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Welcome to the Sunbust

Could This Be the End of Sprawl in Atlanta?

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Illustration by Eleanor Grosch

Published on Jun 4, 2012

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On March 17, 2011, more than 120,000 Atlantans vanished.

Gone. Disappeared. As if they never existed. And in some ways, you could argue, a lot of them probably never did.

Between 2000 and 2010, Atlantans prided themselves on the assumption, fueled by annual estimates by the U.S. Census Bureau, that the Georgia capital boasted more than 500,000 residents. The cradle of the civil rights movement — which, like many American cities, watched its population drop during white flight — was in the middle of an urban renaissance like many other cities across the nation.

Young singles were moving into the high-rise condos along Peachtree Street in Midtown and warehouse lofts in arts districts. Families were tending gardens in gentrifying neighborhoods such as Reynoldstown and Old Fourth Ward, the historic community where Martin Luther King Jr. grew up and later preached. Homes in southwest Atlanta — especially along the Atlanta Beltline, an ambitious $2.8 billion project, now under construction, that envisions transforming 22 miles of old railroad tracks circling the city into a loop of parks, trails and transit — could be purchased for a steal.

Then came the mortgage meltdown. Residential skyscrapers built in anticipation of the influx of new residents were barely occupied. One of the newest office towers in Buckhead was completely empty. Entire streets in the historic Vine City and neighboring English Avenue neighborhoods were, and still are, lined with boarded-up homes.

When census results were released last year, Atlantans were dumbfounded. According to the official population count, 420,003 men, women and children called the city home — a net gain of merely 3,529 people in a decade, or less than 1 percent. Elected officials, who pine for continued growth to help argue for federal funding, political clout and bragging rights among peer cities, and researchers, who fill their hours poring over the data, scratched their heads. One demographer for Fulton County, which encompasses nearly all of Atlanta, called the numbers “shockingly low.”

Jeannie Mills has lived in southwest Atlanta since its last boom era, in the 1940s. Her Adair Park neighborhood, a quaint community of one-story historic bungalows in predominantly African-American southwest Atlanta, borders the Beltline. The proximity to the city’s largest single economic development project made her neighborhood hot. For a while.

“Before the housing bubble burst, property was selling at a severely inflated rate,” she says one Saturday afternoon, opera music filling her 1923 bungalow. “Mix in with that a severe flip and fraud system. For two-and-a-half years, this ZIP code was no. 1 in the country for mortgage fraud. These are not tabloid headlines. These are the facts.”

She takes a sip of green tea: “And then it all hit the fan.”

Slow Down, You Grew Too Fast

Atlanta’s case was extreme — in fact, the city is still debating whether to dispute the census count — but it was representative of a larger pattern among most southeastern U.S. states, one of the hottest parts of the so-called Sun Belt, the unofficial geographic region stretching from California to Florida. After years and years of enjoying the largest growth in the country (made possible, in part, by an insatiable appetite for homebuilding that stretched out in the fringe suburbs), the party was over.

“The mortgage meltdown [and] the Great Recession tended to really hit the cities that were growing the fastest in the middle of the decade.” says William Frey, a noted Brookings Institution demographer who plucks cultural shifts and trends from reams of population data.

“When Brookings did the math, the Washington think tank found that six of the 20 metro regions in the nation having the hardest time rebounding from the recession are in the southeast.”

The economic downturn’s effects are visible in nearly every once-hot metro region in the Southeast — particularly Georgia and Florida. In fact, by June of last year, 17 of the nation’s top 25 metros with the highest foreclosure rates were in the Sunshine State. In the Orlando region, home of Walt Disney, the rate stood just over 15 percent, while in Florida’s other metro regions, the percentage underwater hovered between 45 and 63 percent. Comparatively, metro Atlanta is doing better. But not by much. As many as 37 percent of all mortgages in the 28-county, 5.3-million person region — the ninth-largest metropolitan statistical area in the nation — were underwater in October of 2011. When Brookings did the math, the Washington think tank found that six of the 20 metro regions in the nation having the hardest time rebounding from the recession are in the southeast.

