The City of South Fulton is asking state officials to curb the investor feeding frenzy that’s eating up single-family housing stock.
District 2 Councilwoman Carmalitha Gumbs will offer a resolution at Tuesday’s City Council meeting, asking the House Committee on Regulation, Affordability, and Access to Housing “to regulate investor-owned housing and encourage owner-occupied housing in Georgia to protect single-family neighborhoods and increase access to affordable home-ownership options and affordable rental options for citizens.” Rep. Debra Bazemore (D-63, South Fulton) sits on that committee.
According to Redfin, Atlanta was the nation’s top investor real estate market in the last quarter of 2021—and nearly 60% of South Fulton single-family homes went to investors. And the Federal Reserve Bank notes that Atlanta single-family home prices are up 25%, while the national average increase is 20%.
“Investor activity is especially pronounced in the suburbs surrounding Atlanta, and African American neighborhoods are targeted more than white ones, exacerbating existing racial gaps in home ownership,” Gumbs said in a press release.
A check of South Fulton single-family homes on Redfin at press time showed recent sales from about $226,000 for a modest 3/1.5 ranch off Godby Road to $595,000 for a 5/4.5 McMansion with a two-car garage.
Listen to the Fed’s interview with Domonic Purviance on housing (un)affordability:
Prices have gone up as cash-flush absentee landlords buy up affordable housing in metro Atlanta and carve up single-family homes into boarding houses that bunk a dozen or more people. Property flippers buy houses, do minimal remodeling, then turn around and ask double or more for what they’d paid for the property.
As Atlanta gentrified and more high-paid tech workers migrated to the city, many less-affluent residents were pushed south, where housing stock in South Fulton, Clayton County, and the Southern Crescent was (and is) less expensive. After the real estate bust in 2008, largely prompted by lax mortgage requirements for cash-poor buyers, the market crept back up—and investors with cash began snatching up low-priced houses when mortgage lenders tightened up their requirements for borrowers.
Those practices cut first-time homebuyers and even renters out of the market, leading to more evictions and forcing some people into the endless cycle of weekly rentals at extended-stay motels, because the exorbitant rents also mean exorbitant deposits out of reach for most working people. Because home ownership is one of the most secure ways to build generational wealth, people who are hard-pressed to make high rents are far less likely to be able to save up for a down payment on their own home.
“”We seek to limit those gaps and level the playing field. We want to broaden the number of people who can feel the pride and security of owning their own homes,” Gumbs said.