Atlanta Steps Up Blight Fight By Threatening 'Insidious' Landlords With Eminent Domain

Atlanta Mayor Andre Dickens is planning to utilize one of the most powerful tools local governments wield to combat chronic blight in the city: eminent domain.

The Atlanta City Council unanimously passed a resolution this month to request that the Dickens administration condemn eyesore residential and commercial properties in the city.

The idea to resort to eminent domain — in which the city can forcibly purchase a property at a court-determined fair market price if the sale is deemed in the public interest — came from the mayor's office, Chief Policy Officer Courtney English told Bisnow in an interview last week. 

“This is not a tool that we're looking to go after homes, for example. That is not what we’re doing,” English said. “What we're doing here is looking for those large multifamily properties, in some cases, that are in the middle of a neighborhood that have been blighted for 20, 30, 40 years.”

Property seizures would be the most aggressive step yet in Atlanta’s renewed efforts to crack down on absentee landlords or those allowing their properties to fall into disrepair. English said these buildings have become not only nuisances to communities but also pockets of crime and health hazards. 

Last month, the city council passed a blight tax, which allows the city to impose additional property taxes on an owner, up to 25 times their current rate if a property is deemed to be blighted, until the problems are rectified.

Neither enforcement tool has been used yet, English said, adding that the city is cobbling together a list of target properties that could be subject to the tax and eminent domain.

Dickens addressed the issue Monday during a press conference in Vine City, saying the city will use eminent domain “to take ownership of properties whose conditions are so harmful to communities that we simply cannot wait for ownership to take action.”

“We will continue to move with urgency to make our neighborhoods better,” Dickens said.

The pandemic gutted Atlanta’s code enforcement unit, with two-thirds of the Atlanta Police Department’s code enforcement staff taking other city jobs for higher pay, the Atlanta Business Chronicle reported. The department has been steadily restaffing since those lows, and Dickens said Monday, “We've come a long way since 2022.”

English told Bisnow last week that the city sees the threat of eminent domain as an opportunity to compel neglectful owners to redevelop their properties or sell to the city.

The net result could be blighted land that instead goes further toward Dickens’ goal of facilitating the conversion or construction of 20,000 affordable housing units by 2030. An area of particular focus is single-family houses that have been bought by institutional investors and turned into rentals. 

English said 33% of the vacant single-family houses in the city are owned by institutional investors, the types of companies that can afford to sit on vacant properties — unless they face a punitive tax or threat of seizure, which are now in place.

“That’s not a sustainable model at all,” he said. “We have affordable housing needs, and so we want to put those units back in service to provide housing for the million or so folks who are going to be moving to our region.”

John Ahmann, the CEO of nonprofit land development firm Westside Future Fund, said blighted properties have been a stumbling block for his organization’s efforts to redevelop properties it purchased.

“We've literally bought houses that we want to develop, but we know we can't because we're next to these blighted, dangerous structures,” Ahmann said. “Until those are dealt with, we're not going to get anyone to move into them.”

Dickens' office didn't provide an estimate for how many blighted properties are spread throughout the city, but English said it is likely in the thousands. 

A 2015 study by Georgia State University Urban Studies Institute professor Dan Immergluck estimated that the APD spent between $1.7M and nearly $3M annually on penalizing owners of vacant properties. The blight during that period cost the city single-family property values in a range of $55M to $153M, resulting in up to $2.7M in lost property tax revenue for Atlanta annually, according to the study. 

Boarded-up homes, undeveloped lots that are overgrown and filled with debris, abandoned apartment complexes and even the vacant, graffiti-covered Medical Arts Building in Downtown Atlanta could all qualify to be taxed at a punitive rate or seized, English said. He added that some “insidious” landlords are deliberately keeping their properties in blighted condition because they make the area around them less desirable, thus driving down neighboring property values.

“Then what you'll see is that these same investors will then start buying up properties with the intent of flipping those properties for significant profits or trying to redevelop them,” English said. “This is not everybody, but there's a certain crop of really, really bad actors who know exactly what they're doing. We have to remove that profit incentive.”

Last year, APD code enforcement began a program to allow residents to anonymously report properties with code violations. As of May, the program led to enforcement on 27 properties in the city, all of which were highlighted by The Atlanta Journal Constitution’s Dangerous Dwellings series, Atlanta Civic Circle reported.

One of the largest commercial real estate organizations in the state, NAIOP Georgia, threw its support behind the mayor’s attempts at addressing chronically blighted properties in the city.