Drive through the suburbs ringing Atlanta, and that tough rebound is hard to miss. PVC farms — incomplete subdivisions slowly being reclaimed by nature — cover acres of once sought-after real estate. In 2008, the Greater Atlanta Homebuilders Association offered help finding counseling for its members who, after years of ample opportunities, were looking for work. U-Haul announced last year that Atlanta had fallen from the top spot on its 2007 list of destination cities to number six. Federal regulators have taken over more than 70 Georgia banks, many of which specialized in loans to developers, since the housing market tanked — topping Florida as the state with the largest number of bank failures.

Unsettling to many metro leaders is the fact that the bust can’t be blamed solely on the churn of a global financial tide. Rather, the bust revealed a fundamental weakness in the Sun Belt’s economy. For years, the region had depended on growth to be an engine of growth. That meant that when people stopped moving and stopped being able to access deep reservoirs of credit to finance these moves — and the bigger homes that often came along with them — the jig was up. All of a sudden, the numbers couldn’t lie. According to an October 2011 study by the Carsey Institute at the University of New Hampshire of years of census data, the steady flow of residents into the Sun Belt states including Florida and Georgia from New York, Massachusetts and other northern states slowed to its lowest rates since the 1940s. Metro Atlanta, the third most popular destination for millenials between 2005 and 2007, fell to no. 23 from 2008 to 2010. And in a blow to urbanists, much of the growth happened in the region’s fringe, with the suburban counties of Forsyth, Carroll and Henry growing by a respective 79 percent, 74 percent and 71 percent.

“People can’t get loans and they can’t get mortgages,” Frey says. “So they can’t buy new homes and people can’t sell homes. People are staying put.”

But for many urban thinkers, the slowdown has an upside, though it offers little solace to the people trapped in zombie subdivisions or surrounded by boarded-up homes: Once-bustling metro areas might now have the breathing room to focus on and encourage more responsible, smart development in urban areas, which could curb and possibly retrofit sprawl.

“All indications are that the upcoming housing market, for example, will seek walkable neighborhoods to a much greater degree than their predecessors,” says Kaid Benfield, the director of sustainable communities at the Natural Resources Defense Council and co-founder of Smart Growth America. The communities that adjust to the desire for such walkable neighborhoods “sooner than later will be the ones best positioned for success when the market fully recovers,” Benfield says.

Opportunity

LaShawn Hoffman has a simple yet daunting dream for Atlanta’s Pittsburgh neighborhood, a walkable, historic community less than two miles south of downtown and a few blocks from the Beltline. And which, thanks to the flippers and mortgage fraudsters who wreaked havoc on southwest Atlanta during the mid-2000s, is 43 percent vacant. Since the housing market crashed, street after street is lined with empty, boarded-up houses, which have become magnets for crime and a drain on longtime residents’ morale.

In 2006, Hoffman, the executive director of the Pittsburgh Community Improvement Association, partnered with non-profit builder Sustainable Neighborhood Development Strategies and the Annie E. Casey Foundation to create a plan for reinventing the struggling neighborhood as a gateway to the Beltline. The idea? That the economic activity generated by the lush new attraction could trigger even more economic activity, and smart growth, in Pittsburgh, particularly on its main commercial drag. As a first step towards this vision, the foundation purchased 31 acres of vacant industrial land hugging the Beltline and helped the Pittsburgh non-profit establish a land trust in the surrounding residential neighborhood. Since 2006, the team has used federal and city funds to purchase and rehab 31 foreclosed homes that will be part of the Pittsburgh land trust. The ultimate goal is approximately 300 homes.

Under the land trust model, a non-profit corporation overseen by neighborhood residents and businesses leases property to a homeowner, who owns the home on the property. The property could serve any mix of uses and, once transit is built, become a key stop along the project. Overgrown, vacant lots on adjacent streets could, until the neighborhood is ready for responsible infill development, boast community gardens or pocket parks.

“It’s going to help to build more pride,” Hoffman says. “Pittsburgh is a place where people have said this is their home. It’s a cherished place to many. Just think about more people walking and patronizing locally based businesses.”

“I think that’s a great economic development strategy. It’s that ripple effect.”

Proponents say the block-by-block strategy could stabilize the neighborhood and ensure permanent affordability. The effort, Hoffman says, would never have gotten as far as it has without the crash in the market. In his view, the downturn made the property affordable enough to be bought by an investor who didn’t need to make an immediate profit and instead could create a product that benefits the community.

