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.

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 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.”

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.”

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.”