Governor pledges to ease local zoning restrictions. But how—and for whom?

Metro Atlanta housing experts’ ears perked up when Gov. Brian Kemp this week told a gathering of business leaders and politicos he’d back legislation to relax local zoning laws that obstruct the construction of much-needed affordable housing.

It’s yet unclear whether Kemp is interested in zoning reform that increases housing density in more urban areas or that makes it easier to build starter homes for workers flocking to the many auto plants and tech company hubs springing up around the state. 

Both approaches to reducing housing costs have active support amid Georgia’s worsening housing crisis. The state House of Representatives convened an affordable housing committee last fall that heard from both suburban homebuilders and urbanists, and issued a report incorporating zoning reform recommendations from both camps.

“It’s a tough issue,” Kemp said of the state’s affordable housing shortage at Wednesday’s Eggs and Issues Breakfast, convened every year by the Georgia Chamber of Commerce to kick off the legislative session. “It’s one of the things that we are hearing from our companies that are expanding and creating jobs.”

But the governor made it clear that the influx of jobs from carmakers like Rivian, Kia and Hyundai, among other companies that Georgia’s economic development agencies have attracted, amplifies the need for affordable housing statewide. 

“We want people to live in the community where they are working,” he said. “It cuts down on logistics. It cuts down on the need for infrastructure, and it just honestly makes for a better quality of life.”

Reached by email, the governor’s office did not expand on his plan for local zoning deregulation, but Georgia State University urban studies professor Dan Immergluck told Atlanta Civic Circle he’s concerned Kemp’s remarks “seem to suggest he only cares about affordable housing if it is needed to recruit large employers into the state.” 

Skyrocketing housing prices are already a huge problem for all of Georgia’s middle- and lower-income residents, not just the influx of new workers brought by the state’s economic development efforts, said Georgia State University sociology professor Deirdre Oakley, who studies housing. 

“The housing growth cannot just be in the professional sector; it’s going to have to be in the supportive sector as well,” she said, alluding to service workers and other lower-income people.

Kemp’s support for last year’s legislation making it more cumbersome for municipalities to grant residential zoning variances casts doubt on his appetite for more inclusive zoning, Immergluck said in an email, adding that he looked forward to seeing the governor’s zoning reform proposals..

“I do wonder why he signed legislation last year making it harder—not easier—for local governments to implement zoning reform,” Immergluck said. 

Upzoning efforts in flux

Nationally, there’s a consensus among housing experts that revising restrictive single-family residential zoning codes to permit denser housing construction—or upzoning—is one of the most effective ways to create more affordable housing. Building more units on less land can temper costs for renters and homeowners.

But last year Kemp signed legislation that makes upzoning more difficult. It requires local governments to hold more public hearings before approving zoning variances or rezoning for residential property, so the likelihood of him supporting any bills that allow cities and counties more freedom to approve denser housing construction seems slim. 

But that could change. A state House of Representatives study committee on affordable housing released a report in November that called Georgia’s residential zoning laws outdated. It floated the idea of revising them to allow more “missing middle” housing, like small apartment complexes and accessory dwellings. 

“Current zoning procedures are based on 20- to 30-year-old standards, which catered to the baby boomer generation and their families and led to the proliferation of single-family, detached homes in neighborhoods with good school districts,” the report said.

In metro Atlanta and other Georgia cities, there is a dearth of missing middle housing, which can be more affordable than single-family homes, the report found.

“Restrictions on the construction of specific types of housing are a barrier to developers and owners, who may be exploring more affordable housing options like accessory dwelling units and missing middle housing,” it said.

Amanda Rhein, who heads the Atlanta Land Trust, an affordable housing developer, said the study committee’s work is “really exciting, because historically there really hasn’t been a venue at the state level for discussions on housing affordability.” 

Rhein said she’s heartened by the report’s focus on stimulating more “missing middle” development. Ideally, she added, the city of Atlanta, which is in the midst of rewriting its 40-year-old zoning code, would eliminate single-family-only zoning—the land-use designation encompassing most of the city’s residential property. 

“There needs to be a broader mix of housing typologies within a single-family zoning district,” Rhein said. “There should be more flexibility around minimum lot sizes to allow for two to four units on an individual lot.”

The committee’s report came to a similar conclusion: “There is the opinion [among experts] that there is a need for better land use, which could produce more housing units per acre of land, which would reduce the cost of housing,” it said.

“This increased density would produce more ad valorem tax revenue per acre of land used, which would offset the cost of service delivery to residents in newly developed housing units,” it added. 

The House report also addressed institutional investors like hedge funds who buy up entry-level housing and turn it into rental property, a national phenomenon that particularly affects Georgia.

Nationally, only about 4% of homes on the market were bought by investors, but for Georgia that shot up to between 20% and 33% in 2021–the second highest level of investor activity in the country, according to HouseATL data cited in the report. By 2030, 40% of single-family rental homes could be investor owned, it said.

The report raised the concern that institutional investors buy up houses at premium prices “that force Georgia families out of the competitive market.” That further drives up housing prices, on top of the rising prices of land, labor, and materials for new construction.

Georgia lawmakers must step up to reign in Wall Street’s outsize influence on the state’s housing market, Rhein said, especially in places like metro Atlanta, where hedge funds have been buying up single-family properties en masse.

But it’s encouraging that lawmakers in the Republican-controlled legislature are having more nuanced conversations about housing affordability, said Oakley, the GSU professor.

“I think it’s good that these things are being talked about,” she said, “because it means the conversation is getting broader than just, ‘How do we house all these professional workers?’”