A Unique Funding Program to Keep Homeowners in Hot Neighborhoods in Their Houses

In many ways, Atlanta’s Old Fourth Ward is ground zero for gentrification in the city. A historically Black neighborhood and the birthplace of Martin Luther King Jr., it was neglected for decades. But more recently, it's been a boon for developers and was named one of America’s hottest neighborhoods.

Meanwhile, the Black population has declined, the number of white households has dramatically increased and home prices—now north of $700,000—have nearly tripled since 2013. It’s a story that’s being repeated across the city: Soaring home prices are pushing out long-time residents because they can no longer afford their property taxes. 

“The original people, who’ve been here generation after generation, now we’re priced out,” Rev. Barbara Davis, a resident of the rapidly gentrifying Pittsburgh neighborhood, said at a recent mayoral candidate forum. “We used to have cookouts and barbecues. ... I used to know everybody on every corner on every street, but now I don’t even know 15 homeowners.” 

Atlanta hopes to stop that slide in its tracks with an unusual approach to helping lower-income, long-time homeowners in gentrifying areas stay in their homes. Its new Anti-Displacement Program will give money to “legacy” homeowners in places where property taxes are rapidly rising to help them cover future increases in their property tax bills.

“We think it's important for long-time residents of those areas to benefit from these improvements to their neighborhoods and not be displaced as a result,” said Atlanta’s housing director Joshua Humphries. “These types of tools help residents stay where they are and benefit from the positive changes rather than becoming collateral damage.”

The program is part of a wide-scale effort to improve housing affordability in Atlanta that includes rezoning for more multifamily housing and building more affordable housing units. A few other cities have funds that help pay owners’ rising property tax bills, but Atlanta’s is unique because it uses public funds. Elsewhere, such as in Detroit, those assistance funds have been created through philanthropic efforts. 

Atlanta also has a nonprofit Westside Future Fund created through private donations that, among other things, focuses on tax relief for homeowners in the city’s historic Westside.

But this new program was authorized by Mayor Keisha Lance Bottoms and recently, the city council approved using $10 million from an affordable housing trust fund for legacy homeowner property tax assistance. The housing trust is part of a $33 million community benefits agreement created in 2018 that paved the way for redevelopment of the “Gulch,” a desolate 40-acre site downtown that will be turned into a mini city called Centennial Yards.

Another key difference in approach is that Atlanta’s anti-displacement program doesn’t lower bills for residents (and thus, the city’s property tax revenue). Typical low-income homeowner property tax relief policies focus on lowering or capping property tax bills. Atlanta has those programs as well, and voters also recently passed a measure that would limit annual tax increases for homeowners. 

But the city’s low-income tax relief programs also have age requirements so the relief doesn’t reach everyone who may need it.

Not a Panacea

Atlanta Planning Commissioner Tim Keane called the city’s anti-displacement program a “stop gap” measure that keeps people in their homes without having to rely on a wholesale property tax policy change such as freezing property taxes for certain populations.

“The issue with freezing property taxes is you have to get Fulton County, the school district and the city to agree on a policy because all three taxing districts overlap,” Keane said. “And on top of that you then have to get the state legislature to approve it. It’s just not a plausible scenario in terms of immediate relief.”

But the program faces hurdles. The biggest one is trust. Atlanta’s been around for nearly 200 years, but is still in its relative infancy when it comes to economic development and it hasn’t had a great track record on inclusivity. A 2015 analysis by Governing magazine ranked Atlanta fifth among U.S. cities experiencing the most gentrification, with more than 46% of its census tracts at the time gentrifying. 

Many have cited Atlanta hosting the 1996 Olympics as a major catalyst for economic development and in the early 2000s, the city’s demographics changed dramatically. More whites moved in, and the city’s Black population decreased. Also during the late 1990s and early 2000s, Atlanta demolished nearly all its public housing units, leaving low-income folks with even fewer affordable options where rents and home prices were rapidly increasing. 

City leaders have made promises over the years to long-time residents. When Atlanta converted a former railway corridor into a walking and biking trail in 2012, officials spoke of the affordable housing also playing a key role in the economic development around the corridor. But large-scale affordability never happened.

More recently, Mayor Bottoms and her predecessor, Kasim Reed, have made legacy homeowners more of a policy priority. In fact, Reed pushed for and championed the creation of the Westside Future Fund’s property tax relief program back in 2017. 

That program’s experience is telling when it comes to the challenges the city has in educating homeowners about the assistance now available: Fewer than half of the eligible residents in the roughly 2 square miles covered by the WFF’s efforts signed up to get property tax bill help.

“There was a lot of skepticism around taxes…and concern from residents that you’re not who you say you are,” John Ahmann, WFF’s president and CEO, said of the challenges of getting people to apply for tax relief. “We’re still working on it.”