I-TEAM | No place to call home: Local families displaced by out-of-state investors
RICHMOND COUNTY, Ga. (WRDW/WAGT) - A storm is brewing over the Augusta housing market and the I-Team found a hurricane of evictions is beginning to form.
The demand for housing, soaring home sales, and skyrocketing rental prices paired with a pandemic has created the perfect storm for displaced families.
Booming housing market leads to affordable rental bust
Home values have increased by more than 50 percent in the last year alone, according to a market report by Zillow, and a growing number of jobs and population make Augusta-Richmond County an investor’s dream. But the I-Team found it’s equally a nightmare for local tenants.
“He said he sold it. He no longer owns the property anymore.” Traci Greene said.
The single mother told the I-Team that she received a letter to vacate after her landlord sold the home she’s been raising her children in for the last four years. She needed to find another home, and quickly.
“Everywhere I’ve looked it’s like $1,200-$1,300. I know I cannot afford it,” Greene said. She can’t afford it on the salary she earns working full-time in retail at an Augusta Walmart.
The I-Team found Greene would need to make $15.19 an hour, or more than $30,000 a year, to afford the rent in her current neighborhood. Her housing voucher bridged the gap until now.
Kim Wright has the same landlord and the same problem. Their mutual landlord sold six properties including the house Wright has called home for years.
“There are no homes available in Augusta. There are three homes listed and they are all over the Section 8 (threshold),” Wright said.
And nine strokes and two heart attacks forced her to give up her job at a call center.
“I am on disability which leaves me with a very limited income,” Wright said,” “It’s really scary because I don’t know where I am going.”
Her housing voucher afforded her the opportunity to live here, but that was pre-pandemic and pre-housing boom.
There are only two 2-bedroom Section 8 properties available to rent in Augusta right now. Section 8′s website shows there are zero 1-bedrooms. The very few Section 8 properties that are available are in areas where Greene does not feel safe moving with her teenage son and daughter.
“Why don’t you want your children there?” I asked.
“Because it is a rough area. A really rough area. I don’t want them to grow up how I grew up. I grew up down there,” Greene said.
Rental homes in safe neighborhoods are out of reach for tenants like Greene and Wright. The I-Team found only one of the eight new apartment complexes built in Augusta since 2015 accepts Section 8. The average cost for a two-bedroom at any of the newly built apartments is more than $1,600 a month.
I-Team finds minimum wage is not a livable wage in Augusta
A person earning minimum wage would have to work 86-hours a week just to afford an $815 dollar a month rental payment, according to the National Low-Income Housing Coalition. Wright was paying that exact amount in rent until her landlord sold the property.
“I am telling her my rent is $815. The rent around this area is $1,200, $1,300, $1,400,” she said when she called the Housing Authority for the City of Augusta.
More than half of all renters in the Augusta-Richmond County are what the government calls “rent overburden.” The Department of Housing and Urban Development defines “rent overburden” as anyone paying more than 30%of their gross income to rent.
“We are in a housing crisis here because more people are being displaced and no homes for them to move into. It’s going to create a problem and big problem,” Wright said.
Out-of-state Investors buying Augusta housing inventory at a record pace
The I-Team found the problem exacerbated by Augusta’s attractive housing market. We found Wright and Greene’s landlord sold his rental properties to a limited liability company by the name of SFR3-030. The Georgia Secretary of State’s website shows the LCC was created two months before the sale of the properties in Richmond County.
The owner of SFR 3 is Jonathan Kibera. His LinkedIn reads he “adventures in e-commerce, logistics, offshoring, and real estate.” He is a graduate of Harvard and former Silicon Valley executive who now makes his money as an out-of-state investor. Kibera has created thirteen LLCs in Georgia alone since 2018.
The Milwaukee Journal Sentinel published an article in April of this year about corporate landlords gobbling up cheap rentals in the Milwaukee area. Kibera’s companies have bought up at least 95 single-family rental homes in Milwaukee.
The I-Team looked deeper and found Kibera’s companies own around 4,000 properties in at least two dozen metropolitan areas, including 127 in the Augusta-Richmond County area.
We also found Augusta-Richmond County ranks third in the country for the highest percentage of out-of-state buyers on real estate.
The website Roofstock analyzes property data for out-of-state investors. The website featured Augusta this June, stating: “Buying bigger rental property in Augusta could be a smart investment, since more people and working and schooling from home.”
The website lists an 11 percent increase in rental prices over the last year under the key market statics for Augusta.
Roofstock also featured Kibera and his business partner in an article last year. The duo doubled their return on investments by transitioning from commercial real estate to single-family homes.
Local leaders warn of looming housing crisis
Augusta Richmond-County District 1 Commissioner Jordan Johnson raised concern over the growing crisis during the July 14th Commission Meeting.
“With rent rates going up, I imagine you will receive more calls about this... an apartment complex here in Augusta, that I won’t name, they have increased their rent by $300 and the facility isn’t worth that,” Johnson said.
The Landing, formerly known as Fox Den Apartments, increased rent over the summer. The I-Team found yet another out-state investor bought the apartment complex during the pandemic.
Danielle Ringgold is the housing coordinator for the non-profit organization Changing Faces.
“What is happening to the residents?” I asked.
“They are being pushed out,” Ringgold explained. “They can no longer afford to stay there and they are struggling to find better options because there just is not any. A lot of our previously affordable housing we had here in Augusta has been bought up by outside investors and flipped into luxury apartments or renovated and the renovations have caused the rental amount to go up, in some cases, $300 a month.”
Yonnie Murray cannot afford an extra $300 dollar a month. She has been battling breast cancer for the last three years. Her disability check barely covers her basic needs.
“When you got that letter what went through your mind?” I asked.
“Oh my God. What am I going to do? My rent was $495, now it is $725. My disability check is only $748. I cried because I knew I had nowhere to go. I needed some help,” she told me.
She did receive help with her rent through Changing Faces, but it’s only temporary. She is praying something will open in public housing. She has been on the waiting list for three years.
“Where are you on the list for public housing?” I asked.
“A thousand,” she told me.
Federal government response to Augusta’s housing crisis; extra resources still not enough
The Department of Housing and Urban Development issued Augusta-Richmond County an additional 155 emergency housing vouchers over the summer to combat the city’s growing housing crisis.
“We have had several people come in saying hey I qualify for Section 8 vouchers but I cannot find anybody accepting them. Do you know anybody who does? The answer is no. Nobody is accepting them and we get calls like that every day,” Ringgold said.
Kim Wright never missed a rent payment during the pandemic, but she did miss an opportunity never afforded to her.
“I mean my daughter could have bought this house for me,” she said.
Wright’s only choice is to move back to Indiana. Traci Greene and her children have fewer options.
“What is your plan B?” I asked.
“I do not have one,” Greene told me “I will probably take money in savings and stay at hotel room until we find somewhere to go.
Georgia ranks top in the nation among renters fearing eviction. More than half of all renters in both Burke and Richmond County worry they will not have a place to call home within six months.
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