Experts: Sandy Springs’ affordable housing policy should help lower incomes

Sandy Springs may mandate affordable housing in large multifamily developments, a major policy change proposed in its latest draft zoning code. But two experts in housing policy say the proposed affordability categories must go lower to help the low-income residents who need it the most.

It would be the city’s first-ever affordable housing mandate, and is under consideration as skyrocketing rents and house prices displace residents and price public safety workers out of the local housing market.

The policy is what is widely called “inclusionary zoning,” though Lee Einsweiler, the consultant drafting the new zoning code, said the city does not want to use that term, instead preferring “mixed-income floor area.”

The proposed policy would require a certain percentage of affordable housing, guaranteed for at least 30 years, in any new multifamily project – for sale or rental – of 20 units or more. The amount of affordable housing required would be a percentage of the project’s gross floor area, not a number of units.

The developer could build the affordable units into the project, the “primary and preferred” option; build them off-site somewhere else; or pay a “fee-in-lieu” of $3 per square foot, which would go into a trust fund to plan, subsidize or develop affordable housing.

The “affordable” rates are based on the area median household income, or AMI. The “area” is the U.S. Census’s Atlanta-Sandy Springs-Roswell statistical area used by the federal and local governments for demographic data, according to city spokesperson Sharon Kraun. The latest AMI estimate for that area, dating to 2015, is $60,219 a year.

For on-site development in the city’s proposed policy, there are two options, one focused on middle-income affordability and one on lower-income affordability. In option one, 5 percent would go to housing affordable to households making less than 80 percent of AMI ($48,175 a year), and 5 percent to those making less than 120 percent of AMI ($72,263 a year). In option two, 5 percent of the project would go to housing affordable to those making less than 50 percent of AMI ($30,110 a year).

If the developer takes the off-site option, 7.5 percent of the project must go to those making under 80 percent of AMI and another 7.5 percent to those making under 120 percent of AMI.

In addition, the draft code proposes a bonus system allowing multifamily developments to build higher in exchange for offering more affordable housing – both in terms of a higher percentage of floor area than required and in providing units for lower-income residents. The code does not define what those affordable offerings must be to trigger the bonuses. Einsweiler said it would be up to City Council to judge.

An earlier draft code proposed a limited affordable housing incentive – not a mandate – focused solely on middle-income housing and performed only via a bonus system. The incentive used a unique and complicated formula. In public meetings, the idea was criticized as insufficient and confusing.

The new proposal is stricter, broader and more in line with national models. It’s also closer to the city’s previous two real-life experiments in affordable housing.

In 2015, the city convinced North American Properties to make affordable 10 percent of the units in a 305-unit apartment building now under construction on Johnson Ferry Road in the Medical Center area. “Affordable” was defined as 80 to 120 percent of the Fulton County median income, and the units must remain affordable for 10 years.

And this year, the city began renting a three-bedroom house it owns at 521 Hammond Drive to a Sandy Springs police officer for the bargain rate of $500 a month, following concerns that public safety employees cannot afford to live in Sandy Springs. Department payroll records show that officer’s salary is $54,817.15, or 91 percent of AMI. That doesn’t include the over $4,000 in overtime and bonuses the officer earned so far this year, or any income anyone else in the household may earn.

The experts’ views

Two housing policy experts – Dan Immergluck at Georgia State University’s Urban Studies Institute and Larry Keating, a retired Georgia Tech urban planning professor – gave the city’s new affordability proposal mixed reviews and agreed it needs to aim at lower income levels.

Keating – author of the influential policy book “Atlanta: Race, Class and Urban Expansion” — said that as a general rule, “unless the ordinance reaches renters under 30 percent of AMI, it will not help those who need it most.”

Ownership policies should focus on lower income levels as well, Keating said. “Reserving sales housing for folks at 80 percent or 100 percent of AMI is a pseudo-program in the sense that it helps almost no one with a housing problem and subsidizes developers,” he said.

Immergluck, a scholar of affordability and displacement issues around such developments as the Atlanta BeltLine, clarified that while the city’s policy refers to “affordable” housing, some of it is more “attainable” housing – a term for something that fits into a middle-class budget.

He said that by federal and most state guidelines, 80 to 120 percent of AMI is considered “middle-income”; 50 to 80 percent is “moderate-income”; and below 50 percent is “low-income.”

“So unless a program addresses households below 80 percent, it is not really addressing what are generally thought of as affordable housing needs,” Immergluck said. “It is addressing attainable housing among the middle-class. A household whose income was derived from the salary of a police officer or teacher would often be below 80 percent of AMI.”

“Moreover, the greatest need for affordable housing is for those earning below 50 percent of AMI,” he added.” “That is where the housing supply is declining and the need is the greatest… Some portion of all ordinances should require a share of new housing to be below 50 percent [of] AMI.”

Immergluck supported a couple of concepts used in the city’s proposed affordability policy. Requiring middle-income affordability in owner-occupied developments like condos “may provide an excellent way to serve this [middle-income] population,” he said.

He also liked using the bonus system as one tool.

“Sandy Springs has relatively high land costs, so some form of benefit – such as the density bonus, or possibly other benefits – may be needed to partially compensate developers providing lower rents, in particular for those units priced at rents affordable to those below 50 percent AMI,” he said.