If You Fund It, They (May) Come

Still uncertain is how the collapse will affect the project the neighborhood’s revival hinges on: The Beltline. Eight years after the Trust for Public Land and urban planner Alexander Garvin fine-tuned Georgia Tech grad student Ryan Gravel’s thesis and created an outline for the 33-mile park, trail and transit network, 11 miles of trailways and three parks totaling 30 acres are open to the public.

Yet much of the $2.8 billion mixed-use, light-rail and park project’s continued progress hinges on adjacent housing and commercial development. The project’s main funding source, a tax allocation district, depends on increases in property values surrounding the Beltline. The district has raised $120 million in its first five years of operation, according to the public-private partnership that oversees it, Atlanta Beltline Inc., but a far higher return is needed in order for the project to be self-sustaining. Indeed, when the funding mechanism was first pitched to the city in 2002, everyone thought property values would perpetually rise. That is no longer certain. Given that, project officials have aggressively pursued public funding as well as private grants to help provide additional cash during the downturn.

So far, the efforts have yielded fruit. In 2011 alone, the city received $4 million in regional funds to connect the Beltline with one of Atlanta’s busiest thoroughfares, and rehabilitate the streetscape. Another $500,000 from the state was set aside to extend a multi-use trail in southwest Atlanta, connecting it to the new parkway. In addition, private foundations have contributed more than $5 million to build a 2.5-mile bike trail along an eastern segment of the Beltline that links Piedmont Park, Atlanta’s largest greenspace, with some of its most vibrant neighborhoods. That’s on top of other federal awards to clean up brownfields adjacent to the Beltline, which cuts through former industrial and commercial areas.

Despite signs that more public investment may be needed to make up for the recession’s impact, there is some reason for optimism. Ethan Davidson, a spokesman for Atlanta Beltline Inc., the estimates that about a $1 billion worth of new investment has come to the blocks surrounding the project since the city committed to it in 2005. Among them, a widely heralded 2-million-square-foot, mixed-use redevelopment of a massive brick warehouse building built by Sears Roebuck in 1925 and later used as an annex for City Hall. The project, called Ponce City Market, is being developed by Jamestown Properties, the same company responsible for Chelsea Market in Manhattan and other successful urban adaptive reuse projects.

“As they work toward improving the quality of life in city, it’s going to be an attractive place to live,” says Mike Alexander, lead researcher of the Atlanta Regional Commission. “The city has this great foundation of planning work that they’ve seeded the future with. Imagine the Beltline fully implemented. The spine of the economy runs through Atlanta, from Buckhead down to the airport. As we grow and people want to be close to work, the city does quite well.”

Investing in Smart Growth

This isn’t the first time Atlanta or its neighboring cities have experimented with smart growth. In 2005, the city opened Atlantic Station, a 138-acre former steel mill that was transformed into a mixed-use mini-city. A year later, people began moving to Glenwood Park, a former brownfield transformed into New Urbanist neighborhood of mixed-use brick buildings and stand-alone Victorian-style homes. Since 1999, the Atlanta Regional Commission, a massive agency that helps plan the metro region’s land use, transportation and water policy, has awarded grants to cities to conduct charrettes and draft plans that could retrofit other auto-oriented areas into walkable, transit-oriented community centers.

“Those cities who’ve made investments during the recession in their cores are likely to come out better than those making investments in their peripheries.”

Atlanta isn’t alone in pinning its revival on smarter growth and a more diverse economy. In Charlotte — one of Atlanta’s greatest rivals in attracting residents and businesses — state and local officials are testing the waters for a long-awaited, 25-mile commuter rail line to a neighboring county. Councilman David Howard says the city’s keen on boosting quality of life in the urban core, while ensuring that commuter rail serves the surrounding growth. In the former tobacco town of Durham, more than 140 miles away, housing units are at least 94 percent occupied and demand for downtown office space is so strong developers want to build a tower on spec, says Bill Kalkhof, president of Downtown Durham Inc., a non-profit aimed at revitalizing the core of Duke University’s home.

