Failed Condominium Project Paves Way for Workforce Housing in Atlanta

Filed in Affordability by on May 7, 2019 0 Comments

The Lofts at Reynoldstown Crossing in Atlanta emerged from a failed upscale condominium development on the site of the old Triumph Lofts motorcycle parts factory. Located along the Atlanta BeltLine — an ambitious 25-year multimodal transportation, recreation and housing project centered around a 22-mile historic rail corridor — the original project was on its way toward completion in 2008 when a series of setbacks, including economic upheaval generated by the Great Recession, caused it to go unfinished and into receivership. As a result, the units sat vacant for four years.

Atlanta BeltLine, Inc. (ABI) acquired the property in 2011 for $3.7 million. ABI’s goal was to provide housing to those earning under $68,000, or 100% of the area median income. Of the 29 condominiums, 25 were workforce-priced units, three were permanently affordable community land trust units, and the penthouse sold at market rate.

The Atlanta BeltLine is a long-term, comprehensive transportation and economic development effort that is being produced in phases through 2030. Credit: Atlanta BeltLine, Inc.

To retain affordability, the 25 workforce units utilize a mix of equity capture, subsidy recapture and first right of refusal. Under equity capture, if the home is resold within the first five years, a sliding percentage of gain upon resale must be repaid to the Beltline Affordable Housing Trust Fund. Under subsidy recapture, the silent second mortgage must be repaid if the home is sold within the first 15 years. Any repaid funds can be recycled to future home buyers.

“A land acquisition and land banking strategy gives us the best chances of creating longer-term affordability,” stated James Alexander, ABI housing policy and development director.

Funding for the Atlanta BeltLine project came from a combination of federal, state, local and private sources. ABI began construction in October 2011 and completed construction in March 2012 for just under $700,000.

The reclaimed property retained the original development’s upscale features. The spacious two-bedroom, two-bath lofts feature granite countertops, stainless steel appliances and floor-to-ceiling windows. Shared amenities include a fitness center, hot tub, pool, club room and rooftop deck.

The Lofts were offered via a one-day public sales drawing in December 2011, a strategy that generated a high level of interest in the development despite a soft real estate market. More than 2,400 people registered for the event, more than 600 visited, and more than 42 buyers were pre-qualified to participate. The one-day drawing resulted in a nearly instantaneous absorption rate: All 28 homes were placed under contract within a few hours. Within eight months of marketing, 93% of the workforce units closed.

Approximately 3,000 acres of underutilized land along the corridor will become available for public and private redevelopment opportunities. Credit: Atlanta BeltLine Inc.

Approximately 3,000 acres of underutilized land along the Atlanta BeltLine corridor will become available for public and private redevelopment. Launched in 2005, the planning and development for the corridor includes goal of 5,600 affordable housing units by 2030.

Keys to success include:

  • Strategic adaptive reuse that emerged from a failed upscale condominium development
  • Housing and transportation linkages for sustainable development
  • Rapid turnaround from acquisition to closing
  • Pilot for community land trust condominium units
  • Drawing for units that generated quick and successful closings
  • Land banking of 1.4 adjacent acres for future development
  • Providing accessible and affordable financing to workforce buyers

For more housing affordability resources, including the full case study on the Lofts at Reynoldstown Crossing, visit nahb.org/housingforall and the Land Use 101 toolkit at nahb.org/lu101. The toolkit also includes access to the full report, How Did They Do It? Discovering New Opportunities for Affordable Housing.

Deborah L. Myerson, AICP — author of the How Did They Do It? Report — contributed to the content of this article. Myerson is an urban planner with 20 years of experience in housing, community development, land use and transportation policy, and urban revitalization.

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