Surplus Property Affordable Housing Policy

SMART ALEC CEO Matthew Charles Cardinale and Board Member Sherise Brown outside of a July 2017 Work Session held by the Atlanta City Council to discuss our proposed policy.

One action that cities and counties can, and should, immediately take to meet their affordable housing goals, is to adopt a surplus property affordable housing policy.  This is a low hanging fruit, common sense policy that ought to receive widespread support.

Most, if not all, jurisdictions have an unmet need for affordable housing units, especially at the zero to thirty percent Area Median Income (AMI) income bracket.

Land acquisition is often one of the highest costs faced by cities in developing affordable housing.

Leveraging surplus properties that are already owned by the taxpayers have the benefit of avoiding land acquisition costs.

Therefore, this policy can be an easy and powerful way to create or preserve housing units that reach the level of deep affordability, zero to thirty percent AMI, which might otherwise require deep subsidy; and which is the level of greatest unmet need in most, if not all, jurisdictions.

SMART ALEC worked with the City of Atlanta, Georgia, to draft and consider the Surplus Property Affordable Housing policy that Atlanta adopted in 2017.

Atlanta’s policy, formally entitled the “Affordable Housing Homesteading Program,” is currently codified in Sec. 54-86 of the Code of Ordinances.

SMART ALEC wrote a white paper about surplus property affordable housing policies for City of Atlanta Councilmembers Michael Julian Bond (Post 1-at-large) and Natalyn Archibong (District 5) in 2017 that ultimately led to the adoption of Atlanta’s policy.

This policy laid out a process (a) for determining what public properties are surplus, meaning they are not being used by the city for any other purpose; (b) for determining which properties are feasible for use as affordable housing; and (c) for disposing of the properties through a Request for Proposals.

The legislation establishes a preference for proposals to produce units affordable at zero to thirty percent of the AMI.

Many cities and counties throughout the U.S. have acquired over many years an inventory of real properties that are not being used.  In Atlanta, a spreadsheet of Atlanta’s real property inventory showed that some had been donated to the City of Atlanta in years past, apparently for tax benefit purposes.

One issue that many jurisdictions will have to deal with is state laws that typically require local governments to dispose of real property to the highest monetary bidder.  These state-level policies often contain exceptions.

In Georgia, SMART ALEC relied upon an exception for “homesteading programs,” to help Atlanta craft a policy around single-family, owner-occupied homes.

States that do not have an exception that would support using publicly-owned surplus real properties to support the public benefit that is the creation or preservation of affordable housing, should adopt one.  SMART ALEC recommends an exemption using the language: “creation or preservation of affordable housing.”

States like Georgia that have a limited exception for “homesteading programs” ought to consider a broader exception as stated above, in order to support affordable multi-family rental homes.  Some parcels in a city’s surplus property inventory may be two acres or more and may support the development of affordable rentals.