The city’s low supply of affordable housing has gotten a boost from a group of private investors that has loaned money at below-market rates for a project near the stalled Quarry Yards development on the Westside.
The Atlanta Affordable Housing Fund will loan up to $2 million to the Grove Park Foundation to purchase between 15 and 20 abandoned homes and apartment buildings and vacant lots in the neighborhood. The foundation will construct new housing units on the lots, both for sale and rent.
Grove Park has one of the largest undeveloped tracts of land in the city, Quarry Yards, as well as proximity to the planned Beltline walking path and Westside Park. Those amenities have made it a target of luxury developers, leading to conflict with longtime residents over soaring real estate prices.
One development group, led by former Atlanta Braves slugger Mark Teixeira, planned a combination of luxury and affordable housing at Quarry Yards. Entities affiliated with Microsoft bought the site last year from Teixeira’s group, according to people with knowledge of the deal.
The Atlanta City Council last year placed a moratorium on new construction permits in Grove Park and nearby neighborhoods, with an exception for affordable housing.
Metro Atlanta has a shortage of affordable housing, as the region has grown but the supply of homes has lagged for families whose income falls below poverty levels. The city last month approved borrowing up to $100 million in bonds to invest in affordable housing and several groups are trying to accelerate the supply.
While $2 million is not a huge amount of money, it’s nearly impossible to obtain a loan at 3% to 5% in today’s market, said Debra Edelson, executive director of the Grove Park Foundation, a nonprofit group that partners with schools and community organizations on education, health and arts projects.
“The fund is stepping in where there is so much demand and so little supply,” she said.
The Atlanta Affordable Housing Fund has raised a total of $10.6 million for efforts like this one from Truist, the Arthur M. Blank Foundation and other local individuals and companies. The fund declined to provide a full list of its backers, who will receive a small return on their investments.
Affordable housing developers have been competing with private investors who quickly snap up vacant lots and abandoned houses, build new homes targeted at middle and upper-income buyers, then sell them for a profit.
The Grove Park Foundation will combine its own money with the fund’s low-interest loan, Edelson said. By combining those two sources of money, the foundation will be able to better compete with speculators.
Investors in the Atlanta Affordable Housing Fund are willing to accept a lower return to help stimulate affordable housing, said Althea Broughton, an attorney at Arnall Golden Gregory who is counsel to the fund.
Edelson declined to name the streets where the fund is buying property, but said it’s a particularly blighted section of Grove Park. She also declined to provide a timeline for purchases and the start of construction.
Most structures targeted for purchase are vacant, she said, adding that the foundation will find new homes for people who occupy the houses it buys.