Federal law could ease private equity’s grip on Atlanta housing market
A federal law limiting the number of houses that can be snatched up by private equity firms could have a major impact on prospective homebuyers in metro Atlanta.
The new measure, which became law over the weekend, caps the number of houses that can be purchased by real estate investors at 350 going forward, U.S. Sen. Raphael Warnock told reporters Monday.
Standing in front of a three-bedroom Adamsville rental owned by a private equity firm, the Democratic senator was joined by Mayor Andre Dickens and Atlanta City Council member Andrea Boone, both of whom grew up in the Westside community.
“They are picking houses the way you pick tomatoes at the grocery store,” said Warnock, calling Atlanta “ground zero” of corporate homeownership.
Metro Atlanta as ground zero for corporate homeownership is the same conclusion reached in a 2023 Atlanta Journal-Constitution investigation, which found five companies each own more than 10,000 homes for rent in metro Atlanta. The companies tend to use algorithms and cash to quickly buy entry-level homes, particularly in communities of color, and turn them into rental units, the AJC analysis found.
It’s a pattern, experts say, that exacerbates the wealth gap by making homeownership, the most common method of building generational wealth, more difficult and expensive.
At Monday’s news conference, the house behind Warnock and Dickens “should be owned by a person and not a corporation,” Warnock said. Instead, the 1,200-square-foot home is listed on Zillow for $1,840 a month.
Warnock said he hopes his provision to the bipartisan 21st Century ROAD to Housing Act will help “stop the spread” of private equity firms buying up single-family homes in cities across the U.S.
The new law is not retroactive, meaning metro Atlanta’s estimated 72,000 investor-owned homes will remain the property of the corporations that purchased them, Warnock explained.
He said the White House sought to cap the number of corporate-owned homes at 1,000, while he pushed for 50. In the end, they compromised on 350, according to Warnock.
“I didn’t get everything that I wanted, but I think we got some good things done here for Georgia and for metro Atlanta,” he said.
Companies that violate the new law face steep financial penalties. That includes fines of up to $1 million per house beyond the 350-home cap, or three times the purchasing price, whichever is higher, Warnock said.
Dickens, who has made affordable housing a cornerstone of his time in office, called it “landmark legislation” that will make the city’s housing initiatives more effective.
“These families can have the protections that they need,” the mayor said. “Their community isn’t going to keep getting bought up by Wall Street.”
Boone said she hopes the measure will make it easier for Atlanta’s working families to finally obtain that “piece of the American Dream” that has been just beyond reach.
“Our communities are not investment portfolios,” she said.
The elected officials were joined by Jacob Parcel, a barbershop owner and father of two who said he’s been trying to purchase a home for two years.
“I spend my days talking to people of all walks of life, and the conversation that comes up the most is how hard it’s become to afford a place to live or to buy a home,” said Parcel, who lives in Smyrna with his family.
Even legacy residents said they’re surprised by the turnover they’re seeing in Adamsville, as families are constantly forced to relocate for more affordable rent.
“We don’t really get to know our neighbors because they come in and they leave so fast,” said Lavonia Manns, a retired Atlanta Public Schools nutritionist who has lived on the street for five decades.