In 2009, the historic coastal town of Beaufort, S.C., overhauled its planning department with an eye to igniting similar growth. The first step was installing a former planner with the prominent smart growth planning firm Duany Plater-Zyberk, the brains behind Seaside, Fla., where The Truman Show was set, and hundreds of other New Urbanist communities across the country. Since bringing in the new planning team, city officials have made a priority of improving its downtown, building a bike and pedestrian trail along a former railroad line, and linking its communities to create “unified and connected neighborhoods designed for people and not just for cars.” According to news reports, construction activity — concentrated mostly in downtown — has nearly returned to pre-recession levels.

These infrastructure improvements only pay off, however, if there are people to drive on the roads, use the rail lines and flush the toilets. To attract continued investment, these cities have also started looking at diversifying their economies with industries other than growth.

When Charlotte leaders saw two of the nation’s largest banks — which were headquartered in the city and one of its main employers — teetering on the brink of collapse, says Councilman David Howard, city officials realized they needed to diversify. They’re now aggressively pursuing the energy industry. Meanwhile, Atlanta and New Orleans are waging in a costly war to be “Hollywood of the South,” with both Louisiana and Georgia baiting the film industry with lucrative tax-incentives.

And in 2010, Miami became the first major U.S. city to scuttle its conventional zoning regulations and adopt an innovative form-based zoning code that encourages mixed-use development for diverse businesses and walkability. Congress for New Urbanism co-founder Elizabeth Plater-Zyberk helped create the plan.

In Atlanta too, planners believe that such changes will yield fruit once the recession lifts.“Those cities who’ve made investments during the recession in their cores are likely to come out better than those making investments in their peripheries,” says Mike Dobbins, a former Atlanta planning commissioner who now teaches at Georgia Tech.

Political Barriers

Now that many southeastern cities and metro regions have woken up, they’ll have to overcome obstacles if they’re to make sense of and correct the chaotic landscapes that resulted during the boom years. But the same economic crash that’s caused land and housing prices to fall to record lows also hamstrung governments’ ability to pay for these needed infrastructure fixes.

“A new bogeyman amplified by a small yet vocal minority: Social engineers masquerading as urban planners are hellbent on converting the idyllic suburban fringe into dense zones the Soviets would envy.”

The most daunting are the inevitable culture wars that erupt between urban and suburban interests and ideological differences. In Florida, where smart-growth development and transportation upgrades are sorely needed, Gov. Rick Scott last year rejected federal funding for a high-speed rail line between Tampa and Orlando. In addition, a new crop of conservative lawmakers and a new Republican governor took aim at the Sunshine State’s law requiring local communities to submit comprehensive plans each year. And Tampa voters last year rejected a sales tax hike that would have funded transit. In North Carolina last year, a fresh slate of Tea Party-inspired lawmakers tried to kill state funding for Charlotte’s transit projects.

In the past, transit critics — including some Georgia elected officials — warned that inner-city criminals would ride the new rail lines to the ‘burbs, walk miles to subdivisions, and steal TV sets. That’s been replaced by a new bogeyman amplified by a small yet vocal minority: Social engineers masquerading as urban planners are hellbent on converting the idyllic suburban fringe into dense zones the Soviets would envy.

“It’s the same argument updated with different imagery,” says Christopher Leinberger, a visiting fellow at the Brookings Institution. “But it all comes down to the fact that we need choice in our society. We just overbuilt drivable suburban. Now for the new knowledge economy we need more walkable, urban product. That’s in short supply. And we need the infrastructure that drives that. Do we want to grow or not want to grow?”

Adds Mike Dobbins of Georgia Tech: “Suburban sprawl is social engineering. We tip our money, strategies and policies to support sprawl. As a capitalist nation, that’s where we decided money could be made at the time. Now, as the pendulum is swinging at reinventing and rediscovering the values of our core cities, there are these political forces that are somehow calling those efforts ‘against the free market.’ There’s no such thing. There isn’t a part of our economy that isn’t interwoven with government policies.”

Nowhere are these differences more pronounced, perhaps, than in metro Atlanta, where the central city is often referred to as a “blue island in a sea of red.” MARTA, one of three transit agencies the federal government helped fund during the 1970s, has barely grown thanks to neighboring counties rejecting the rail lines because of, it’s often blamed, race. The tensions have only grown more pronounced over the 10 years since Republicans gained control of the Legislature and governor’s office — along with recent influence of the Tea Party.

