Stockbridge moratorium to stop construction of single-family home rental subdivisions

Stockbridge leaders on Tuesday passed a moratorium prohibiting the construction of built-to-rent subdivisions.
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Stockbridge leaders on Tuesday passed a moratorium prohibiting the construction of built-to-rent subdivisions.

Stockbridge is pulling the welcome mat from under the feet of developers of single-family subdivisions where houses are put up for rent, not for sale.

The Henry County community passed a mortarium earlier this week after Pineview — a recently approved development on the city’s north side — switched from selling new homes under construction to renting them.

Sale prices for the homes started at $200,000. They are now being rented for $1,600 a month.

City officials say the subdivision’s original developer, Kerley Family Homes, never disclosed that the development would be turned into rental properties when it applied to construct the project. The 75-home community is now being advertised by American Homes 4 Rent, a California-based house leasing company that lists properties throughout metro Atlanta.

“There are no for sale signs anywhere,” said City Councilman Elton Alexander, who is also a realtor. “All of the homes in this development, it appears, would be rentals. This is outrageous in every way.”

The city council’s move comes as the built-for-rent home market is facing the same supply headwinds as the overall housing market. COVID-19 dramatically slowed construction of new homes in 2020, tightening the available homes for purchase.

At the same time, fewer homeowners than usual have put their houses on the market, opting to stay put during the pandemic.

“This is very wrong,” Councilwoman Lakeisha Gantt said, adding that original builder came before the city seeking approval for the project several times.

The moratorium will be in place for six months, during which leaders will try to prohibit built-to-rent single-family housing projects in zoning laws.

The switch to rental homes is legal because the city did not prohibit it under earlier zoning guidelines, city leaders said.

“Our city attorney will try to figure out how we can design an ordinance to keep this from happening again,” Gantt said.

American Homes 4 Rent could not immediately be reached for comment.

The subdivision was approved for 75 houses about two years ago, but only about 35 homes have been constructed thus far.