COVINGTON, Ga. — Data from Redfin, which was analyzed by The Washington Post, shows investors purchased one in every four homes across the Atlanta metro area in 2021, including Newton County.

Locally, investors last year bought nearly half (49%) of the available homes for purchase in zip code area 30016 (west Newton), about 31% of available homes in the 30014 (city of Covington and east Newton) area and 13% of available homes in the 30054 area (north Newton, south Walton).  

Real estate investors are not limited to major corporations. Some are local companies or even individuals. Regardless, data shows investors generally don’t live in the properties they buy. Instead, most rent the properties out while others aim to flip the homes to new buyers.

After numerous calls of concern, Covington Mayor Steve Horton said during a June 12 council meeting, city leaders are now working to curb such investor-owned and “build-to-rent” developments.

The apparent concern among officials in communities across the metro was that the option to buy homes for owner occupancy would evaporate. And if the market is not regulated, all that would be available is rental housing. And this would also drive up the value of those remaining homes available for owner occupancy.

Members of the council voted 4-2 to initiate the text amendment process to determine how the city could best regulate or restrict such developments “in all or certain areas of the city.” Council members Charika Davis and Kenneth Morgan opposed.

City Attorney Frank Turner Jr. said he and Planning Director Marc Beechuk, among other city staff, would work to see what other communities are doing and garner legal opinions to develop an amendment satisfactory of the council.

“So the regulation would [likely] say, ‘In these areas or zones, they are allowed, and in these areas or zones they are not allowed,’” Turner said. “That’s what other jurisdictions have done to try to address it. And the public policy is that you’re trying to increase homeownership. Our rental rate is higher than the state average already, and this would obviously make that higher and higher.”

Councilman Anthony Henderson said he wanted staff to look at adding affordability requirements within certain areas that build-to-rent developments would be allowed to continue, as part of a potential text amendment.

As the council voted to initiate a text amendment, Horton adamantly reminded the council and public that no changes would be made until after a formal proposal is presented to the Planning Commission and then back to the council for approval.

The council also approved a moratorium on new developments through Sept. 19 by a vote of 4-2 “to allow more time to discuss and determine action needing to be taken without more developments able to come in,” Horton said. Davis and Morgan, again, opposed.

Other cities are reportedly working to address the issue.

According to a June 1 report from the AJC, Atlanta Regional Housing Forum officials said in a recent meeting “they hope to use their land use and zoning powers to limit the spread of ‘build to rent’ development, but some fear that their tools to do so could be taken away.” 

State lawmakers blocked cities from establishing a landlord registry, the report stated, and a bill proposed earlier this year that “would have barred city governments using land use and zoning powers to regulate rental properties.”

Morgan said he opposed due to how city staff presented the issue to council.

“That’s [the build to rent issue is] important to everybody. That’s important to me,” Morgan said. “But what I have a problem with is when it seems as though staff only hear certain council members, but they don’t hear others. 

“I can go back right now and relate and talk about certain things that I have brought up as an individual council member, and the first thing the city manager would say is, ‘Oh, well we need a consensus from everybody on council before we move forward.’ But then we can come tonight and we can put something on the agenda when we didn’t have a consensus from everybody. So I think we have a lot of things going on that needs to be addressed.

“It’s simple, little bitty things like this that makes it divisive,” he continued. “It makes it look like it’s not the way it’s suppose to be. When you can get certain ones and get what they want accomplished, and when others want something done, it’s not accomplished.

“And then you’ve got people in the community that will come — we were talking about the [build-to-rent issue] tonight — when they come in here and they’re buying up all these properties in the city, and they don’t live in these neighborhoods,” Morgan added. “But they’re buying up these properties and the only reason they’re buying them is because they want to use them for AirBnB.”

The council recently adopted an ordinance amendment to allow short-term rental properties with few regulations. Initially, the city proposed there be a limited amount of short-term rentals throughout the city, but such limitations were struck from the ordinance after several resident property owners voiced their disapproval.

Morgan ended his comments by challenging every council member to look inward and consider how they are serving on the council.

“My whole thing about it is, we’ve got issues that need be addressed, but we need to make sure when we address this issue, we address them openly and honestly as we can. Not with personal agendas,” he said. “We’ve got to make sure we’re concerned not just about one part of this city but every part of this city … We all, as individuals need to look at ourselves and realize why we are here and who we are representing.”

In a work session before the meeting, Davis said it had appeared this issue had only become a concern after residents from the east were seemingly affected.

Councilwoman Susie Keck said her concern was for the entire community, not just one portion of the city or one group of people.

Councilwoman Fleeta Baggett challenged Morgan’s comments that led to a brief, contentious exchange between the two.

“I am so upset,” Baggett said. “Because you throw the race card every chance you get.”

“It’s not a race card,” Morgan said. “I didn’t say race.”

“Yes, sir, it is,” Baggett said. “You don’t have to say it …”

Data, however, shows race does play a factor in the issuen nationally and locally. Neighborhoods where a majority of residents are Black have been heavily targeted, according to the Washington Post’s analysis of Redfin data. Last year, 30% of home sales in majority Black neighborhoods in metro areas nationwide were to investors, compared with 12% in other zip codes.

Locally, a majority of residents in zip code area 30016 — where investors purchased 49% of available homes in 2021 — are Black. In the other two areas (30014 and 30054), where there is not a Black majority, the investor purchase rate was 36 and 18 percentage points less.

For more information about Redfin, visit https://www.redfin.com/.