Overview:
Red Hot City: Housing, Race, and Exclusion in Twentieth-Century Atlanta. By Dan Immergluck. University of California Press, 2022. $29.95. If you buy a copy of this book through The Clayton Crescent's Amazon Smile link, we earn 0.5% of the sales price.
If you’ve ever asked yourself why so many people in Clayton County are living in motels, why politicians say they want to add more “market-rate” housing, why we’ve had so many foreclosures in recent years, or why investors are snapping up all the affordable single-family homes, you might want to read a new book called Red Hot City: Housing, Race, and Exclusion in Twenty-First Century Atlanta.
Red Hot City‘s author, Dan Immergluck, is professor of urban studies at Georgia State University. He’s an expert on gentrification, housing markets, and how government housing policies reinforce segregation. While the book is really about the metro Atlanta as a whole, Immergluck’s research confirms what a lot of Clayton County residents already know or have experienced firsthand.
In simple terms, the lack of affordable housing in Clayton County (and other places) is no accident, according to Immergluck. It’s the result of policy decisions by elected officials, quasi-governmental organizations like development boards, and private businesses looking to make a buck.
Surprisingly, “white flight” from the cities between 1940 and 1980 was, he writes, not as big a factor in Clayton and other metro Atlanta counties. Instead, most white people moved to the Atlanta suburbs from other places, bypassing the city altogether. (Some longtime white residents have fled Clayton County for whiter, more rural areas since it became a majority-minority county.)
Atlanta’s desire to attract businesses and its obsession with becoming a “world-class city” meant its leaders focused on bringing in people with more money. Three big factors in this shift, according to Immergluck, were the 1996 Olympics, the early phase of the Atlanta Beltline, and the most recent foreclosure crisis.
People in metro Atlanta, as well as in other cities around the world, often compare how things were “before the Olympics” and “after the Olympics.” Longterm residents blame the Olympics for drawing a new wave of residents from other states and countries, for overcrowding and traffic, and for unbridled development. Some frame those criticisms in racist or xenophobic terms.
The Atlanta Beltline originally was conceived as a way to connect people and neighborhoods by walking and biking. It quickly turned into a massive real estate grab, “leading to strong increases in gentrification. Instead of securing a substantial amount of land for developing affordable housing early in the process, the city and the Beltline organization chose instead to prioritize a quick rollout of parks and trails, which themselves fueled further housing demand.” What it did not do was ensure affordable housing that might have allowed long-time residents the choice of staying in the neighborhood.
Immergluck also recounts colleague and occasional Clayton Crescent contributor Maggie Lee’s coverage of Atlanta’s development authorities and the hundreds of millions of dollars that Invest Atlanta and the Development Authority of Fulton County granted developers and big corporations—not to mention the fat per-diem fees DAFC paid itself.
The foreclosure crisis played out in Clayton County on numerous pages of the News-Daily, where legal advertisements listed hundreds of affordable homes that residents lost (over relatively small amounts of money) to big lenders like Deutsche Bank and Countrywide Lending each week. Many of these homes were owned by Black residents or were in historically Black communities like Rosetown in Forest Park.
One reason people in low-income areas pay higher interest on mortgages has less to do with how good your credit is and more to do with whether someone else plans to buy up your neighborhood: “The subprime crisis resulted from a policy regime that, rather than providing homeowners and neighborhoods with access to credit, was focused on providing global capital with access to neighborhoods and homeowners, as Lathe Newman has put it so well,” Immergluck writes. “The crisis uprooted families from communities and schools, damaged households’ credit history and economic opportunities, and left many neighborhoods, often Black ones, pockmarked with vacant homes and many homeowners with mortgages far larger than their homes were worth.”
