Georgia lawmakers last week watered down legislation to allow local governments to monitor institutional landlords. A state House committee amended House Bill 374 so that it would only apply to entities that own “at least ten contiguous dwelling units” in any jurisdiction.
Authored by Rep. Martin Momtahan (R-Dallas), HB 374 initially authorized counties and municipalities to create “housing management databases” — or rental registries — to log the contact information of all companies that own and operate residential rental properties. The aim is to make it easier for local governments to identify landlords and hold them accountable for code-enforcement violations and other mismanagement.
The bill emerged in response to institutional investors’ mounting control of local housing markets across Georgia. But housing advocates say it has lost teeth, because the changes sharply limit the number of landlords that are required to register their properties. Now, it applies only to landlords who own at least 10 contiguous rental housing units. The measure also exempts those who own apartment complexes with more than 20 units.
“I don’t know how many places are going to meet those criteria, now that they’re so narrow and specific,” said Taylor Shelton, a Georgia State University geographer who studies institutional investor practices. “I think it opens the question of whether it would even be worth a municipality investing in creating a registry or housing management database, if only to regulate that very small number of entities.”
However, additional legislation is cropping up at the Gold Dome to regulate institutional landlords, a sign that state lawmakers have realized how powerful hedge funds, private equity, and real estate investment trusts are becoming as big housing owners in Georgia.
Rep. Ruwa Romman (D-Duluth) introduced a bill on Feb. 27 to prevent large corporate landlords from taking advantage of tax loopholes for large swaths of property they own.
“They can sometimes claim [residential assets] as commercial property, which depreciates over time, so they get a tax exemption for it,” she said of HB 616. Romman noted that it’s unclear how common a practice that is among institutional landlords. “We’re just trying to stop the double-dipping.”
“I was tired of the incentives that these investors are getting to buy these homes,” Romman added. “So we’re trying to find every nook and cranny that’s making it easier for them to do this, and trying to make it harder for them.”
HB 616 adds to the accelerating drumbeat of legislative attempts to regulate institutional investors’ influence on Georgia’s housing markets. Besides HB 374 to allow rental registries, lawmakers have introduced HB 305, which would limit how many single-family homes companies can buy, and HB 399, which would require out-of-state landlords with 25 or more single-family homes or duplexes to have at least one staffer in Georgia to handle tenant communications. (The House passed HB 399 on Monday, sending it to the Senate.)
Romman told Atlanta Civic Circle that she also intends to propose a bill to restrict corporate landlords’ use of AI-powered price-fixing software. Nearly one in every four rental properties nationally uses a pricing algorithm developed by property management software company RealPage to set rental rates, according to a White House report from December.
“I’m seeing if there’s a way to ban [the use of these algorithms] so you can’t use AI on pricing goods that are essential, including healthcare, food, and housing,” Romman said.
In that same vein, Rep. Gabriel Sanchez (D-Smyrna) on Feb. 28 introduced the “End Rental Price-Fixing Act,” a bill “to prohibit certain agreements involving rental price-fixing as unenforceable contracts.”
“The cost of housing in Georgia has begun to rise steeply,” HB 679 says. “One factor in this recent increase is coordination among landlords to fix rental prices. […] This coordination not only undermines market competition, but it also threatens the financial well-being of Georgians.”
And HB 555 aims to “prohibit business enterprises from owning an interest in more than 2,000 single-family residential properties or ten multifamily residential properties” in Georgia. Rep. Derrick McCollum (R-Chestnut Mountain) proposed the bipartisan bill along with four other Republicans and one Democrat on Feb. 20.
Will they pass?
It remains to be seen how many of these bills will clear the House before Crossover Day on March 6 — the deadline for proposals to move from one legislative chamber to another for a chance at passing this year.
But the growing volume of both legislation and political discussion on institutional investors’ housing impact in Georgia indicates a bipartisan desire by state lawmakers to address the problems these home-buying investment funds pose for regular Georgians, according to Michael Waller, the head of the Georgia Appleseed Center for Law and Justice.
“Republican and Democratic lawmakers are spearheading this collection of bills,” he said. “It’s a meaningful effort to protect low- and middle-income Georgians.
What’s more, Waller said, these lawmakers are working with nonprofits with deep community ties and leading GSU and Georgia Tech researchers to craft the legislation. “The combined impact would empower communities [by providing] essential information about property ownership, ensure that landlords are responsive and responsible, and curb the rapid acquisition of homes by institutional investors,” he said.
There also needs to be legislation to cap the total number of houses that can be investor-owned, period. If not, those companies that own more than 2,000 homes will just splinter into separate entitities and sell/transfer the homes to those companies.
Price fixing and racketeering are serious offenses, but our legislature treats this situation like it’s a puzzle.