Athens City Council on Monday in committee discussed at length amending the terms of 2020 legislation that entered the city into an agreement with a private developer to construct single-family townhouses inside the University Estates subdivision.
Councilmember Sarah Grace revealed that because of pandemic-related supply constraints on building materials, the cost of construction has skyrocketed and the developer can no longer afford to build and sell homes at the originally agreed upon price. The developer, Albany-based Cornerstone Home Builders, asked the city to approve a $20,000 increase in the sale price of each townhome, totaling $240,000 per unit, Grace said.
“If we want this development to go forward, we need to give them the flexibility to do this. Because if they are unable to build it and then sell the units at a price that keeps them in the black as a business, then (the townhouses) simply won’t be built,” she said.
Cornerstone Home Builders owns the property in University Estates where the townhomes would be built, leaving the city unable to hunt for a different developer who could sell the homes at a lower price.
City Council’s Affordable Housing Commission identified in recent years the need for expanded owner-occupied housing in the city that is affordable for young professionals, The Athens NEWS previously reported, culminating in the 2020 agreement.
According to the agreement, a private developer was to build homes held to multiple standards by the city, including a requirement that each cost no more than $220,000.
The city’s role in the agreement was to create a tax increment financing fund (TIF) to collect 75 percent of the increased property valuation of the land for 10 years after the homes are built. The city would use the money collected from the TIF to pay the developer to service a bond to finance roads and other infrastructure needed for the homes.
The requested price increase disturbed several councilmembers, some of whom mentioned that homes with price tags nearing a quarter of a million dollars are by no means affordable for many city residents.
Councilmember Beth Clodfelter urged the body to refrain from billing the homes as affordable, saying Council would be “laughed out of the room” by low-income residents.
“I just think that we should be really careful not to overinvest in housing that people can’t afford,” she said.
Councilmember Jeffery Risner was concerned that the city may no longer be able reach the project’s target demographic — low-income, young professionals — if it were to approve the price hike. Risner signaled that he would oppose a measure adapting to the developer’s needs.
Grace mentioned that the townhomes could instead serve elderly residents, and that the city’s investment in the project is less risky than the developer who would independently finance the homes’ construction.
In other news, Mayor Steve Patterson said he’s working to amend city code to expand the list of classes protected under the law as part of the citywide effort to review language under the lens of racial and social equity in an effort to eliminate systemic racism and other injustices.