Once homeowners lose what is usually their largest financial asset, investors snap up dozens or hundreds of foreclosures at a time. They don’t turn around and sell those homes individually. They usually sell them as a package deal. By keeping a tight rein on the existing housing supply, investors can charge exorbitant rents or tear down and replace modestly-priced single-family homes with McMansions, townhomes, or hastily-built subdivisions at “market rate” prices. (The most intensive degree of this is PadSplit, which cuts up single-family homes into many small rentals in what the company says is its answer to homelessness. A source tells The Clayton Crescent that some such local properties are essentially bunkhouses, a characterization the company rejects.) That market generally does not include people who already live in the affected area. This drives up property taxes for surrounding homeowners, and the cycle of pricing people out of their homes begins again.
In 2001, Immergluck notes, State Sen. Vincent Fort tried to take on the problem: “Aided by experts like those at Atlanta Legal Aid and the Center for Responsible Lending…Fort introduced a strong subprime lending bill in the Georgia legislature. In 2002, Governor Roy Barnes signed the Georgia Fair Lending Act (GFLA),” based on a similar North Carolina law.
However, “As soon as the law went into effect, the lending industry began a concerted campaign to overturn it, especially after Barnes lost his reelection bid in 2002 to conservative Republican Sonny Perdue,” now head of USG’s Board of Regents. In 2003, “the credit agency Standard & Poor’s loudly proclaimed that it would not rate securities backed by Georgia mortgages due to GFLA. Soon, lending industry advocates managed to replace the GFLA with a much weaker law.”
The subprime mortgage industry raked in hundreds of billions of dollars until the bubble burst in 2008. And they got a lot of that money, Immergluck writes, from high-interest-rate loans to “communities of color in the Atlanta metro, especially to Black neighborhoods,” specifically Clayton County, South DeKalb, and South Fulton. In 2005 alone, he points out, if a neighborhood was at least 75% Black, it had 53% high-interest (subprime) mortgage loans. If another neighborhood was less than 10% Black, only 20% of the mortgage loans were subprime. Low-income whites also were targeted for subprime loans. When unemployment rose in 2010, those Black, Latinx, and low-income homeowners lost their homes and many investors just walked away, leaving the houses to rot.
“The foreclosure crisis [in metro Atlanta] began in predominantly Black neighborhoods on the south, southwest, and west sides of Atlanta and in many neighborhoods in south Fulton, south DeKalb, and Clayton counties,” according to Immergluck, “where subprime lending levels were generally very high. The subprime crisis then metastasized into a broader foreclosure crisis that spilled over into more and more neighborhoods.” Around 2010 to 2012, he adds, most foreclosures were not happening in Atlanta proper, but “had spread out to more neighborhoods in south Fulton, south DeKalb, parts of Clayton County, and new concentrations in central Gwinnett County.” That was not the case in affluent white suburban areas (like north Fulton or north DeKalb) because “[t]hose communities received few subprime loans” and “benefitted heavily from refinancing their homes into lower interest rates” through government programs.
Red Hot City details how Wall Street investors targeted single-family homes and turned them into rental properties, forcing former homeowners into paying higher monthly rents.
While the book doesn’t go that deeply into Clayton County, much less the specific neighborhoods here, it does give residents a way to understand how voting for or against a Special Local Option Sales Tax (SPLOST), cheering a proposed development without first understanding whether it is being built for people who already live here or for an imagined future clientele, or signing for a high-interest mortgage in a low-income neighborhood affects them. Nationwide, Atlanta had the fourth-highest number of “single-family rentals” (SFRs). However, this happened almost exclusively with foreclosed properties in low-income areas: “SFR investors were not looking to pay the higher home prices commanded in [high-income] areas, and wealthier homeowners had strong access to mortgage credit despite the tighter mortgage markets that disproportionately affected lower-wealth households.”
Four of the largest investors were Invitation Homes, American Homes 4 Rent, Front Yard Residential, and Tricon America Homes, Immergluck notes, according to a study by Suzanne Lanyi Charles. While these companies saw Gwinnett County as “ground zero,” they attacked “a broad donut that encircles the city of Atlanta, including running through much of Gwinnett, south DeKalb, south Fulton, Henry County, Clayton County, Douglas, Cobb, and Paulding Counties”—in other words, OTP.
