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Examining Recent Declines in Low-Cost Rental Housing in Atlanta,
Using American Community Survey Data from 2006-2010 to 2009-2013:
Implications for Local Affordable Housing Policy

Dan Immergluck1
October 12, 2015

                                                            
1
Professor, School of City and Regional Planning, Georgia Institute of Technology. Contact at
dan.immergluck@coa.gatech.edu. Kevin Mara provided valuable research assistance in downloading and
assembling the American Community Survey data.

The rapid pace of rental housing construction in the city of Atlanta over the last few years
has been remarkable. Coming out of the worst real estate recession since the Great Depression,
the multifamily housing industry in Atlanta came roaring back over the last several years. This
boom has brought with it significant benefits to the city, especially in terms of revived
construction employment and the promise of stronger property tax revenue for the city, the
county, and the Atlanta Public Schools. At the same time, the nature of this revival is one
dominated almost entirely by high-cost, luxury rental apartments, with essentially no
development of more affordable multifamily rental units. According to Haddow and Company,
which regularly tracks apartment building activity in Atlanta, as of March of this year, there were
over 11,000 apartment units under construction with another 9,000 proposed. The great bulk of
these are luxury units. From 2012 to 2014, according to the CoStar Group, 95 percent of rental
units built in Atlanta were luxury units.2
The huge surge in the construction of luxury rental units occurred in the wake of
thousands of modest-income families having been forced out of their homes during a recordsetting foreclosure crisis. Tens of thousands of families have flooded the rental market as
foreclosures mounted, mortgages got much tougher to obtain, and wages stagnated. The market
has not been producing affordable, decent-quality rental units in the city for those who need them
most, especially in locations near mass transit and jobs, and with access to quality schools. The
foreclosure crisis certainly led to many formerly owner-occupied homes being converted into
rental units, but in many neighborhoods some homes still sit vacant as speculators failed to
convert them to decent rental housing, leaving behind dilapidated or distressed properties.
Moreover, the locations of some of the single-family homes that are available for rent are not
always what some families need in terms of jobs, schools, transportation or other critical
amenities.

                                                            
2

Haddow and Company. 2015. Apartment Market Summary. First Quarter 2015.
http://www.haddowandcompany.com/uploads/5/5/1/3/55135301/intown-atlanta-apartment-marketsummary-1q2015.pdf. Kusto, L. 2015. New Luxury Rental Projects Add to Rent Squeeze. Wall Street
Journal. May 20. http://www.wsj.com/articles/new-luxury-rental-projects-add-to-rent-squeeze1432114203.
 


 

Rents for many of the newly constructed apartments in the City of Atlanta tend to run in
the $2 (or more) per square foot range, with small 600-foot apartments often renting for $1,200
or more and 1,200-foot units more suitable for families frequently renting for over $2,500 per
month or more. Yet, the wages of most low- and moderate-income Atlantans – and even middleincome Atlantans -- have not risen appreciably, and many would welcome the opportunity to
benefit from the positive developments occurring in the city such as the Beltline, the growing
vibrancy of many neighborhoods, and improved transit and other public services.
Those without an understanding of the segmented nature of housing markets may leap to
the conclusion that the increasing supply of luxury units will lower the cost of lower-end units by
increasing the overall supply of rental housing. There is a serious problem with this logic. First,
as the industry follows a herd mentality by chasing the luxury rental market, owners of, and
investors in, lower-cost units may disinvest out of more affordable units, converting them to
upscale, much more expensive units or demolishing them to make way for luxury units or
nonresidential uses. While the increased development of luxury units may have a marginal
negative effect on high-end rents, this activity may actually draw capital away from the more
affordable sector leading to disinvestment and shrinkage of that supply. The two ends of the
market are in-fact segmented from each other, but they compete for land and capital and so the
proliferation of the luxury market may, in fact, result in less on the more affordable end.
Meanwhile, those with modest incomes may be faced with higher rents in the lower-cost
segment of the rental market, or may even try to stretch themselves – perhaps too far - to afford a
small but expensive unit in the luxury market.
In fact, while developers have been aggressively competing over building in the luxury
rental market, the available evidence suggests that the number of affordable, low-cost rental units
has declined in the city. While data on such affordable units is not perfect, we can look at the
federal American Community Survey to examine some information on occupied, low-cost units
to get at least a partial picture of what is going on. Unfortunately, the regular American
Community Survey data do not provide rental unit data disaggregated by both size and rental
rates, so it is difficult to get a complete picture of low-cost units. That is, we can assess how
many rented units in a neighborhood cost less than $1,000 per month, but we do not know – at
least at the neighborhood level -- what portion of these are studio versus three-bedroom

