Atlanta may seek waiver of state ban on rent control to curb soaring prices

By David Pendered

Atlanta may be preparing to open a third front in its price war against skyrocketing costs for rental homes in the city. The target would be Georgia’s law that bans rent control.

415 griffin, sept. 2016

This boarded-up home at 415 Griffin Street, near the Mercedes-Benz Stadium, sold for $40,000 in 2007, three years before the Atlanta Falcons announced plans for a new stadium. The house sold for $175,000 in 2015, according to Fulton County tax records. File/Credit: David Pendered

Atlanta’s strategy may be to ask the Georgia Legislature to carve out a niche where the state’s prohibition could be waived.

The niche could include neighborhoods where big public investments drive up nearby property values – investments such as the Atlanta BeltLine, Turner Field, Mercedes-Benz Stadium, and the future reservoir and park planned for the former Bellwood Quarry, located west of Downtown Atlanta

The council’s two other proposals in this price war are: Requiring new housing developments along the BeltLine to include affordable homes; and creating zones where current tenants could not be displaced by rent spikes. Both are expected to come up for a vote by the council in 2017, an election year for mayor and council.

This discussion is evolving as property prices in the city rise after the Great Recession. The increases vary dramatically from neighborhood to neighborhood, according to research by Georgia Tech Professor Dan Immergluck. Prices near the Falcons stadium are up 27 percent in the first nine months of this year, on an annualized basis, according to another report by Immergluck.

Citywide, Atlanta’s revenues from property taxes are expected to rise 3.9 percent between fiscal years 2014 and 2017, according to figures in the city’s budget for FY 2017, which ends June 30, 2017. Atlanta’s property tax digest is comprised of 46 percent residential and 54 percent non-residential.

Atlanta BeltLine, skateboard

The Atlanta BeltLine provides additional recreational opportunities in intown neighborhoods, making them more attractive and costly. Credit: David Pendered

Atlanta City Councilmember Andre Dickens said he is investigating opportunities to bring state lawmakers into the conversation over property rental prices in Atlanta. There’s only so much the city can do, Dickens said at the Nov. 29 meeting of the council’s Community Development Committee, which he chairs.

“A lot of folks always come to council people for stuff,” Dickens said. “We have state elected officials who could be lobbied and asked for some sort of exemptions or waivers from state law that does control rent control.”

At this point, Dickens unveiled his thoughts as to how such provisions could be crafted

  • “While we do understand property rights, and people should have the ability to maximize profits, in certain areas where a substantial public investment has been made you can make the argument that this public investment came from public dollars.
  • “I.e., the BeltLine. I.e., a stadium. I.e., a large lake or park or something like that. That could influence the property values that then say we can waive this rent control because we put forth a huge amount of public investment.”
Krog Street Market

The Atlanta BeltLine’s amenities created an environment where the Krog Street Market and residential developments thrived, driving up property values and rental prices. Credit: David Pendered

The Georgia Legislature isn’t bashful about creating these sorts of niches.

The sleight-of-hand is to write the waiver in such a way that it applies to only one jurisdiction. For example, in this case the waiver could apply to only the state capital; or a city with a closed-loop rails-to-trails project, such as the BeltLine; or a city with a certain population.

Such action isn’t likely in the upcoming legislative session that convenes Jan. 9, 2017. Sufficient groundwork hasn’t been laid to mount a campaign that likely would run into opposition from influential groups such as the Atlanta and Georgia apartment associations. But it could be presented in the 2018 session, an election year for state offices from the governor through the General Assembly.

Georgia’s code clearly prohibits rent control. In 1984, Georgia enacted the following law into the landlord and tenant section of the state’s property laws. The citation is 44-7-19 in the Official Code of Georgia Annotated:

  • “No county or municipal corporation may enact, maintain, or enforce any ordinance or resolution which would regulate in any way the amount of rent to be charged for privately owned, single-family or multiple-unit residential rental property. This Code section shall not be construed as prohibiting any county or municipal corporation, or any authority created by a county or municipal corporation for that purpose, from regulating in any way property belonging to such county, such municipal corporation, or such authority from entering into any agreements with private persons, which agreements regulate the amount of rent to be charged for such rental properties.”
andre dickens

Andre Dickens

Dickens said the amount of public investment in development in Atlanta may sway state lawmakers to consider allowing waivers or exemptions in the city to the state ban on rent control.

Longtime residents and tenants shouldn’t be displaced just because a public investment made their neighborhood more attractive to folks who otherwise wouldn’t have considered locating there, he said.

The next likely hotspot is around Turner Field, which is to be redeveloped into a mini city anchored by Georgia State University. For years, the Peoplestown neighborhood was little but a blighted community best known for flooding during rain events and a fight over efforts to control flooding.

“These areas don’t need to gentrify because of that large public investment,” Dickens said. “Let’s look at that. That’s something I’ll present to you all soon enough.”

 

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

8 replies
  1. Publicas says:

    This whole notion is misguided.  Prices on the Westside have not even recovered from where they were in 2007.  The majority of mortgage holders are under water.  See Zillow’s price estimates.  You can buy 3 bedroom 2 bath houses there for under $100,000. Gentrification?  You wish.Report

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  2. Ken Bleakly says:

    This is the worst idea the city could pursue.  I have studied rent controls effects in both New York and Miami and this idea is a failure on all fronts.  it has led to the current housing crisis experienced in New York, San Francisco and everywhere else it has been tried.  You can’t legislate the economics of the rental market without creating disincentives to the creation of new inventory, which is the only way you can solve the problem of higher rents.  Encouraging more new construction in affordable areas, with reasonable land costs, which includes most of the city, rehabbing and preserving single family and multifamily existing housing–10% of all units in the city are vacant, and providing a cap on property taxes for elderly owners which the city already does through its generous homestead exemptions, are much better strategies.  Rent control is not an answer to Atlanta’s affordable housing needs.  This is an old and unworkable idea that has failed in the cities where it has been tried.Report

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  3. Kathy Morrison says:

    What a truly horrible idea!  Another reason why there needs to be a house cleaning of the City Council.  More government intrusion into the free market has been proven to be disaster time after time.  We sure don’t want to become a New York.Report

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