Atlanta’s DomestiCITY Wants to Make Affordable Housing Attractive for Tenants & Investors

June 19, 2018

For a century, low-income urban housing projects in the United States have shared a common aesthetic: imposing, characterless high-rise buildings with little sense of place or personality.

That’s because urban planners have been almost entirely focused on economics and replicability as they stripped away any non-essential components, which led to boring cookie-cutter designs.

The City of Atlanta is trying to change that.

City leaders started an affordable housing design competition called domestiCITY that prioritized innovation, sustainability and a sense of community. It’s the first low-income housing design competition in the Southeast.

The contest drew 189 participants from more than 15 countries who submitted more than 20 unique designs to remake two parcels that together create a 7.1-acre site on Metropolitan Parkway in Atlanta’s south side near Hartsfield-Jackson Atlanta International Airport.

The site includes a 147-unit transitional housing development called Santa Fe Villas and an adjacent property with the abandoned Town & Country Hotel Courts.

Dating to the 1940s, the hotel was once a vibrant attraction for road-tripping families after World War II. It fell into decay and then became a hotbed of prostitution and drugs in the 1980s and 1990s before it was shuttered. The distinctive green mid-century sign that was once lit with neon to woo motorists still stands as a rusty reminder of days gone by.

The site is within a newly created federal Opportunity Zone program created by President Donald Trump’s tax reform law that offers big savings on capital gains taxes for investors who are willing to lock up money in economically depressed areas for at least five years.

Key considerations in the contest were keeping the project cash flow positive to attract investors for 30 years while also keeping rents affordable for low- and moderate-income residents. The designs must also be repeatable in other areas, and scalable for larger sites.

Submissions included clever ideas for sleek multi-family apartments with staggered balconies that give the unit below a covered outdoor living space; solar panels and rooftop plants to lower energy consumption; office and co-working space; community gathering and event space; and vibrant colors that serve as a visual cue for new energy and momentum – features commonly used in premium housing aimed at the wealthy.

“This is but the first of an endless campaign by the Department of City Planning to engage the private sector on creative ideas for affordable housing,” Tim Keane, Commissioner of the Department of City Planning for Atlanta, said in a statement released by the mayor’s office. “It’s time that we approach affordable housing with beautiful design in mind.”

Contest finalists Utile Inc. from Boston and Atlanta-based Lord Aeck Sargent were awarded $30,000 to further develop their plans. You can see their designs here and here.

Submissions were on exhibit at the Museum of Design Atlanta (MODA) this spring, and were also shown at Atlanta City Hall.

Enterprise Community Partners and Assist Inc. Community Design Center provided technical support for the project.

Once a Pioneer in Affordable Housing

Although Atlanta was home to the nation’s first federally funded public housing project — Techwood Homes, which was built in the 1930s and has long since been demolished — the city now lags other large metro areas amid America’s growing affordable housing shortage.

There are only 46 adequate affordable rental units available for every 100 extremely low income (ELI) households in Fulton County, according to the Urban Institute, a Washington-based think tank focusing on economic and social policy. Fulton is the most populous county in the state and covers much of the core around the city of Atlanta.

In nearby Gwinnett County, the second-largest by population, the number of affordable rental units drops to 14 per 100 ELI households.

During her campaign, newly elected Atlanta Mayor Keisha Lance Bottoms announced a $1 billion public-private Affordable Housing Initiative to make Atlanta more affordable and to slow gentrification that is making it harder for low-income residents to stay in their homes.

“How do you eat an elephant? One bite at a time,” Bottoms said at a March press conference highlighting new affordable housing programs.

Sustainable & Replicable

Lord Aeck Sargent’s design is modular, economical and could be replicated at other sites. The team held multiple design charrettes, pin-ups and iterations of initial ideas before settling on a design that reflected community needs and market dynamics, the firm wrote in a blog post about the project.

A defining feature is the use of cross-laminated timber (CLT), a versatile, eco-friendly product that also creates local jobs for Georgia’s lumber industry and takes advantage of plentiful resources in the region. CLT also lowers the cost.

The proposal includes eco-friendly features such as replacing asphalt, which retains heat in the summer, with permeable walkable surfaces; installing rooftop solar panels and a 1.7 million-gallon rainwater cistern that can be used for irrigation for community gardening and landscaping. The plan includes 60,000 square feet of open space and semi-public communal courtyards.

Boston-based Utile proposes replacing the existing single-room occupancy (SRO) with housing that offers amenities and sense of ownership associated with single-family dwellings. Two-story units open to “front yards” that double as private parking or semi-public open space.

Each modular unit is designed with scalability in mind and the layout is centered around the bathroom, which stacks and connects to the bathrooms above and below to reduce costly plumbing and create a solid core. Units can be constructed off-site in two halves that fit on a truck bed. When both halves arrive, they can be lifted into place, then secured to each other and a pre-built structure.

The proposals by the finalist teams show the power of innovative thinking in the face of constrained budgets and a compact site, says Keane of Atlanta’s Department of City Planning.

“The finalists selected are a representation of just how visionary affordable housing should be,” he said.

Capital Gains Tax Savings

Investors looking to lower their tax bills could benefit from taking a look at the proposals for the domestiCITY contest site.

Trump’s tax reform law included a program that designates Opportunity Zones in economically distressed communities, which generally means a poverty rate of 20 percent or higher.

Investors who have capital gains can roll that money into an Opportunity Fund that invests in projects such as multi-family housing developments in an approved Opportunity Zone.

If investors keep their money in the fund for at least five years, they get an effective 10 percent reduction in tax owed on the rolled-over capital gains. Investments held for at least seven years get a 15 percent reduction.

To get the maximum benefit, investors must keep money in the fund for at least 10 years. Doing so avoids capital gains taxes on the additional return from the Opportunity Fund investment, the original capital gains tax on money rolled into the fund in the first place must still be paid.

An initial investment of $100 million could be worth an estimated $126 million after seven years and $176 million after a decade, according to the Economic Innovation Group, which helped shape the Opportunity Zone language in Trump’s tax reform law.

All of the 260 areas in Georgia that were nominated by Gov. Nathan Deal were approved for Opportunity Zone status earlier this year. To download an Excel list of approved zones sorted by state, click on the third blue link on this page of the U.S. Treasury Department’s website.

In Summary

The City of Atlanta is trying to overhaul the approach and mindset toward affordable housing design with a domestiCITY contest that is attracting the best and brightest ideas for attractive features on tight budgets.

Finalists Lord Aeck Sargent and Utile have won $30,000 each to continue developing their ideas, which included modular components to compress budgets and eco-friendly features such as solar tiles and planted roofs in addition to community-building features such as courtyards and co-working spaces.

Atlanta’s first site for the domestiCITY contest is just north of Hartsfield-Jackson airport in a newly created Opportunity Zone that was part of Trump’s tax reform law, which offers big savings on capital gains taxes for investors willing to make long-term investments in low-income communities.