Opinion - Sky's the limit for Atlanta rents
Ponce City Market leases are just a sampling
For years we've watched as City Hall East has been gutted, renovated, and slowly reborn as Ponce City Market, the 1.1-million-square-foot mixed-use playground. We wondered along with the rest of Atlanta what it might be like to live along the Atlanta Beltline, in the middle of revitalization, on one of the city's most vibrant streets.
Last week, the Flats at Ponce City Market, the complex's residential component, released its leasing rates: $1,225 and up a month for a 575-square-foot studio; $3,395 a month for a three-bedroom measuring 1,790 square feet. The rent is high. Realllllly high, particularly to us hoi polloi accustomed to paying $700 for a studio in the heart of the city.
There will be some PCM units deemed "affordable." A building spokeswoman tells us that 20 percent of the 259 units will start at the low, low rate of $998.
PCM's prices aren't the most expensive in Atlanta — a two-bedroom at the Four Seasons Hotel in Midtown is listed on Trulia for $7,500 a month — but they are indicative of the direction the city's headed. A tech professional priced out of Silicon Valley or New York would giggle with glee over the idea of living with such amenities at such a relatively low price. But for many of us Atlantans who've lived here more than five minutes, the rates were a wake-up call.
Northeast Atlanta neighborhoods near PCM and along the Beltline, including Poncey-Highland, Virginia-Highland, and Midtown, have been riding a heady wave of excitement for years because of the development. Some of those neighborhoods even longer as more and more people have moved into Atlanta's urban core. And considering the initiatives that are under way — the Beltline, the streetcar, more bike lanes, new businesses, a vibrant arts scene — more will come.
But Atlanta, ranked No. 1 in the country when it comes to income inequality, is a weird market. Investors, some of whom had millions of dollars in funding, are sitting on properties in some neighborhoods after buying them up cheap during the Great Recession. The city has a shortage of medium- and high-density housing, especially along the Beltline. On top of that, developers who grew fallow during the economic downturn are building once again and, in their stupor, foolishly thinking some of the tripe they're erecting is worth a premium. Young people, many of whom can't afford to buy a house, are opting to rent.
Maybe what we're seeing is inflation. But left unchecked, this environment could create a frightening affordability crisis where, years down the line, Atlanta is only a place for the well to do. That's how affordability crunches happen — developments get rolled out, the city's population grows — and boom — you're suddenly pushed out by property taxes and house-hunting in Riverdale.
Atlanta Beltline Inc., the nonprofit that oversees the planning and development of the smart-growth project, is crafting a more aggressive approach to affordable housing. The project is expected to create 5,600 units over the 25-year lifespan of its funding source. But subsidies that are currently keeping 1,500 units within a half-mile of the project affordable are set to expire in the next 10 years.
Mayor Kasim Reed said last week that he doesn't want to see Atlanta suffer the same fate as San Francisco or New York, cities where longtime residents and the lower and middle classes have been priced out by a new wave of prosperity. He thinks the city has "very nice hedges" against suffering the same fate, considering the more than 500 acres of land controlled by the public. That includes Fort McPherson, the former U.S. army base in southwest Atlanta, and whatever will become of Turner Field if the Atlanta Braves leave in 2017.
"I've been thinking about it a lot," Reed said. "I'm watching what's happening — not that we're them — in San Francisco, New York, and London. We have an opportunity to really kind of avoid a good bit of that."
It's going to take more than affordable units here and there suggested without any real vision to avoid an affordability disaster. Atlanta can be a national leader when it comes to making sure the rich and poor, the CEO and the teacher, the lawyer and the artist, have a place in the city. America doesn't need another bougie New York or San Francisco, cities that have almost become caricatures of themselves. It's still early enough in Atlanta's renaissance and resurgence that we can avoid at least some of that.
Many, if not all, of the affordable housing programs used in Atlanta and other cities sunset after a set period of time and revert to market rate rents. The Atlanta Beltline Partnership, the project's fundraising arm, is leading the development of land trusts, which could help achieve the goal of long-term affordable housing. Or the city could revive the touchy debate of inclusionary zoning, something that would require developers to set aside a certain percentage of their units as "affordable" — a term that needs to be more clearly defined.
Atlanta's urban renaissance will be a failure if it pushes out the men, women, and families who have stayed and made the city a place where people would even consider spending more than $1,200 for 500 square feet, even if it is along the Beltline.