Rent Control Awareness?

Rent control was first imposed back in World War II in an effort to deal with a shortage of affordable housing. It didn’t work then, and it doesn’t work now, but it is still happening in several states. Fortunately, Georgia is not one of them. Under rent control, landlords are prohibited from raising rent rates to competitive market rates. This can totally destroy a landlord’s opportunity to maximize and enjoy real estate investment benefits.

Years ago I had a client from New Jersey, a rent control city. He was frustrated because he had owned a couple of apartment buildings that had long-term tenants in there that were underpaying rent and he could do nothing about it. The law didn’t even allow him to terminate the leases upon their anniversary. He had tenants that had been in there for more than 20 years. They were paying rent at rates that were market 20 years ago. With soaring property taxes and mounting maintenance needs on the aging buildings, he could no longer afford to keep the apartments. But he couldn’t sell because any new investor would inherit both the existing leases and the mounting cost of ownership. That would be a bad investment. His only option was to let the buildings go back to the bank. Not a great option. He was happy that Georgia statute prohibited rent control and I was happy too because I got the opportunity to help him buy some property, which I also got the opportunity to manage, mostly in the Roswell, Georgia and North Atlanta area.

While Georgia does currently prohibit rent control, see O.C.G.A. § 44-7- 19, that law could be changed. Indeed, Atlanta City Councilman Andre Dickens would like to do that right now. He notes that rental rates are climbing in the city and he thinks rent control is the solution. Check out this link to an article entitled:
Atlanta May Seek Waiver of State Ban on Rent Control to Curb Soaring Prices
https://saportareport.com/atlanta-may-seek-waiver-state-ban-rent-control-curb-soaring-prices/

If you have plans to invest in Atlanta, you definitely need to read this article.

Even if you don’t do business in the City of Atlanta, you need to be concerned or at least aware of what’s happening with rent control. Years ago we saw how local municipalities hopped on the bandwagon, one after another, with rental property registrations and inspections. Fortunately, that got shot down by the state legislature because investors and property managers made a big fuss about it. The same kind of thing could happen with rent control if it can get a foothold in the city of Atlanta.

The only way we can protect ourselves from this destructive way of thinking is to become vocal about the problem. Each of us needs to elevate this topic in our professional trade organizations. We need to be watching the municipalities in which we are invested or where we are intending to invest. We don’t want to wake up one morning and read headlines that our investments or property management businesses are ruined.

Daniel R. Wilhelm
Master Property Manager Designation (MPM)
3 Options Realty, LLC., CRMC®
678-397- 282
dan @ 3OptionsRealty.com
http://www.3optionsrealty.com

If you are looking for property management in the Atlanta Georgia area we would love an opportunity to talk to you about that. We’ve learned how to do that pretty well over the years. Best of luck to you in the real estate market!

Please give 3 Options Realty a call and we can discuss any investment objectives you may have - 678-397-1282.