Reed to ATL homeowners: Don't sell cheap to 'predatory purchasers'

The fund, which launched in April, is expected to raise around $5 million for Vine City, English Avenue and other West End Atlanta neighborhoods.

“We are going to have to take more direct action along the lines of what we’ve done with the Westside Future Fund in terms of our Anti-Displacement initiative,” he said in an exclusive interview with The Atlanta Journal-Constitution. “We thought that modeled needed to be replicated.”

Reed said he is especially concerned about so-called  “predatory purchasers” -- real estate entrepreneurs and companies hoping to cash in on growing interest in moving into the city -- who might coax residents to sell their houses well below their value. He cautions homeowners to think twice about selling, no matter how tempting the offer.

“It’s a simple message,” he said. “You own something that is extremely valuable. Don’t sell it when someone knocks at the door.

“You got to know whatever they’re offering for your property is less than what it will ultimately be worth because they (buyers) have to make a profit,” he said.

Atlanta house prices have risen sharply in the last five years as millennials, empty-nesters and fans of urbanization have moved into the city, a contrast to decades of suburban flight, according to experts.

Communities along the Beltline have boosted the trend, turning once overlooked neighborhoods such as Old Fourth Ward into sought after addresses.

Median property values along the Beltline surged between 2011 and 2015, including a 68 percent jump in southwest Atlanta, according to an analysis by Dan Immergluck, a professor at the Urban Studies Institute at Georgia State University.

Property taxes within a half-mile of the Beltline’s southwest development increased almost 59 percent between 2011 and 2015 compared to a 32 percent increase for southwest Atlanta houses farther away from the trail, the study found. Immergluck completed when the study while still at Georgia Tech, his former employer.

“We like the hype of the Beltline, but there is a downside to it,” Immergluck said.

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In addition to raising private donations, Reed said he also is considering instituting restrictive covenants. Such covenants, which put restrictions on land use and value, have been challenged in state courts over the rights of landowners to control property as they see fit.

“What you really need is a restrictive covenant around the Atlanta Beltline, which I think is justified by the enormous public investment,” Reed said. “The challenge is you have state laws that really prevent your ability to have price controls in Georgia.”

Reed said the city also will have to continue to seek out federal, state and private partnerships meant to address affordability, such as a $30 million grant the city received from the U.S. Department of Housing and Urban Development in 2015 to revitalize portions of west Atlanta.

The city also renovated 74 houses last year in the Mechanicsville area with the help of funds from the state Department of Community Affairs, the nonprofit SUMMECH Community Development Corp, Columbia Residential and Brock Built Homes.

Additionally, the city can use its large land holdings to leverage housing that can be purchased by teachers, police officers and firefighters, Reed said.

“When the Morris Brown College was up for sale, there was a real fear that it would be mismanaged and people would be pushed out,” he said. “We acquired it as a hedge against affordability so we now have 24 acres in the heart of the city.”

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