Street Level Provides a Different View of Atlanta Gentrification

houses across the street in SW, one an abandoned Vision Property Management home, the other a newly gentrified home

Atlanta   Visiting families involved with contract for deed agreements with big companies like Harbour Portfolio Advisers, Vision Property Management, and SG Capital in Atlanta turns out to be a much, much different experience than similar doors I’ve hit in recent months in Pittsburgh, Akron, Youngstown, and Detroit. The song is still basically the same, but the verses are different.

Yes, the contracts are “as is” with the burden of repairs, taxes, insurance, and everything else in the usual package on the buyer without any of the guarantees or protections of conventional home buying, but in Atlanta at least the “as is” is more than we have found elsewhere. There were roofs to fix, some with trees still protruding through, and sewer lines to wrangle and HVAC problems common in the South, but fewer homes where families were “camping” in homes stripped bare of wiring, plumbing and the works. In the outer reaches of Fulton County, my team had visited with families with home prices in the $20s and low $30s, but in southwest Atlanta where I spent most of my time yesterday the numbers tended to be high $30s and up to $50 and $60,000. Other teams in DeKalb and Clayton County were spread out with a wide range of prices.

barb wire protecting a vision house

Southwest Atlanta was a surprise to me. I’d been on the doors in Atlanta before, but when I started adding up the dates as I navigated BatchGeo from home to home on my visit list, it had been in the twenty to twenty-five year range. I used to tease people in New Orleans who moved to the suburbs of Jefferson Parish that if they were going to do that, they might as well live in Atlanta. On the doors though I found myself in the city, not 8 miles from the Capitol, in hills green with trees and huge quarter-acre home lots, where I sometimes thought I was in the country. I also found blocks where five or six houses might be abandoned, boarded, and collapsing, and a couple of blocks over areas that were knocking on the door and opening it to gentrification. For the first time I was talking to contract buyers who were debating whether or not to try and figure out a way to sell their houses after the four or five years they had been in Vision or Harbour properties because appraisals had doubled and tripled the valuations, and in the words of one, he might be able to do better farther out in the country.

a Harbour house

In one area, I was within walking distance of a MARTA stop, the Belt Line, a huge urban renewal project on an old rail line, and a big park. One Vision house I hit was abandoned across the street from a home so recently redone that the squares of newly laid lawn were still visible from the planting. Dumpsters were dotted here and there.

I hit one Vision property on my list that looked abandoned on its hillside double lot. As I was parking a man was opening a padlock on the door, but he turned out not to be the owner. He was a burgeoning landlord who had just closed on the house. He had bought it from New Western Investment which had bought a package of homes from Vision. He was originally from Rwanda but in the country for many decades and had just gone into real estate full time over the last year with 20 properties now. His plan was fix and flip. He pointed down the hill to the neighborhood I had just left, as already having gone past the tipping point of his price range from gentrification pressure, but he was betting on this area to be next.

The census track says this area is 89% African-American and has stayed that way even as home evaluations have leaped forward by several factors in recent years. I was navigating streets named after Martin Luther King, Jr. and Ralph Abernathy, the Atlanta-based SCLC civil rights icons.

No matter what the color, the gentrification class is the same. Families our teams were seeing in the far reaches of Fulton, DeKalb, and Clayton had roots on the blocks I was walking now, but the time even under a rent-to-own contract that they could imagine owning a house here was fading fast.

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Government at all Levels Needs to Act on Contract Purchase Predators – Now!

New Orleans   Advocates and lawyers are firing more and more bullets at contract purchase predators and the Home Savers Campaign has raised the ante on its demands to Fannie Mae (FNMA) in yet more signs that the offensive against these real estate robber barons is gaining increased traction.

Another front has opened with the filing of a lawsuit by Fair Housing Center of Central Indiana at the end of May. They went after local operator Empire Holding Company and its subsidiary Rainbow Realty, that has acquired over 1000 dilapidated houses in the Indianapolis area and is marketing them as contract purchase rent-to-own properties. The owner admits that virtually all of them are uninhabitable. The Fair Housing Center argues that they are breaking a pile of laws, but also makes the claim that a huge percentage of these houses are in African-American areas and that the contract sales push is directed at these same populations in a discriminatory manner.

Sarah Mancini and Margot Saunders, both of the National Consumer Law Center, and experts in this area, make a similar case in looking at the metro Atlanta area in an article pointedly entitled, “Land Installment Contracts: The Newest Wave of Predatory Home Lending Threatening Communities of Color,” in a recent issue of Communities & Banking. They call attention to the work of the Atlanta Legal Aid, saying,

Atlanta Legal Aid attorneys conducted a search of property tax records in six metro Atlanta counties and found 94 properties currently held by Harbour Portfolio in the Atlanta area; most of these homes were likely being sold through land installment contracts as that is Harbour’s business model.9 Nearly all those properties (approximately 93 percent) were located in census blocks that are at least 60 percent nonwhite, and a significant majority were in census blocks that are at least 90 percent nonwhite.

It’s hard to avoid underlining the obvious. First, the scale of this activity is huge, when you are talking about a local company in Indianapolis alone handling more than 1000 such houses. In an evil local market, they dominate any other national players. Secondly, these are not equal opportunity predators, but are de facto discriminators.

For these reasons and others, the Home Savers Campaign is also increasing the pressure by sending a letter to the head of Fannie Mae today, asking that the agency investigate and bar not only Vision Property Management, as they did recently, but also Harbour Portfolio. In addition the campaign named a number of companies using the same practices in the Detroit market and demanded that they also be barred, indicating as well they they wanted a meeting with FNMA in order to push for clearer standards to block access to government auctions in the future to any company that plans to sell them “as is” through land installment contracts. Home Savers Campaign also indicated that it intends to make similar demands city to city in other markets for FNMA bans, as they understand the FNMA criteria better.

It’s bad, and it’s on!

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