Metro Atlanta becomes hotbed for real estate investors
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Companies that buy and rent large numbers of homes — and sometimes tack on fees and charge-backs that can drain tenants’ finances — are gobbling up large chunks of metro Atlanta’s already tight real-estate market.
Why it matters: Home ownership is part and parcel of the American dream and a key driver of wealth.
- Institutional investors and private equity groups scooped up cheap homes after the Great Recession and have benefited from the metro Atlanta's high demand for housing and lack of local regulations, experts said at yesterday’s Regional Housing Forum.
State of play: Large-scale institutional investors can move swiftly to purchase homes, often putting down cash offers to edge out traditional buyers. They then rent out those houses.
- In some cases, construction firms build single-family developments and sell them to institutional investors or private equity groups to offer as rentals.
Four companies — Invitation Homes, American Homes 4 Rent, Tricon Residential and Front Yard Residential — own more than 27,000 single-family homes in metro Atlanta, Desiree Fields, an assistant professor at the University of California-Berkeley, said.
The big picture: Institutional investors that own more than 50 homes dampened local homeownership rates in metro Atlanta, says Brian An, an assistant professor at Georgia Tech, with Black would-be homebuyers particularly pushed out.
- In South Fulton's 30349 ZIP code, investors made up nearly 60% of home purchases in 2021, according to a Redfin study and Washington Post report.
On the ground: In College Park, 65% of residents are renters, College Park Mayor Bianca Motley Broom told the forum, and a recent development project in her city that was planned as “build to sell” changed to “build to rent.”
- Cobb County Chair Lisa Cupid said the topic of affordability is a lightning rod among her colleagues and the community, and that investor activity creates disparities along with race and income.
What’s next: Earlier this year, Georgia House reps created a committee to study regulations and affordable housing before the next legislative session.
- Speakers at the forum said they expect institutional investor ownership of homes to be on the agenda.