On Wednesday, November 15th, 2023, KB Advisory and ULI Atlanta released a 72-page report detailing housing challenges and potential solutions in the five core counties of Atlanta: Fulton, DeKalb, Clayton, Cobb, and Gwinnett. The report is a five-year update to the original ULI Affordable Atlanta study from 2018.
As shown by a “scorecard” on page eight, Atlanta has done a solid job expanding capital resources for affordable housing over the past five years. Mayor Dickens, for example, has made affordable housing a key initiative of his administration. Leadership from HouseATL and ARC, among others, has also provided resources and important dialogue. As a result, affordable rental stock increased 14% over the past five years, keeping pace with a 13% increase in market rate units. However, when you dive deeper, KB Advisory’s numbers tell a less promising story.
The 2023 study details housing affordability at different levels of household income, using ‘income as a percent of area median income (AMI)’ as the measuring stick when held up against the median costs to rent or own a home. Most policy benchmarks for housing subsidies and tax credits use the same unit of measurement. KB then separates these levels of median income into groups and calculates what percent of each is “cost burdened,” which is when a household spends 30% or more of its income on housing.
Averaged across the five core counties, 28% of households and 50% of all renters are cost-burdened. Notably, lower-earning households have struggled most to keep up: those making less than 50% of AMI represent 71% of all cost burdened households in the region. This is because incomes are increasing less than housing costs, and the demand for affordable housing is not met by the current supply. Many low earners therefore must move to more affordable areas but, as KB notes, the housing cost savings are off-set by an increase in transportation costs: “households under 80% AMI are spending 3-5% more of their income on transportation than those with 100% AMI.” KB highlights that paying half of a household income on housing and transportation limits the ability to meet other critical needs such as food, education, and healthcare.
The report goes on to consider other factors and different ways of looking at the data, and the bottom line is this: the costs of rent, homes, and transportation are growing faster than incomes, particularly for lower-earning households.
KB Advisory and ULI Atlanta’s policy recommendations outline three necessary building blocks: increase the housing supply, subsidize affordable demand, and invest in regional leadership and resources. They stress the importance of defining roles, leveraging partnerships, and standardizing regional residential zoning. “The NEW NEED is to link [ARC] initiatives and HouseATL recommendations to provide communities with resources and hold them accountable for implementation,” the report says.
For another summary of the 2023 Affordable Atlanta study, see the Atlanta Business Chronicle’s recap.click here to download the report