Different companies targeted different sections of the metro, with “Front Yard Residential focused much more on the predominantly Black areas of south Fulton, Clayton, and south DeKalb….This suggests that, by targeting different parts of the region, the firms reduced competition and maximized their market power.”
Immergluck also writes about Black suburbia, which he links to “lower housing costs in far-out suburbs, following the well-trod ‘drive till you qualify’ mantra of real estate and mortgage lenders. Some of the post-2000 Black suburbs were effectively newly developed,” as opposed to abandoned by white flight. Majority-Black suburbs, “including much of Clayton County, and parts of Douglas, Cobb and Henry Counties,” as well as increasing Black homeownership in “more diverse, minority-Black neighborhoods,” reflect a growing Black population in the metro.
Maps based on American Community Survey data show Clayton County’s strong (25-44%) Latinx and Asian American populations, but these are not discussed specifically in terms of Clayton County in the book. The map where Clayton County does merit passing mention is the 2017 poverty map, where most of Clayton County fell between a 20% to 29.9% poverty rate: “poverty rates are relatively high in a good deal of south-central DeKalb County, Clayton County, Douglas County, central Cobb, and central Gwinnett Counties. As in 1990, 2017 poverty rates were high in many parts of the fringe, exurban counties, some of which remain predominantly rural….localized poverty rates in the region have remained highly racialized.”
Overall, from 2000 to 2017, Immergluck notes that homeownership dropped in Clayton and other metro suburban counties, “especially along expressways and arterials where significant multifamily rental housing was developed during this period.” Another culprit was “the conversion of single-family homes into rental housing during and after the foreclosure crisis.”
Not surprisingly, he adds, “Many of the neighborhoods experiencing the largest declines in ownership rates were areas with increasing or already larger Black populations, including parts of Douglas, Clayton, Henry, and Gwinnett Counties. Many of these same areas—especially working- and middle-class suburban neighborhoods—were targets of institutional real estate investors who entered the market in 2012 to purchase foreclosed homes and convert them to rental properties.”
COVID-19 drove up prices, Immergluck writes, which “began to lock many Black families out of homeownership once again.” Those who did buy chose more integrated neighborhoods: “Thus, while efforts to assist Black buyers in majority-Black neighborhoods may be worthwhile, especially to reduce displacement, it is crucial to recognize that recent patterns of Black homebuying have been much more spatially diverse than is often assumed.”
As homeownership rates dropped between 2000 and 2017 in Clayton County and a larger U-shaped area excluding the wealthier northern OTP, Immergluck also notes that poverty is growing in several of Atlanta’s southern suburbs, especially (and disproportionately) in Clayton, parts of south-central Dekalb, and Douglas counties on the southside.
Two commonly-heard claims about Clayton County’s shifting racial and economic demographic are that poor Blacks from Atlanta have moved into the county and forced whites out, and that people displaced by Hurricane Katrina are responsible for an increase in crime. Such claims fail to take into account factors that Red Hot City details, as well as more specific local events like Fort Gillem’s closure and contamination, the rush to invest in warehouse and trucking industries, and more speculative land uses like the proposed Roman United luxury hotel development. As of April, metro Atlanta was the nation’s hottest real estate investor market, with investors snapping up one of every three homes. That forced the median home price to $430,000.
To put that in perspective, the median household income in Clayton County was $49,460 in 2020. For that amount, the general rule of thumb for an affordable mortgage, according to Investopedia, would be $98,920 to $123,650. The median price that houses sold for in Clayton County last month, according to Rocket Mortgage, was $231,856—nearly double the highest affordable median home price for Clayton County residents.
Red Hot City places the blame for suburban Atlanta’s shifting fortune squarely with predatory large banks, greedy real estate investors, and local officials all too willing to grant homeowner- and renter- subsidized tax breaks to developers. This book gives readers context for what is happening in our own neighborhoods and offers much for Clayton County residents (and policymakers) to think about.
Read more of Dan Immergluck’s writing
Read King Williams’ article on Atlanta’s gentrification at Atlanta Civic Circle
Learn about affordable housing programs for renters and buyers from the State of Georgia and the U.S. Department of Housing and Urban Development
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