Investor purchases endanger Athens affordable housing

By Lucinda Warnke

Editor’s note: This story is part one of a three-part series on the housing crisis in Athens. The series explores who is impacted, how the crisis happened and what the community and local government have done to mitigate the impact. Part two can be read here, and part three can be read here.

Juana Hulin was moving up in the world. A single mom of three, Hulin worked hard to build a life for herself and her daughters in the pine-shaded Highland Park apartment where they’ve lived for five years. She’s taking business classes at Athens Technical College, and was saving money to lease a bigger space for her hairstyling business. It all came crashing down in July when a new property manager informed her that her rent would nearly double.

The property manager sent Hulin a notice that her lease was expiring and she had two choices: sign a 12-month lease at $1,595 or a month-to-month lease at $1,695. Hulin, who previously paid $825 a month, signed the month-to-month lease. In order to make rent, Hulin took a second job working the night shift at an Amazon warehouse in Pendergrass, Georgia. She worries about leaving her daughters home alone during the night, and has had to miss class to rest after her shift at the warehouse.

“I’m so tired now. When I get off [work], I can’t even go to my class … I’m having to fight to do my homework,” Hulin said. “Everything was okay before this happened. It wasn’t the best but it was okay.”

Barbara Daniel — a 22-year resident of Lexington Heights — received a similar letter in June saying her lease wasn’t renewed. The only reasoning it gave was that it was a “business decision.” The property manager also told her the government-issued Section 8 vouchers she relied on to pay for housing would no longer be accepted. She had until July 31 to vacate the premises, a date she later disputed and pushed back to Aug. 31.

“It felt like I was stabbed, I couldn’t breathe,” Daniel said. “It changed my life.”

The notices arrived after Hulin and Daniel’s landlord, Fillmore Property Group, sold Lexington Heights and Highland Park as well as two other complexes — Hidden Pines and Rosemary Place — to Prosperity Capital Partners, a Florida-based real estate investment group founded by former pastor Randy Lawrence and his wife, Sara Jo Lawrence. Following the purchase, the company increased the rent price of units in all four neighborhoods, threatening working-class and federally assisted residents with displacement.

The issue drew attention from the Athens community, with allies ranging from citizens and activists to city officials. Activists and housing advocates say the story of Prosperity Capital Partners and the four neighborhoods represents an issue that’s been quietly growing more urgent over the past several years.

As the University of Georgia expands its student population and rent prices spike nationwide, the Athens’ real estate market has ballooned, creating a crisis that threatens the livelihoods of hundreds of renters like Hulin and Daniel. Housing law experts say working-class tenants in Georgia are especially vulnerable because they have few legal protections against skyrocketing rents and revocations of government-issued housing vouchers.

‘Investors First,’ Residents Last

Prosperity Capital Partners specializes in investing in single and multi-family homes and apartment complexes. Its website indicates past properties have undergone some renovations before going back on the market as rentals. Their long-term strategy is to raise rents, lower management costs and sell properties in three to seven years.

Code enforcement officials have called the quality of these renovations into question. In August 2021, The Atlanta Journal-Constitution reported an apartment complex Prosperity Capital Partners had owned since March 2021 — Royal Oaks Apartments — was undergoing work after Atlanta Police Department’s Code Enforcement Section cited 185 housing code violations. Residents complained of water leaks, structural problems and rodent infestations, and described living conditions in the complex as “inhumane.”

The mission statement posted on Prosperity Capital Partners’ website — located under a video of Lawrence speaking called “At Prosperity Capital, We Put Our Investors First” — asserts a commitment to profitability while also improving the lives of the people who live in their properties.

“This is a true win-win,” the mission statement said.

In the same statement, Lawrence asserts himself as a “transformational community leader.”

The video has since been removed from the company’s website.

Hulin and Daniel said their experiences do not reflect care for the people living in Prosperity Capital Partners’ properties. They pointed to a few instances where they felt the company was unfair to residents and ignored their concerns.

