The Sandy Springs Development Authority recently heard from a development executive about how the city could incentivize affordable housing.
Josh Marx of Prestwick Development Co. spoke to the authority at its Jan. 13 meeting. Prestwick is a development, construction and investment group that specializes in tax credit and market rate multifamily housing. It has developed approximately 45 communities since its founding in 2008, Marx said.
The Sandy Springs Housing Needs Assessment released in November 2020 said that local employers reported difficulty attracting and retaining workers with wages under $50,000. A limited supply of affordable rental and for-sale housing was given as a top reason.
The city also lacks entry-level single-family homes, as 81% sold above $400,000. That price is unaffordable to most households earning less than $115,000 annually, the study said.
The biggest shortage is for rental property at or below 50% of the average median income. Sandy Springs had a demand for 7,100 units in 2019, but only 1,830 units rented at those rates in the city, a gap of 5,720 units, the Housing Needs Assessment said.
Prestwick’s product has filled that need in other cities. It is similar to market-rate housing, Marx said. When built next to a luxury apartment development, the differences between the two can’t be seen, he said.
“This is for folks who are families who are earning between $30,000 to $70,000. Roughly the rents that they end up paying are somewhere between $750 to just over $1,500,” Marx said.
He said the primary way the Development Authority can support affordable housing is through a bond issuance for a low-income housing tax credit through the Georgia Department of Community Affairs.
“It’s really important to understand that this is not a taxpayer burden. This is not a levy on the city where there will be a sales tax increase or anything like that. It’s simply a pass-through mechanism,” Marx said.
The bond issuance generates a fee for the Development Authority that could be $300,000.
The developer gets the tax credit and that unlocks a lower interest rate to finance the development.
The state wants affordable housing located where there are good schools and lots of good jobs, Marx said, making Sandy Springs a prime spot.
If the Development Authority ever owned a sizable amount of land, it could choose to lease it to a developer, charging a fee it sets to the developer.
The Development Authority could also participate in a sale lease back or bonds for title, which allow for a partial tax abatement over a 10-year period.
“What’s really nice about this is that you all can decide how much affordability you want to see here,” he said.
The city could determine how many units would be affordable for residents earning a specific percentage of the average median income of the community.
Prestwick just closed on a transaction to begin construction of a senior community in Smyrna for people aged 62 and older. The 62-unit development will have a percentage of units for people earning $30,000, other units for people earning approximately $40,000, and 15% rented unrestricted at market rates.
At the recent meeting, Sandy Springs Economic Development Manager Caroline Davis also reviewed successes the Development Authority had in 2021. That included a small business relief assistance program in which $1.6 million was distributed to 158 city businesses.
An audit in August showed 99% of those businesses were still operating, she said. And 72% of the businesses were able to retain employees.
Correction: An earlier version of this story misspelled Caroline Davis’ name. Also, the small business relief assistance program helped 158 businesses, not 148.