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American Dream For Rent: Capitol nixes oversight amid housing crunch
State legislature blames local government, not investors, for rising prices.
As large investors ramped up their homebuying spree in the wake of the pandemic, an industry-aligned group launched a campaign to stop local governments from standing in the way.
The committee, Georgians for Quality Housing Options, donated more than $58,000 to state political candidates, according to campaign finance reports.
The group’s bill, which would have blocked local regulations of single-family rentals, didn’t receive a vote last year, but a version of the proposal resurfaced this week in the state Senate. And the question of who should regulate housing in Georgia — and how — remains a top issue as the 2023 state legislative session nears its halfway point.
On one side, homebuilders and investors want to make it easier to build new homes by eliminating many local regulations. On the other, local housing advocates say government agencies need more tools — not fewer — to hold out-of-state owners accountable and protect tenants from landlord abuses.
Last fall, more than 50 homebuilders, local officials, tenant advocates, lenders and academic experts testified before a legislative study committee. Their testimony painted a nuanced picture of what has ailed metro Atlanta’s housing market since the 2008 foreclosure crisis:
- Tight lending policies made it harder for people to buy.
- Local zoning rules dictating large lot sizes, ample parking and expensive construction materials made it costly to build.
- Taxes, permitting fees and supply chain disruptions during the pandemic tacked on higher costs still.
Over the next year, builders would need to add 72,400 new homes in metro Atlanta to keep up with demand. But only 13,000 are projected to be built in that time, housing research firm MarketNsight told the committee.
Investors capitalized on the supply shortage, scooping up more than 65,000 single-family homes across an 11-county area over the past decade, The Atlanta Journal-Constitution found. And as consumer choices have dwindled, would-be homebuyers have been priced out, only to be stuck renting from the same investors that outbid them with boundless cash.
The committee’s final report, however, downplayed the role of large investors in driving up prices. Investor activity accounted for just two paragraphs of the 13-page document.
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Instead, the committee’s study of the complex drivers of Georgia’s affordability crunch endorsed a simple solution straight out of the single-family rental industry’s playbook: Free the market from local regulation.
In an interview, the chairman, Rep. Dale Washburn (R-Macon), distanced himself from the single-family rental bill, which he sponsored last year. “I told them I would not have anything to do with it,” Washburn said.
Instead, he plans to introduce legislation to relax local rules on lot sizes and design standards, arguing that it will increase supply and make homeownership more affordable. But while he said he wants local governments to hold bad landlords accountable, he questioned the need for a landlord registry, a tool local officials say would help.
“If you’ve got absentee landlords who are raking in big returns and allowing people to live in substandard conditions, I think that’s deplorable,” Washburn said. “I’m just not sure what the solution is.”
Local officials say the legislature’s “anything goes” attitude is why they need local control of housing in the first place. State law prohibits local governments from requiring inspections or registering rental properties.
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“We get the phone calls from the person who’s upset about the renter next door not taking care of something or the renter who’s upset because the landlord won’t,” said Jeff Moon, the Woodstock city manager. “And if you tie our hands and do a one-size fits-all (bill) at the state level, no one’s going to be happy.”
Rep. Marvin Lim (D-Norcross) sees a need for some middle ground that reduces regulations that impede homebuilding, while strengthening those that protect renters.
“Across the line, I think we’ve seen regulations are harming affordability, and not doing enough for livability,” he said.
A bill introduced this week and backed by top Republicans could address some of the threats posed by investor ownership. The Safe at Home Act would require landlords to provide rental homes “fit for human habitation,” and add some protections for renters who face eviction for being late on rent. House Speaker Jon Burns credited the AJC’s investigation into low-income apartment complexes, Dangerous Dwellings, for the proposal.
Sen. Emanuel Jones (D-Ellenwood) told the AJC he hopes to introduce legislation to curtail how investors are able to operate, calling them a threat to homeownership.
“I don’t know what it is at the moment,” Jones said, “but I am searching.”
Staff writer Zachary Hansen contributed to this story.