Housing Affordability in Metro Atlanta: Yeah, It’s Big Deal And as you can see here, the South Atlantic region – Virginia, the Carolinas, Georgia and Florida – is expected to add more people than any other region in the nation over the next 25 years or so. This should bode well for our economic future. Still, there are plenty of opportunities for us to make sure metro Atlanta not only participates in this growth, but becomes the place to be for the next generation of creative workers.

How We Are Thinking About Housing Regionally… Key Goals Preserve Affordable Supply Reduce Housing and Transportation Costs Promote Housing Stability Develop Leadership on Affordability Increase Supply Expand Capital Resources Building Permits % Units With Subsidy Home Prices/Cost Burden Overall Cost of Construction Evictions Surveys? Total Residential Addresses % Units With Subsidy Expiring in 5 years Median Rents/Cost Burden Building Permits Negative Equity ??? Home Prices Change in Units with Rents <$800/Month Housing +Transportation Costs Overall Amount of Home Purchase Loans Home Ownership Rates New Rents vs. Median Rents Housing Costs in Areas of Older Stock Price Increases Near Job Centers ??? Long-Term Vacancies Key Indicators

Increase Supply What this is measuring: This will measure the overall supply of new housing being introduced to the market, including market-rate homes, mid-market homes, as well as units affordable to a range of incomes. Here we are talking about both ownership and rental. Why this is important: The overall supply of houses, both renter- and owner-occupied, has dropped recently. Building permit activity is considerably lower than it was pre –recession, inventory of homes for sale has dropped over the past three years, and the region has lost affordable rental units (those renting at less than $800/month) over the past five years. Key issues: Decrease in building permit activity Decline in for-sale inventory Loss of affordable rental units Note: We need to increase supply, PERIOD! Whether this takes the form of reduced regulations, reduced parking requirements, streamlined permitting process, reducing “carrying costs” to developers, establishment of housing trusts, innovative financing to better leverage 4 percent LIHTCs, increasing overall supply, especially affordable supply, will be critical

Increase Supply Units Authorized by Building Permits Still Lower Than Long-Term Average Source: SOCDS

Number and Share of Affordable Units Have Declined over Last Few Years Increase Supply Number and Share of Affordable Units Have Declined over Last Few Years   Estimate; Total Rental Units, 2016 Units: Rent <$800, 2016 Estimate; Total Rental Units, 2011 Units: Rent <$800, 2011 Change: Total Rentals Change: Rentals <$800 Cherokee 18,283 3,918 15,235 4,083 3,048 (165) Clayton 44,189 15,281 35,154 13,292 9,035 1,989 Cobb 98,257 16,778 81,282 19,248 16,975 (2,470) DeKalb 124,749 27,120 110,782 32,260 13,967 (5,140) Douglas 16,306 3,848 12,909 4,188 3,397 (340) Fayette 7,517 1,000 5,860 1,003 1,657 (3) Fulton 187,822 44,943 161,921 50,176 25,901 (5,233) Gwinnett 94,633 14,277 76,292 17,048 18,341 (2,771) Henry 19,478 2,752 14,804 2,048 4,674 704 Rockdale 9,631 2,578 8,571 2,159 1,060 419 Total, ARC10 620,865 132,495 522,810 145,505 98,055 (13,010) Percent of Units renting for less than $800/Month 21.3% 27.8% Source: American Community Survey, 2007-2011 & 2012-2016

Inventory of For-Sale Homes Declining, Although Ticking Up Recently Increase Supply Inventory of For-Sale Homes Declining, Although Ticking Up Recently . Source: Zillow, not seasonally adjusted, count of homes sales. Rockdale not included due to lack of data

Preserve Affordable Supply What this is measuring: Many publicly-subsidized units have expiration dates, so tracking the number of units with subsidies expiring in the next five years is important to affordable housing advocates. Also, older rental units – those in the year 2000 or earlier– usually are more affordable than newly-constructed units. This section is primarily focused on rental units. Why this is important: When public subsidies expire, or when older multi-family stock is razed, often this once-affordable stock is replaced by market rate stock, particularly in gentrifying neighborhoods. Further, often older multi-family stock is replaced by fewer, more expensive single-family units. Key issues: Expiring public subsidies Tracking “naturally occurring affordable housing” Loss of affordable rental units (see previous section) Things like “right of first refusal”, which may give “mission-oriented” buyers an exclusive period to buy these naturally-ocurring affordable housing properties before their subsidies expire, or could be some sort of programs that include low-cost rehabbing of these older properties. We also need just a lot more money in the forms of subsidies for the lowest income households.

