co-founded by well-known Atlanta developer Egbert Perry, was key to transforming AHA's housing projects into mixed income properties during the 1990s and early 2000s.

Officials hailed the effort as a national model, but more than a decade later, a planned grocery store, single-family houses, and other amenities have yet to be built. Perry said the nation’s historic housing bust halted those plans.

Perry and Glover told the AJC that the agreements received all required approvals from AHA’s board and the U.S. Department of Housing and Urban Development, but the suit argues it was done without the board’s knowledge.

In a written statement, AHA board Chairman Robert Rumley said the contract would violate state law and Georgia's constitution.

"The backroom deal is unenforceable in many ways, and shows a complete disregard for the mission of AHA, which is to provide housing to individuals and families, many of whom are single mothers, who are working hard and yet struggling to find affordable housing in the city of Atlanta," Rumley said.

HUD records of the deal provided to the AJC through a federal public information request show no evidence that the federal agency approved the specifics of the sale of vacant land. AHA's CEO Catherine Buell previously said the agency can find no records documenting why the deals were made, and members of the board said they did not approve it.