 

apartments, for example. Therefore, these data will not help us identify large apartments that
might be affordable on a per-square-foot or per-room basis. However, we can count the number
of units in a neighborhood, of whatever size, that are rented for less than $750 per month. These
units are what I call “low-cost” rented units. Arguably they are relatively affordable even if they
are studio apartments, although one- or two-bedroom units at this price would be even more
affordable. (A typical studio apartment is typically 500-700 square feet, so $750/month would
relate to about $1.50 per square foot in rent for a studio. Many of these units, however, are likely
to be one-bedroom units.)
Notwithstanding the limitations of the data, examining changes in the number of
occupied units that are rented for less than $750 per month gives us a good sense of the rate of
loss of at least one important segment of the affordable housing stock.3 By “affordable” here, I
do not intend to connote subsidized stock only. Rather, these data include all rented units,
subsidized or unsubsidized, that have low rents. Given the limits of rental market subsidies, the
majority of such units are expected to be unsubsidized.
Table 1 gives changes in the numbers of units rented for less than $750 per month across
two waves of the American Community Survey (ACS). The ACS is conducted annually, but for
small areas like census tracts, the Census Bureau pools five years of data together before
releasing the data; otherwise the sample sizes would be so small as to make the data unusable.
Therefore, I compare the 5-year ACS sample data including the years 2006 to 2010 (called here
the 2006-2010 data) to the 5-year ACS sample including the years 2009 to 2013 (called here the
2009-2013 data). The data, then, measure change over a three-year span (the period ending in
2010 to the period ending in 2013).
                                                            
 
3

 According the standard 30 percent of income threshold for affordability used by the U.S.
Department of Housing and Urban Development’s (HUD) and many others, a rent of $750 per month is
affordable to a household earning $30,000 per year or more. HUD’s estimated median family incomes for
2010 ranged from $50,030 for a one-person household to $71,800 for a four-person family. This means
that $750 is affordable at approximately 42 percent of area median income (AMI) for a family of four but
is affordable at 60 percent of AMI for a one-person household. Since most units below $750 are likely to
be more suitable for singles than for families of four, viewing the $750 per month rent as affordable to
those at an income level of at least 60 percent of AMI threshold is probably the most appropriate. This is
roughly equivalent to the income threshold used in most federal Low-Income Housing Tax Credit
projects.

 

Table 1. Loss of Low‐Cost (<$750/month) Rented Housing Units 
in the City of Atlanta from 2006‐2010 to 2009‐2013* 
 

Census Tract Group

Number of
Units Rented
for Less than
$750/Month
2006-2010

Change in Units
Rented for Less
than $750/Month
2006-2010 to
2009-2013

% Change in Units
Rented for Less
than $750/Month
2006-2010 to 2009- Number
2013
of Tracts

Increase of over 100 units
Increase of 51 to 100 units
Increase of 21 to 50 units
No Subst’l Change +/-20 units
Decline of 21 to 50 units
Decline of 51 to 100 units
Decline of over 100 units

2,604
1,385
2,670
3,649
3,066
7,201
12,119

1,370
523
424
88
-660
-1,849
-4,792

52.6%
37.8%
15.9%
2.4%
-21.5%
-25.7%
-39.5%

Entire City of Atlanta

32,694

-4,896

-15.0%

-1,632

-4.4%

Estimated Annual Loss Rate
 

7
7
13
28
18
26
26

Median
Tract
Poverty
Rate

Median
Tract %
African
American

31.8%
40.2%
12.7%
20.2%
18.3%
24.4%
32.1%

95.1%
69.8%
80.9%
29.2%
52.3%
84.9%
82.6%

*Includes occupied rented units where tenants report paying less than $750 per month in rent.
Source: American Community Survey 5-year Census Tract Estimates for 2006-2010 and 2009-2014. Rented units in both singlefamily and multifamily properties are included.