Preserve Affordable Supply Only a Small Percentage of Subsidized Units Are Set to Lose Subsidy in Next Five Years   Number of Subsidized Units Units with Subsidies expiring in this 5 year period (by 2022) Units with Subsidies expiring next 5 year period (2023-2027) Units with Subsidies expiring after 10 years (2028+) Cherokee 2,998 349 314 2,335 Clayton 4,679 640 1,051 2,988 Cobb 6,764 685 1,411 4,668 Dekalb 15,072 814 2,740 11,518 Douglas 876 104 100 672 Fayette 589 360 229 Fulton 40,901 4,014 7,624 29,263 Gwinnett 4,994 246 435 4,313 Henry 1,266 570 696 Rockdale 578 180 398 ARC 10 78,717 6,852 14,785 57,080 (All Housing Units, 2017 estimate) 1,802,026 % of subsidized units 4.37% Source: National Housing Preservation Database, accessed June 20, 2018

Preserve Affordable Supply “Affordable “ Inventory By Year Built Rents Significantly Higher for Newer Units; Vast Majority of Units Renting For Less than $1,000 Were Built in 2000 in Earlier (thus under threat) “Affordable “ Inventory By Year Built   All Units Units Built before 2000 % Units built before 2000 Units Renting for $800 or less 117,997 105,402 89.3% Units Renting for $1,000 or less 266,750 223,858 83.9% Source: Co-star

Reduce Housing Costs What this is measuring: While this is obviously related to the other sections, the measurement concept is simple – we need to reduce the cost for all housing, regardless of location, for both rented and owned units. Why this is important: Affordability challenges are certainly exacerbated near job centers and other “areas of opportunity (i.e. near amenities, near good schools, near quality child care, etc), but we also need to ensure that housing costs are reduced throughout the region, regardless of location. Key issues: Reducing overall cost burden for both renters and owners Tracking housing + transportation costs Rents growing faster than wages Tracking rents and home prices near employment centers These could include things like encouraging new housing in job-rich areas that can then reduce transportation costs, potentially even creating some pooled resources regionally – these can be philanthropic dollars – to provide the gap financing necessary to develop/preserve affordable housing in resource-rich areas.

Reduce Housing Costs One in Three Owners (with a mortgage) Are Cost-Burdened; But Long-Term Trend Shows Declining Percentages of Owner Cost-Burden ARC 10 Avg: -3.4% Source: American Community Survey, 2012-2016, U.S Census 2000

Reduce Housing Costs Half of Renters Are Cost-Burdened, However Long-Term Trend Shows Significant Increases in Percentages of Owner Cost-Burden ARC 10 Avg: 51.1% ARC 10 Avg: +14.2% Source: American Community Survey, 2012-2016, U.S Census 2000

Reduce Housing Costs For a “Typical Household” (making the average income in metro Atlanta) to Relocate into the Atlanta Region, That Family Would Have to Pay More Than 50% of Their Income in Half of the Region’s Neighborhoods. The Picture is Worse for Households Making 80% of the Area Median Income ARC 10 Avg: 77.4% ARC 10 Avg: 48.9%

Rent Growth Far Outpacing Wage Growth Since 2011 Reduce Housing Costs Rent Growth Far Outpacing Wage Growth Since 2011

Reduce Housing Costs Transportation Costs Added To Housing Costs Complicates The Affordability Picture CNT – “Losing Ground” Housing Opportunity Index, NAHB

Rent Significantly Higher Inside the Region’s Major Employment Centers Reduce Housing Costs Rent Significantly Higher Inside the Region’s Major Employment Centers

Expand Capital Resources What this is measuring: There is not a great way to measure this directly other than looking at the levels of overall investment in residential and the cost of housing and construction. Here we are talking about both ownership and rental. Why this is important: To craft effective affordable strategies, smaller developers and non-profit developers need resources and public subsidies need to be expanded or matched. Key issues: Amount of loans for home purchases invested by banks Overall cost of construction Development of social impact funds that can provide an ROI – albeit lower, typically – to provide a pool of resources.

