Thursday, June 4, 2009

Atlanta To Tear Down Public Housing - Why This Could Spell Doom For Local Communities, Why You Should Take Heed

In 2008, the Department of Housing and Urban Development or HUD gave the city of Atlanta Georgia approval to tear down its last four major housing projects. For those of you who didn’t know, Atlanta was the first city in the nation to create public housing during the Great Depression.

Today, Atlanta stands on the precipice of being the first to have eliminated all of its large public housing projects by 2010. Back in 2008, Renee Lewis Glover, Atlanta Housing Authority’s (AHA) Executive Director said, “These approvals mean the end of the 73 years of housing projects in Atlanta. We have become the first major city in the nation to completely eradicate these areas of government-sponsored concentrated poverty, crime and low educational achievement." Question is: where will all the poor, crime-ridden, under achievers go? According to the AHA, “AHA will utilize Responsible Relocation in coordination with Atlanta Public Schools and other community stakeholders.” Short answer: your community! I believe, if not closely scrutinized by the communities involved, this could threaten home values more than the foreclosure crisis.

What I found most odd was the lack of specifics of what the AHA meant by “Responsible Relocation.” By that, I mean just where does the AHA plan on relocating former public housing residents? I’m sure by now they have a good idea—and I have some of my own.

I think several factors have come together that make this a big win for the cities and developers and a big lose for you. Right now, Atlanta, Sandy springs, and Marietta Georgia rank third in the nation for average rental and home ownership vacancies according to and the U.S. Census Bureau. What are cities to do with all those houses, even when the market improves? After all, these cities are not land locked and builders will continue to build, because that’s how they make their living. And you are all too familiar with the federal intervention in bailing out the banking and housing industries. Right now, the federal government owns a major portion of the banks and thousands of home mortgages—some of which are being foreclosed on today. And, HUD has always had an expansionist agenda and has been toying with the idea of locating public housing tenants in residential communities for years-- “just give them a house and they’ll make it a home.” And did I mention that the properties being torn down in Atlanta are right next to downtown and represent a real gold mine. That’s pretty much the case in most major cities.

I believe these pressures—large indigent populations, too much housing stock, federal government intervention (indeed ownership of private sector properties), developer interest in extremely valuable land located in or near major cities, and HUD expansionism could mean that the indigent might be moving to a house near you. This could spell doom for your property, your wealth and community. Why, because it's human nature not to care about anything you didn't pay for.