Can metro Atlanta lawmakers rein in Wall Street landlords jeopardizing housing affordability?

Lawmakers must crack down on the exploitative practices of Wall Street investor landlords if there’s to be any hope for housing affordability in metro Atlanta, experts told Atlanta Civic Circle this week.

These so-called “institutional landlords” accounted for more than 40% of the single-family home purchases in the Atlanta, Sandy Springs, and Roswell area in the third quarter of 2021, Georgia Appleseed Center for Law and Justice executive director Michael Waller told U.S. senators during a hearing about national housing issues earlier this month.

Corporate landlords were also responsible for more than 76% of eviction filings in Fulton, Gwinnett, DeKalb, Clayton, and Chatham counties between Sept. 1 and Dec. 31, Waller added, citing Private Equity Stakeholder Project data.

Despite the influx of private equity landlords and the sharp spike in houses turned into rental properties, the government doesn’t well enough regulate predatory pricing or health and safety conditions for single-family rental houses the way they do for apartments. And now, there are two bills before the state legislature that will make it even easier for Wall Street landlords to poorly maintain rental houses.

“An investor comes into the community and purchases property,” Waller explained to lawmakers of the phenomenon on Feb. 10. “They quickly drive up rents. They impose novel and unwarranted fees.” Extra charges for pest control, utility service, renters insurance, valet trash, and one-time activity fees can double or triple rental prices, the public interest lawyer said.

 “They refuse to provide upkeep and basic maintenance. They abuse our eviction systems, and they hide from accountability,” he said. 

Even when problem properties — with subpar, if not outright dangerous living conditions — are discovered, tracking down their owners is “virtually impossible,” he added. “Out-of-state shell companies hide the owners, and tenant advocates and governments simply can’t identify them.”

What’s more, Georgia law prohibits municipalities from imposing any kind of inspection requirements for single-family homes before they’re rented out, further jeopardizing the housing security and safety of tenants in metro Atlanta and beyond. 

Tenant protection laws are needed at both the state and local levels to combat these inequities, which are concentrated in lower-income communities of color, Waller told Atlanta Civic Circle in an interview, but that’s easier said than done when laws favoring landlords are already so deeply ingrained. 

Stronger tenant protections and stricter housing code enforcement are imperative, he said. So is regulation to make it harder — or totally illegal — for investor landlords to use bogus shell corporations to shield themselves from accountability. 

Dan Immergluck, a Georgia State University urban studies professor, echoed Waller’s call for reforms that address the rise of absentee investor landlords, telling Atlanta Civic Circle in an email that state laws which block cities and counties from inspecting and regulating single-family rental property should be repealed.

“Local governments should be able to reasonably ensure the safety and health of rental housing in their communities on behalf of their renters — but not to hassle rental properties to discourage rental housing in their communities,” he said.

Meanwhile, legislation under consideration in the Georgia House and Senate — House Bill 1093 and Senate Bill 494 — paves the way for the creation of entire subdivisions of “build to rent” homes by lifting zoning and land-use restrictions aimed at keeping renters out.

The bill’s bipartisan sponsors say the measures would spur the creation of more housing — something experts agree is needed in fast-growing metro Atlanta.  

But the proposed legislation could worsen the problems created by private equity landlords, said Doraville Mayor Joseph Geierman Feb. 16 on LinkedIn. “I fear that, if this law passes, we will see potentially dangerous, unregulated living situations with unaccountable landlords increase for people all over the state of Georgia.”

Geierman said he’s not opposed to new housing, including new rental housing, but prohibiting routine inspections of single-family rentals would be detrimental to the community.

Should evicting renters be tougher?

The main reason private equity investors have been snapping up rental houses and apartments in metro Atlanta and statewide is that Georgia law allows one of the fastest and easiest eviction processes in the country, Immergluck said. People can be turned out of their home in less than a month. 

Very few tenants facing eviction have a lawyer. Unsurprisingly, those who do are much more likely to avoid being evicted. Legislation that gives Georgians the right to publicly funded counsel for evictions would go a long way to combat the scourge of unfair — and in some cases, illegal — displacement, Waller said.  

Only people facing criminal charges have the legal right to a public defender under federal law and in Georgia, but the Atlanta City Council in December approved a measure that authorizes the city’s public defender office to supply funding and services to the legal nonprofits handling eviction defense locally, Atlanta Volunteer Lawyers Foundation and the Atlanta Legal Aid Society. 

Just having a lawyer isn’t enough, say legal aid lawyers, in a state where the laws so strongly favor landlords. To level the playing field, tenants need more legal protections that would require landlords to properly maintain properties and slow down Georgia’s super-speedy eviction process.