 
 

Table 1 shows that the number of low-cost rental units declined by 15 percent over a
three-year period, for a total net decline of 4,896 units. At an annualized rate, this equates to a
loss of 4.4 percent per year, or about 1,600 units per year. Again, these are just units rented at
less than $750 per month and are not at all equivalent to the total loss of “affordable units.” The
latter would certainly include many larger units, especially those with two or three bedrooms,
where a rent of $800 or $1,000, for example, is likely to be considered affordable for many
moderate-income families with children. Rather, this estimate measures just one segment of the
affordable rental market.
Figure 1 illustrates the neighborhood distribution of gains and losses in low-cost rented
housing units across the city. Census tracts colored in various shades of pink or red are those
where there was a sizeable (more than 20 units) decline in units rented for less than $750 per
month. White tracts are those where the change was between -20 and +20 units over the three-  

 

Figure 1. Change in Low‐Cost, Rented Housing Units in the City of Atlanta
from 2006‐2010 to 2009‐2013* 

Pitigigiaigia 

MARTA Stations 

Change in Occupied Units Rented for under
$750/month, 2006-2010 to 2009-2013
Loss of 101 to 319 units
Loss of 51 to 100 units
Loss of 21 to 50 units
No Substantial Change: 0 +/- 20 units
Gain of 21 to 50 units
Gain of 51 to 100 units
Gain of 101 to 269 units

*Includes occupied rented units where tenants report paying less than $750 per month in rent.
Source: American Community Survey 5-year Census Tract Estimates for 2006-2010 and 2009-2014. Rented
units in both single-family and multifamily properties are included.
 

 

year period, and those in various shades of green saw increases of more than 20 units over three
years. The categories used in Figure 1 match those used in Table 1. In total, 70 census tracts,
more than half of the tracts in the city, saw a measurable decline in low-cost units, while only 27
tracts saw measurable gains (the remaining tracts saw no measurable gain or loss). More
importantly, only 14 tracts saw gains of more than 50 units, while 52 tracts saw losses of more
than 50 units, with 26 of these experiencing losses of more than 100 units.
It is important to point out that these are net losses or gains at the neighborhood level. In
some neighborhoods, a gain of rental units may have occurred despite some formerly rented lowcost units becoming unoccupied, demolished, or converted to owner-occupancy. Also, these
changes occurred in the wake of the foreclosure crisis, where many single-family homes were
converted from owner-occupied to rental-occupied following foreclosure. Despite this
phenomenon, the overall trend was toward a loss of low-cost rented units in most neighborhoods. 
Table 1 shows that the neighborhoods with the greatest declines and those with the
greatest increases in low-cost rental units tended to have relatively high rates of poverty. This
may reflect two trends. First, in some high-poverty neighborhoods, there was significant
conversion of foreclosed properties to low-cost rentals. In other neighborhoods, however, the
disinvestment in the low-cost rental stock overwhelmed any conversions to rental properties.
This may have been due to gentrification pressures, or to other factors.
Figure 1 shows that the neighborhoods that suffered large declines in low-cost rented
units are located in many different parts of the city, including neighborhoods close to major job
centers, transit corridors, and MARTA stations. 
 

Implications for Local Affordable Housing Policy
This brief analysis examines only one portion of the affordable housing stock in Atlanta,
those units actively rented for less than $750 per month. It therefore captures only a portion of
the likely substantially larger loss in affordable units in the city in recent years. However, it does
demonstrate that this one portion of the affordable stock is shrinking at an appreciable rate,


 

almost 5 percent annually. Meanwhile the supply of luxury units continues to grow without
significant positive spillover on the affordable segment of the market.
To its credit, Invest Atlanta, the City of Atlanta’s development authority, has recently
articulated a set of proposals aimed at addressing the need to rebalance rental housing in the city.
In its extensive “Housing Strategy” document released earlier this year, the agency identified a
wide variety of potential balanced development policies similar to those used by cities that have
experienced similar development pressures, such as Seattle and Washington, DC. Many of these
proposals, including a mandatory inclusionary zoning policy, could prove critical to stemming
and even reversing the decline of affordable housing in the city. Some political leadership in the
city appears intent on moving forward with some of these proposals. In addition to a meaningful
inclusionary zoning ordinance, the city will need to identify a significant source of funds to
provide for the construction and rehabilitation of truly affordable units, especially for those
families earning less than 80 percent of the metropolitan median income. (The needs of those
earning below 50 percent of the metropolitan median are the most acute.) The evidence is clear
that quality affordable housing, especially when linked to good public services such as transit
and education, is a key to economic opportunity and mobility. The time for such investments is
now.