Health care players take on city’s affordable housing crisis

Saint Joseph’s Health System first to do so within city limits

Atlanta politicians are betting on a new affordable housing complex to make a dent in the city’s housing crisis, and it’s the first within the city limits to have the backing of a health system.

Mercy Care officials, Atlanta Mayor Andre Dickens and Councilmember Liliana Bakhtiari, and Pennrose, LLC recently broke ground on a new 170-unit affordable housing project that they hope will energize developers and maybe even hospitals to build more low-cost housing.

“Housing and health care are two vital needs,” said Dickens, before digging a shovel into a mound of dirt on what will be known as McAuley Station. “This is a blessing that is going to add to people’s lives.”

The sky-high price of housing in Atlanta is no secret. Rents have steadily risen in recent years, displacing low-income residents or forcing them to sacrifice paying for essentials in order to make rent. Dickens, who has made affordable housing a centerpiece of his agenda, estimates housing costs have increased 65 percent over the last 12 years.

While the housing crisis isn’t new, health care players getting involved in trying to solve it is. Housing and the quality of that housing is increasingly seen as a critical factor in keeping people healthy. Other key ingredients include a safe, low-stress environment that has a sense of community, and easy access to transportation and jobs.

That’s what McAuley Station is aiming to achieve.

This complex, on Gartrell Street SE, will be tucked next to Mercy Care Clinic and Headquarters and will look like many of the new apartment complexes that have cropped up in Atlanta. There will be a rooftop deck with scenic views, resident lounges, a fitness room and business center. The complex will also be one block from the King Memorial MARTA station. The total development cost of these 170 units will come in at around $52 million.

But the rental cost is far lower than those high-end complexes: most rents for tenants will range from $850 to $1,400 per month, on average.

McAuley Station could be a peek into the next trend in affordable housing, as hospitals have started expressing more interest in housing. Kathryn Lawler, CEO of Saint Joseph’s Health System, said it is her hope that other Atlanta-area hospitals will follow suit.

Lawler estimated that Fulton and DeKalb counties alone spend approximately $11 billion on health care but has significant disparities, particularly among residents of color. But health care is proven to be just a small piece of what helps a person stay healthy.

“This is a modern 21st century response to an age-old question: How do we make sure the most vulnerable have access to that health care and the ability to thrive as well?” Lawler said.

Amon Martin, regional vice president for Pennrose, the developer of McAuley Station, said that the location of the new complex and proximity to a transit station are key to improving the lives of the future residents.

“This development is really bigger than just healthcare and housing,” he said. “It’s really addressing all of these needs.”

Credit: Pennrose

Credit: Pennrose

That said, some housing experts have questioned the need for creating units available to a one-person household who is making up to $54,000 a year.

The construction is expected to take about 22 months, with a projected opening in February 2024. Then there’s the next phase of the project: construction for 82 units designed for senior residents. That construction is expected to start in 2024.

The project is financed by cobbling together money from several pots: including bonds from Invest Atlanta, the city’s economic development authority; private equity from Truist Bank; a loan from Trinity Health Care; and Saint Joseph’s paid $4.37 million towards the project’s shared parking deck.

Mayor Dickens has pledged to build or preserve 20,000 units of affordable housing in the next eight years. Other politicians also tried to stem the housing crisis. Former Mayor Keisha Lance Bottoms wanted to invest $1 billion towards a similar goal of 20,000 units by 2026. She reached 7,000 units built with more than $700 million.

So far, Dickens has made progress. According to his office, the city has marked the completion of more than 1,200 affordable units and started construction on more than 4,000 units this year.

Even so, there’s a long way to go before housing in Georgia is accessible to all, particularly the lowest earners. According to the National Low Income Housing Coalition, 24 percent of renter households are extremely low income, and there is a dearth of 207,244 rental homes available for these lowest earners, who earn a maximum of $26,200 for a 4-person household.

McAuley Station will have some thirty units for those lower income people who are making just 30 percent of the area medium income, which is a maximum of $20,250 per year. Those units are funded by Partners for Home and Atlanta Housing and are for residents in need of supportive services.

Mercy Care will have a master lease on ten of the units, which are temporary units for homeless patients who are waiting on permanent housing.

The bulk of the complex is simply affordable housing.

Most of the units, 101 of them, will be available to renters who are earning 60 percent of the area median income. That means a one-person household can make up to $40,500 a year and a two-person household can make up to $46,320 a year.

Another 29 units are still below the market rate but are for higher earners making 80 percent of the area median income, meaning a one-person household can make up to $54,000 a year, and a two-person household can make up to $61,760 a year.

Andrew Aurand, vice president of research for the National Low Income Housing Commission, said he was pleased a project like this includes 30 units for some very low-income earners, and that they are following a housing model for those units that is proven to work. He questioned the need for investing in some of the higher-end units in the complex, where renters can earn 80 percent of the area media income.

“If you look at rents in the market, that need is often met right by looking at elsewhere. What is never met, is the needs of [lowest income renters],” he said.