In July, voters in the metro region will decide whether to tax themselves an extra penny sales tax that could generate more than $7 billion to build new roads and transit, including a large chunk of the Beltline light rail. Tea Party groups have vowed to campaign against and defeat the measure. Business boosters are backing the ballot in question with millions of dollars in marketing. Should the referendum fail to pass, supporters say, there’s no “Plan B.” The tough times, they say, will continue. In recent weeks, a more unlikely opponent has promised to rail against the measure: A local NAACP chapter in one of the counties considered key to the measure’s passage has also vowed to fight the tax because the list of projects to be built with the tax did not include a heavy rail line into predominantly black south DeKalb County.

“A lot of these Sun Belt cities have been in a race to the bottom,” says Peter Kageyama, a Florida-based urban advocate. “You’ve got to actually invest and spend money. And the things people really like about their places require a little bit of investment. People want more and I think we’ve grossly underestimated their capacity and desire for these things.”

The culture wars are different in Washington, D.C., however, where federal officials decide how vital funding is allocated to often help kickstart these projects. Patrick Doherty of the New America Foundation, a Washington, D.C.-based think tank, says that much of the debate over urban and suburban issues such as sprawl transcends political affiliations and revolves instead on policies that favor business models supporting cheap housing and wide roads.

Consumer demand, however, might just trump politics. And one of the nation’s largest economic opportunities, he says, is taking advantage of what market data shows both boomers and millenials want for the foreseeable future: Walkable, service-rich, transit-oriented communities. That doesn’t just have to be infill in the urban core, Doherty adds, but also retrofitting the suburban fringe’s vacant strip malls into town “centers.”

“What’s interesting is that because it’s driven by time of life, it’s cutting across political affiliations,” Doherty says. “It’s not red or blue. It’s the simple fact about being a human and needing to move around your space. We’ve overbuilt a single type of community design and expected people at every age to fit into that suburban, large lot, car-dependent model. As in any society, it’s those with the diversity of choices that are healthiest.”

A Streetcar Named Aspire

On Feb. 1, Atlanta Mayor Kasim Reed and other city and transit officials gathered with U.S. Transportation Secretary Ray LaHood in the Old Fourth Ward neighborhood, in the shadows of downtown’s skyscrapers. After more than a year of studies and engineering designs, Atlanta was prepared to start spending some of the $47.6 million the feds awarded to build the city’s downtown modern streetcar.

Auburn Avenue, located one block away, was once the epicenter of Atlanta’s black community and lined with businesses, restaurants and nightclubs. That was until the 1960s and the construction of Interstate 75 — now an astounding 13 lanes wide — which separated the neighborhood from downtown’s vibrancy. Numerous attempts at revitalization had failed. LaHood tells a reporter before the event that this time, the streetcar will work.

“This is gonna be a magnet for attracting people to Atlanta,” LaHood says. “Not only the streetcar, but all along the corridor. It will enhance the economy of Atlanta…All this is a job creator. It’s an economic engine. But it’s also the kind of transportation that people are looking for today. And we’re seeing it all over America.”

Once built, the 2.7-mile line will glide past the burial place of Martin Luther King Jr. and a four-acre urban garden — and many vacant mixed-use buildings just waiting for tenants — and head toward CNN’s headquarters and Centennial Olympic Park, a massive greenspace just steps from the world’s largest aquarium. (And, because it’s Atlanta, a museum dedicated to Coca-Cola.) Bike lanes will run along one part of the route that ends just a half-mile from the Beltline. Downtown boosters say investors tell them the streetcar project is what attracted them to the area. A June 2011 analysis of downtown real estate by RCLCO, prominent industry number-crunchers, found that 400 new housing units are expected to be built within two blocks of the streetcar in the next two years alone.

Moments before LaHood, Reed and other elected officials pose with shovels in front of a photo-ready construction area, 83-year-old Rufus Curry moseys along Auburn Avenue, the historic street he’s called home his entire life. He pays little attention to the morning’s festivities just one block away, opting to instead shake hands and chat with friends and neighbors waiting for rides. He remembers the day when trolleys once ran along the same street.

“It’s gonna do great things,” he says when asked what he thinks about the project, which, should all things go according to plan, will open in 2013. “It’ll be good.”

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