Expand Capital Resources Banks Have Loaned More For Home Purchases Over the Past Two Years, And Encouraging Sign of the Overall Housing Market…   Number of Home Purchase Loans(1), 2017 Total amount of home purchase loans, 2017 (000s) Cherokee 5,398 $ 1,343,024 Clayton 2,281 $ 326,812 Cobb 11,947 $ 3,145,688 DeKalb 9,221 $ 2,529,905 Douglas 1,960 $ 359,385 Fayette 1,850 $ 529,053 Fulton 15,038 $ 4,906,586 Gwinnett 13,560 $ 3,105,208 Henry 3,926 $ 778,993 Rockdale 1,073 $ 198,877 10-County ARC 66,254 $ 17,223,531   Change in number of loans originated, 2015-2017 Change in total amount of loans originated (000s), 2015-2017 Cherokee 646 $ 276,577 Clayton 791 $ 131,745 Cobb 1,430 $ 526,047 DeKalb 1,433 $ 447,852 Douglas 628 $ 140,276 Fayette 164 $ 75,392 Fulton 1,548 $ 619,375 Gwinnett 2,085 $ 730,366 Henry 1,115 $ 254,724 Rockdale 353 $ 78,603 10-County ARC 10,193 $ 3,280,957 Source: American Community Survey, 2012-2016, U.S Census 2000

Cost of Construction (Value per Unit Authorized by Building Permit) Expand Capital Resources …But How Much of That Is Due To Increasing Costs of Construction?   2013 2016 Change, 2013-2016 Cost of Construction (Value per Unit Authorized by Building Permit) $ 155,960.73 $ 184,944.36 $ 28,983.63 Source: American Community Survey, 2012-2016, U.S Census 2000

Promote Housing Stability What this is measuring: This is measuring a family or individual’s ability to comfortably stay where they are currently living. Why this is important: This of course is related to other goals, but promoting housing stability is focused on ensuring that current residents can stay in their homes longer, either by avoiding evictions or displacement that comes with big reinvestment programs. Here we are talking about both ownership and rental. Key issues: Evictions Negative Equity Home Ownership Long-Term Vacancies There are lots of things other states are doing in protecting renter rights, and we do have a very active legal aid/assistance presence here, and it could also be as simple as just promoting “no-frills” rehabs to ensure a baseline level of quality for older properties.

Rate of Eviction Filings have Fallen Over the Past Two Years Promote Housing Stability Rate of Eviction Filings have Fallen Over the Past Two Years Source: Eviction Lab

Promote Housing Stability Every Jurisdiction’s Negative Equity Rate Has Fallen Since 2014, But 10% of the Region’s Homes Are Still Underwater   Negative Equity Percent of Homes w/Mortgage Cherokee 4.5% Clayton 29.4% Cobb 7.5% Dekalb 12.8% Douglas 10.5% Fayette 8.7% Fulton 12.2% Gwinnett 6.0% Henry 11.0% Rockdale 14.2% ARC 10 10.4% Source: Zillow

Promote Housing Stability Almost 68 percent of the Region’s Occupied Housing Units Are Owned, But that Is Down Almost Three Percentage Points Since The Great Recession County Total Units, 2016 Total Owner-Occupied, 2016 Total Renter-Occupied, 2016 % Owner, 2016 % Renter, 2016 Cherokee 80,378 62,095 18,283 77.3% 22.7% Clayton 90,182 45,993 44,189 51.0% 49.0% Cobb 271,975 173,718 98,257 63.9% 36.1% Dekalb 270,903 146,154 124,749 54.0% 46.0% Douglas 47,534 31,228 16,306 65.7% 34.3% Fayette 38,933 31,416 7,517 80.7% 19.3% Fulton 385,103 197,281 187,822 51.2% 48.8% Gwinnett 278,996 184,363 94,633 66.1% 33.9% Henry 71,000 51,522 19,478 72.6% 27.4% Rockdale 29,940 20,309 9,631 67.8% 32.2% ARC 10 1,564,944 944,079 620,865 Source: Zillow

Promote Housing Stability Long-Term Vacancies Have Declined since 2015, an indicator of a healthier, stable housing market County % long-term vacancy (1+ Yrs), Q1 2018 Cherokee 1.1% Clayton 3.0% Cobb 1.2% Dekalb 1.8% Douglas 2.1% Fayette 1.4% Fulton 2.6% Gwinnett 0.9% Henry Rockdale ARC 10 Source: Zillow