Daniel said Lexington Heights’ property manager did not allow her to enter a meeting about changes to leases because Daniel did not notify the property manager that she would be bringing an attorney. Both Daniel and Hulin said communication between tenants and Prosperity Capital Partners is poor, with the only contact coming through newly-hired property managers, even as tenants face displacement and homelessness.

Porsha Westbrook, the property manager at Highland Park, said Prosperity Capital Partners doesn’t communicate with property managers or residents directly, and instead goes through Strategic Management Partners, which instructs property managers based on orders Prosperity Capital Partners gives them.

“That is not a pastor, a pastor does not do things like that,” Daniel said, referencing Lawrence’s tenure as a church leader. “It’s greed.”

Documents obtained by The Red & Black show that Daniel was initially given 30 days to leave after her lease wasn’t renewed. Daniel said she was told she was renting month-to-month after her annual lease expired in December 2021.

Elizabeth Grant, director of the Public Interest Practicum at UGA’s law school, said under Georgia law landlords must give tenants on month-to-month leases without formal contracts at least 60 days notice before terminating their lease.

Daniel said Prosperity Capital Partners gave her 60 days after she disputed the notice.

“I kind of think that [Lawrence] wants some of us to fail and get evicted so he could give these places to some of the college students,” Hulin said.

Prosperity Capital Partners did not respond to multiple requests for comment from The Red & Black.

Fighting an uphill battle

Sarah Gehring, an Athens-area tenants’ rights lawyer, said the legality of Prosperity Capital Partners revoking Section 8 “is a question that we are still looking into,” but under Georgia law, tenants have few rights when it comes to rent increases and voucher revocations.

In some states, like Colorado and Maine, housing voucher recipients are protected against source-of-income discrimination. Source-of-income discrimination occurs when a landlord refuses to rent to a housing applicant due to their lawful source of income, which includes housing vouchers.

In Georgia, source of income is not considered a protected class under the fair housing statute, and source-of-income discrimination is not illegal. While local governments can adopt the statute, they can’t make legally-enforceable changes to it, Gehring said.

“The law in Georgia generally believes that landlords and tenants are free to make their own contracts, and either you can agree to their terms or you can leave,” Gehring said. “We don’t have great laws in that way.”

Tenants are trying to fight back. On Sept. 30, residents from the four neighborhoods along with allies and Mokah Jasmine Johnson, Democratic candidate for Georgia House District 120, gathered outside City Hall. They urged state and local leaders to take a stand against Prosperity Capital Partners and the broader housing crisis locally and statewide.

Hulin and Daniel both spoke at the rally, with Hulin tearing up as she described the difficulties she’s faced since Prosperity Capital Partners purchased Highland Park.

“They had came in and doubled — over doubled — my rent literally overnight,” Hulin said. “It’s been hard.”

Not just Prosperity Capital

Prosperity Capital Partners purchasing the four neighborhoods was a distressing event for the community, Gehring said, but they hope people understand that threats to affordable housing don’t just come from big investors. The U.S. is currently in a housing shortage, and that coupled with stagnating wages has created a crisis for affordable places to live, Gehring said.

Hulin said she discovered this when she began searching for a place to go after her rent went up. When she looked online for 3-bedroom apartments in Athens, there were few options under $1,800 a month — still far beyond her previous rent of $825. According to data from Zumper, a website listing rental properties, the average rent for a three-bedroom apartment in Athens increased from about $900 to $1,865 per month between October 2016 and October 2022.

Hulin said having to pay an increased rent has made it harder to achieve her goals and take care of her family. She also worries about what will happen if she moves and has to pull her daughters out of their schools in the middle of the year.

“I’m just tired, I’m just ill, I’m trying to keep myself strong for my girls,” Hulin said.

Daniel, who moved in with a friend in town, said it’s been hard to move in with other people after building a life and home for herself. She enjoyed having a place where she could spend time alone, and finds it difficult to live with others after being independent for so long.

“It’s just like he [Lawrence] ripped everything from me,” Daniel said. “He took my sanctuary … and I’ve got to learn how to get it back.”

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This article, in its original form, can be found here: View Story