American Dream For Rent: Investor homes spark neighborhood tensions
Suburban Atlanta home owners clash with firms buying, building single-home rentals.
The sun is bright and the sky blue, but the tennis courts at Parkview Estates are unusable, with deep cracks in the playing surface. Not far away is the basketball court, hardly worth the name, its lone backboard lying on the ground.
The nearby swimming pool is locked up — and has been for more than a year.
The busted amenities of this city of South Fulton neighborhood of mostly two-story brick houses are the most obvious signs of deeper tensions between homeowners and an Atlanta real estate firm that bought up lots and about a half-dozen houses and plans to build at least a hundred more to rent.
Credit: HYOSUB SHIN / AJC
When some of the 58 Parkview Estates homeowners retained lawyers to oppose those plans, the company denied them a vote on the homeowners’ association and shuttered the pool and other amenities for owners and renters alike, said Pernell Evans, who bought his house in 2008.
Parkview Estates is part of the big investor rush that gobbled up land for build-to-rent houses and turned thousands of metro Atlanta homes into rentals. In many metro neighborhoods, entrenched homeowners fear neglect from absentee corporate landlords and say homes and even neighborhood amenities have fallen into disrepair when Wall Street becomes their neighbor.
The investor-owned rentals account for just a fraction of the metro Atlanta housing market, but in some neighborhoods, the presence is large and character-changing. An Atlanta Journal-Constitution investigation found that more than 65,000 homes have been purchased by corporate investors since 2012, driving up housing prices and pushing the American Dream of homeownership out of reach for many.
Parkview Estates got its start in the early 2000s, at the tail end of the housing boom, when a developer bought hundreds of acres about 10 miles west of Hartsfield-Jackson International Airport. The firm built dozens of homes, saving a handful to rent. As the bubble burst, the builder stopped building. The land was sold in 2021 to ResiBuilt Homes, an Atlanta-based company with plans to finish the subdivision as rentals.
Homeowners were troubled by the prospect of an expansion that added smaller, lower-quality homes, Evans said. That, combined with the lack of maintenance on neighborhood amenities, has homeowners worried.
“Homeowners are concerned about losing their investment,” he said. “We love our houses.”
When homeowners sued, ResiBuilt played hardball. The original developer granted control of the homeowners’ association to ResiBuilt, which closed the pool and let other amenities deteriorate to strong arm neighbors into dropping their suit, the plaintiffs say.
ResiBuilt, the 17th-largest investor owner of single-family homes in metro Atlanta, did not respond to requests for comment.
Renters across the Atlanta area also blame companies for being slow to respond to problems. They described broken pipes and air conditioning systems that took months for landlords to repair, and other unfixed problems that made their rental homes eyesores.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
It’s the business model, they say, to offload repairs onto tenants, while keeping costs low on administration and maintenance as the monthly flow of rent checks rolls in.
The growing presence of renters in traditionally owner-occupied neighborhoods, though, also has exacerbated tensions between individual owners and renters.
Some concerns are about appearances.
“I call him ‘park-on-the-grass guy,’” said homeowner Mike Donithan, who went to talk with a renter to complain about a situation that violates South Fulton code. “The guy said, ‘I didn’t know,’” Donithan said. “And then he went back to parking on the grass.”
At least in South Fulton, local officials sided with owners, blocking the Parkview expansion. A separate lawsuit between the city and ResiBuilt is wending its way through the legal system, although preparations for construction have continued. Workers for ResiBuilt have cut roads and a roundabout into the red clay along with pipes to serve a phase of future rental houses.
Credit: HYOSUB SHIN / AJC
‘Good luck getting in touch’
Sometimes, as in Parkview Estates, investors aim to add houses to a neighborhood, building them with the purpose of renting them. Sometimes investors enter a community, buying existing homes and turning them into rentals.
More than 40 miles northeast of Parkview Estates, a Lawrenceville neighborhood has both.
The 172 houses in Grayland Hills include about 10% that were purchased by investors and are rented out. Just across Pew Creek are newer rental homes on August West Way, Cassady Lane and Stella Court.
Metro Atlanta home values have risen across the board from 2012 to 2022. But the AJC’s analysis found they climbed more sharply in places where investors own more houses. In the 30 ZIP codes with the most investor-owned properties, home values appreciated at nearly twice the annual rate as the 30 ZIP codes where investors own the least.