“NAIOP, as a commercial real estate development association, is always in support of creative solutions that are aligned with demands for how people work, live, shop, and play,” NAIOP President-elect Greg Boler said in a statement to Bisnow. “We believe that the City providing incentives for owners of blighted and vacant properties to pursue ways to positively activate their built environment, as it is the fabric of our communities, will be advantageous long-term for Atlanta.”  

Atlanta has seen a huge influx of money and investors chasing residential properties in recent years, especially in areas on Atlanta’s Westside and around the Atlanta BeltLine. Housing prices in the Atlanta metropolitan area have increased by 141% over the past 10 years, according to Federal Housing Finance Agency data.

The Westside Future Fund is in support of Dickens using city funds to buy blighted properties in its purview, Ahmann said.

Since its creation in 2014, the Westside Future Fund has purchased $25M in vacant and blighted land to develop new apartments and affordable single-family housing. The nonprofit also raised $30M in a recent capital campaign to build more housing on 20 acres of undeveloped land on the Westside, Ahmann said at Monday’s press conference.

Ahmann said eminent domain, which he described as “a tool of last resort,” and the blight tax can be used to hammer landlords and property owners who refuse to either keep up their properties or sell.

“It’s not only stepping up the enforcement actions, which [the city is] doing. You have these owners who need more of an economic incentive to sell their properties or develop them,” Ahmann told Bisnow. “The health impacts of blight in the neighborhood, not just physical impact, but I can tell you, living in the neighborhood, what it says to you when you walk past a vacant structure. It says to you, ‘No one cares.’ So it's a huge psychological impact for the community.”

Margaret Stagmeier, the managing partner of Atlanta nonprofit affordable housing developer and operator TriStar Real Estate Investment, said the city needs to discourage absentee and negligent landlords from prioritizing “speculation and profit” over a neighborhood’s overall health. 

“Blighted properties not only look unsightly and invite criminal activity, but they can place a significant burden on the local neighborhood, municipal services and school system,” she said in an email. “So I am in favor of the use of eminent domain as a way to keep property owners accountable and neighborhoods thriving.”

But legal experts say it won't be easy. Not all owners are willfully neglecting properties — some don’t have the money or resources to pay for upkeep, said Josh Belinfante, a partner with Atlanta law firm the Robbins Firm. Other owners may think the capital spent on improving a property wouldn’t be returned in a sale or ownerships may be tangled up in a dispute, providing a further disincentive to spend money. 

“A blighted property may be occupied unlawfully by squatters, or it may be occupied by paying tenants that commit criminal activity on the property,” Belinfante said in an email. “I’ve known landlords facing that kind of issue, and they have fears for their own safety if they were to attempt to evict the persons occupying or using the property.”

Belinfante served as legal counsel for the Georgia House of Representatives Committee on the Judiciary in 2006 when then-Gov. Sonny Perdue pushed members to update state statutes to prevent local governments from using eminent domain for purely economic development reasons. House Bill 1313 came on the heels of the U.S. Supreme Court decision in Kelo v. city of New London, Connecticut, which allowed states to determine whether local governments could condemn and seize property from private owners for economic development reasons.

It is a code that stands today in state law, Belinfante said. That means for Atlanta to condemn a property, it has to prove in court that the land or structure meets one of a number of standards of blight: unsafe, uninhabitable, an imminent threat to life, a federally designated Superfund site, a hot spot for repeated illegal activity, and chronic code and ordinance violations one year after the initial warning. The property also must pose those same risks to properties around it, Belinfante said. 

“Any government that seeks to condemn property on the grounds that it is blighted must demonstrate to a court of appropriate jurisdiction that these criteria are met,” he said. “That’s obviously going to be easier if there is no property owner there to challenge the government’s position.”

The city has used eminent domain before to demolish a blighted commercial property, and it set off a lengthy legal battle. 

In 2022, Atlanta condemned the Forest Cove apartments after years of complaints and code violations for mold and rodents and hundreds of police responses for crime, including homicide. But the then-owner, Ohio-based The Millennia Cos., fought the move in the courts. Millenia, through its subsidiary Phoenix Ridge, purchased the complex in 2021 and vowed to conduct a $58M renovation with the help of tax incentives, which the company claimed the city blocked it from achieving.

Two years later, a court sided with the city, which was ultimately allowed to relocate residents and bulldoze the property.

Christian Torgrimson, a partner at Parker Poe and a prominent commercial real estate attorney in Atlanta, said landowners and landlords will put up a fight against the city if it attempts to condemn blighted properties, particularly the same institutional owners Dickens said he plans to target.  

“I think there’s probably a good chance a court will give [landlords] the benefit of the doubt,” Torgrimson said. “I see a lot of challenges coming out of this, especially if these properties are owned by corporations that this is part of their businesses.”