Lina Khan, the chair of the Federal Trade Commission, listened to concerns about abuses in the rental housing market during a meeting in Atlanta attended by Georgia officials, legal experts and housing advocates.
“We’ve heard that Atlanta has really been Ground Zero for institutional investors kind of swooping in and buying out housing,” Khan said to media after Friday’s listening session at Georgia Tech. “There are a whole set of pain points that people are facing as a result of that.”
The Atlanta Journal-Constitution published the American Dream For Rent investigation last year, which found metro Atlanta was indeed ground zero for private equity firms and publicly traded companies buying single family homes, converting them into rental properties and bundling them into complex investment vehicles — making home ownership more difficult for middle-class and first-time buyers.
Khan also addressed the impact of rental pricing by an algorithm used by the Texas-based company RealPage, in response to a question from the AJC. President Biden’s Justice Department has reportedly deepened its price-fixing probe into RealPage over its rental pricing software and whether it colluded with landlords to raise rents.
Last month, the FBI searched the Atlanta office of Cortland Management, a multifamily property developer, as part of the Justice Department’s investigation “into potential antitrust violations in the multifamily housing industry,” the company confirmed.
Cortland, which said neither the company nor its employees were targets of the probe, is one of several corporate landlords facing civil litigation for their alleged role in a purported nationwide conspiracy to fix and inflate rental prices for multifamily homes.
“It’s something that we have to monitor very closely,” Khan said. “We see that these AI tools and algorithms can provide all sorts of benefits, but they can also create risk and they can also create opportunities for businesses to break the law through new tactics and means.”
She added that there is “no AI exemption to the laws on the books” when it comes to price fixing.
Taylor Shelton, an assistant professor at Georgia State University who attended Friday’s listening session with Khan, said in an interview before the meeting that he was “cautiously optimistic” about the results of the federal government’s investigation into RealPage, and dozens of class action lawsuits around the country.
The investigation underscores the problem of corporate landlords taking control of the housing rental market, leaving renters with few choices of other places they can go to find better prices, Shelton said. The algorithmic price setting under investigation by the Justice Department is contributing to more and more money being taken from working people and falling into “the hands of these hedge funds and investors,” he said.
Of 20 major U.S. cities, Atlanta has the largest share of investor-owned single-family rental properties, according to a recent report by the U.S. Government Accountability Office.
Shelton said his research shows that three landlords own 11% of all single-family rental properties in Fulton, DeKalb, Cobb, Gwinnett and Clayton counties.
Alison Johnson, executive director of the Housing Justice League, also attended the listening session. Before the meeting, she said in an interview that one of her biggest priorities is advocating for Senate Bill 125 in the next Georgia General Assembly session. The bill would repeal the state’s ban on rent control, empowering local governments to implement such policies.
Johnson also is concerned about “junk fees” charged against tenants. Examples include charging tenants for throwing their trash in a dumpster or for using the pool at a residential property that had described the pool as one of its amenities.
Often, she said, landlords charge $500 in total administrative fees to renters.
“Our main focus is expanding tenant protections and the need to control corporate investors that are taking over these communities,” Johnson said. “There’s a housing crisis in Georgia — the nation, too. People can’t afford to live.”
Johnson said the Housing Justice League is holding a public meeting Saturday where politicians, renters and advocates for renters will discuss the importance of SB125. The gathering starts at 11 a.m. at In His Image church at 630 Kurt Drive SW, in Cobb County.