“The companies renting have started to prefer new homes because you don’t have to do any work, there’s a lot less maintenance,” said Kelly Kim, an agent at Ansley Real Estate.
But in a strong housing market, renters can see consistent and frequent rent hikes, especially in newer homes, something of an incentive not to stick around.
Credit: HYOSUB SHIN / AJC
David Gonzalez climbed out of his truck one raw and rainy afternoon in early December, coming home from a construction job to the August West Way house he’s been renting. He said he’s happy with the house, except for the rent, which has climbed from $1,500 to $1,800.
“I’ve seen lot of people go in and out. And I won’t be here much longer,” Gonzalez said, citing rising rents.
Lauren Dastrup lives with her family in an 1,800 square-foot house in a cul-de-sac surrounded by rentals. She said it is sometimes obvious which homes aren’t owner-occupied, especially those with a lot of cars.
“Porches fall apart. Roofs need to be repaired,” Dastrup said. “And the owner is a corporation that doesn’t care.”
The area does not have a homeowners association, which means no organized watchdog to monitor abuses.
“The companies renting have started to prefer new homes because you don't have to do any work, there's a lot less maintenance."
Stephanie Henriksen, president of the HOA at Cramac Plantation, west of downtown Lawrenceville and a little more than a mile from August West Way, said when a home is in disrepair, even an active HOA like hers has trouble finding the far-off corporate owners.
“Good luck getting in touch with the people who own those homes,” Henriksen said.
Her group recently called in the city to deal with a rental that sometimes had 10 or more cars in the driveway and street. There’s a legal limit of four, she said.
“It wasn’t even an HOA rule,” she said, “that’s city code.”
That is typically how city officials hear about problems, said Chuck Warbington, Lawrenceville city manager.
In response, the city has made changes to its regulations. Now, if there are any code violations, the city takes both renter and owner to court to get them resolved. And when there is a residential re-zoning, the city limits rentals to 10% of the homes affected.
“When there is a clustering of those homes,” he said, “it becomes an issue to the overall community.”
In Grayland Hills, Camille and Patrick Cagle pay a little over $1,800 a month for one of six or seven rental homes on their street. They like the area and the house, but then a pipe broke in their basement, and they tried to contact their landlord, Main Street Renewal, the third-largest owner of single family homes in metro Atlanta.
Credit: HYOSUB SHIN / AJC
“I’d call and tell them about it, and wait,” Patrick Cagle said. “Then I’d call and tell them about it. And wait. ...No one called back. No one emailed.”
They got a response only after contacting some executives. By then, it had been 78 days.
“There was standing water in the basement,” he said. “And if the damage didn’t get repaired while we were there, when we moved out, we’d get charged for it.”
Main Street Renewal is part of the Amherst Group, a real estate investment firm. Amherst said a glitch in its internal system delayed its handling of the basement leak for about two and a half months.
State Sen. Nikki Merritt, who represents Grayland Hills and August West Way, said she wants the law to make it easier to make absentee corporate landlords accountable for problems.
“I’m not against rentals,” she said. “The landlords are the problem. The Wall Street folks who have found themselves a new cash cow.”
A proposal before the legislature last year would have tied the hands of local officials in restricting rentals. The measure was shelved, but a new version was filed this week in the state Senate.
‘Blindsided’
In the meantime, some owners look around at the rentals, consider the impact on their own assets and head for the exits.
Jonah Ndukwe, a former Parkview Estates resident, really liked his house and the South Fulton neighborhood. But he sold and moved to Cobb County a year ago, fearing the developer’s plans to build rentals.
“I would have probably moved anyway, but that sped up the process for me,” he said.
The neighbors he left behind in Parkview Estates have continued to grapple with their concerns.
Owners dropped their own legal effort to stop developers when the expansion was blocked by the city, which is now tussling with ResiBuilt in court.
“We were all blindsided when they started cutting down trees,” Donithan, a Parkview Estates owner, said during a crisp autumn walk.
In the distance, grading machines seemingly prepared for an end to the legal obstacles to expansion, scraping out new streets for paving.
John Perry, technical director of the AJC’s data journalism team, contributed to this article.