Dozens of Athenians face displacement as investors spike rent, refuse Section 8

Many low-income tenants in Athens are facing displacement at the end of August after Prosperity Capital Partners, a Florida-based investment company, purchased dozens of duplexes in the Lexington Heights, Hidden Pines and Vincent Drive neighborhoods. The new management company has greatly increased rents and will no longer accept Section 8 vouchers from tenants, many of whom will have to move.

Lexington Heights

One of these tenants is Barbara Daniel, who has lived in Lexington Heights for over 20 years. Her old landlord sold her home on June 14 to Athens Portfolio 4 LLC, a part of Prosperity Capital Partners. Just weeks later on June 30, Daniel says she received a letter saying her lease was not renewed and that she would have to vacate the premises on July 31.

Barbara Daniel at her home in Lexington Heights
Barbara Daniel outside her home in Lexington Heights, where she has lived since 2000.

At the same time, the new owner increased rents in the neighborhood for most tenants from $840 to $1175 a month. Daniel, whose rent is paid by the Section 8 housing voucher program, says she was not even given the option to stay.

“They didn’t give nobody a chance to find out, could they afford to pay for it,” Daniel told APN. “They just gave me a date to get out.”

A letter received by Barbara Daniel and other tenants of Lexington Heights

Several of Daniel’s neighbors received the same letter, and she says some of them have already left their homes. But Daniel refused to leave, knowing that landlords must offer at least 60 days before termination of a month-to-month lease in Georgia. Strategic Management Partners, the company responsible for managing these duplexes, acknowledges the legally-required 60 days and says that Daniel’s deadline to vacate had always been August 31.

Porsha Westbrook, property manager with Strategic Management Partners, denies that her company ever sent Daniel the letter saying she had to vacate at the end of July. She also denies that they are trying to force anyone out of their homes. She says everyone was given the option to pay the higher rent, although they do not accept Section 8 vouchers and these tenants would have to pay out-of-pocket.

“No one is being forced out, kicked out, none of that,” Westbrook told APN. 

Most tenants in Lexington Heights have chosen to pay the higher rental rates so they can stay in their homes, according to Westbrook. “I personally walked 24 renewal letters today with tenants who were very happy to sign those. I have another 16 who are on current leases who have already agreed to the new terms. I just have seven people that I’m waiting on answers.”

UPDATE 8/10/22: Since publication, one resident of Lexington Heights who I had not previously interviewed called me to say that while she did sign a lease agreement at the higher rent, she was not happy about it at all. It was important to her that this be corrected in the article.

Some tenants have indeed found a way to pay the higher rent, but Daniel says that she can’t manage it. In fact, she has not yet found any apartment in Athens that’s affordable for her. She may end up effectively homeless as a result, starting in September. 

“I guess I’ll have to stay with somebody until I do find somewhere,” she said. “Everywhere we done try to look, they’re already booked up, or they’re priced too high.”

Her neighbor is in the same situation. “Everybody is going up on their rent. There’s nowhere to go, not here in Athens. I’m pretty sure I’m going to have to [leave the county]. They care nothing about the residents, all they care about is these damn students,” he told APN. 

Hidden Pines

A similar story is unfolding across town in the Hidden Pines neighborhood, which was also purchased by Athens Portfolio 4 a couple months ago. 

One resident of Hidden Pines, who did not volunteer her name, says that her rent will almost double next month. “I was paying $575 in 2020. It went from $575 to $680. Starting in September, I’m going to be paying $1175 if I still reside here.” 

She says she knows ten people, including members of her family, who will be forced to move out of the neighborhood this month because they can no longer afford the rent. 

A letter received by residents of Hidden Pines

The increased rent is a barrier for many to continue staying in these homes, but so are Strategic Management Partners’ other requirements for tenants to sign a lease. For example, the management company requires that tenants have an income three times higher than the new rent. That would amount to an annual income of $42,300 a year, which not many in Hidden Pines would be able to claim. Other requirements, listed in a letter posted to her door, include mandatory renters insurance and being current on all previous rent payments.

The increased rent alone would be too much for many current tenants of Hidden Pines, this resident said. “There’s plenty of families out here. People with kids, single mothers. You just can’t expect them to come up with that kind of money and still provide for their children.”

While she says she could afford to pay the rent, she’s had other problems that make her less likely to stay. For example, she says she’s had trouble with rat infestations, septic tank problems and other maintenance issues. Given all of these other problems, she has decided to leave rather than pay $1175 per month, she said.

“The septic tank is for everybody. When it backs up, we back up here. We’ve had numerous floods in here, people’s feces all in here. I had to pay out of pocket to fix it. The rats was horrible. It’s not worth it.”

This resident asked to move into a newly renovated unit, which she says might be worth the increased price, but the management company refused. 

Who is doing this and why?

Athens Portfolio 4 LLC was created on June 6, right before it purchased a large number of duplexes in Athens. This company’s office is not located in Athens, but rather in Florida at the exact same location as another company, Prosperity Capital Partners.

Randy and Sara Jo Lawrence
Randy and Sara Jo Lawrence, owners of Prosperity Capital Partners

Prosperity Capital Partners is owned by Randy and Sara Jo Lawrence, who oversee “a real estate portfolio of $250MM in multi-family assets and [are] on track to double these holdings in the next three years,” according to their website. Their investment strategy is to “reposition properties … by upgrading their in-unit amenties (sic) … to justify increased rents.”

Translation: they buy run-down apartment complexes and duplexes, fix them up and greatly increase the rent, attracting renters who can afford to pay the higher prices. Of course, with tenants still living in the units, renovation may prove difficult. It’s possible the new owners don’t mind if some of the current occupants decide to leave their homes.

Daniel feels that tenants of Lexington Heights have been treated disrespectfully by the new owners.

“It’s not right to treat people like this,” she said. “They need to figure out a way to keep people where they’re at. Don’t put them out on the street. We got a lot of homeless people as it is now, and we have no place for them. There’s no place for us either. There’s a lot of people on fixed incomes. I’m not complaining for myself, I’m complaining for everybody. Right is right and wrong is wrong.”

What can we do about it?

In Georgia, landlords are free to raise rent at will as long as they abide by the law. They’re also free to reject Section 8 vouchers if they so choose. Tenants’ rights lawyer Sarah Gehring says that there isn’t much we can do about this situation with the laws currently on the books, but we could make a difference locally by passing new ordinances to protect tenants. 

Specifically, Gehring advocates for a source-of-income nondiscrimination ordinance such as the one passed in 2020 by the Atlanta City Council. An ordinance like this would prevent landlords from refusing Section 8 tenants, making it much easier for these tenants to find housing.

Commissioner Tim Denson told APN that the mayor and commission are discussing implementing a source-of-income nondiscrimination ordinance, but he is worried that it may be difficult to enforce given Georgia law.

Commissioner Tim Denson
Commissioner Tim Denson

“There could potentially be blockages from state law,” Denson said. “If that ends up being the case, I plan on advocating very strongly for our state legislature to take this up as priority number one.”

Either way, it’s unlikely that such an ordinance could be passed before September. Unfortunately, there’s not much the commission can do to help those facing displacement at the end of the month.

“This could potentially unhouse hundreds of people,” Denson said. “This isn’t people missing payments or being bad tenants. This is [the management company] just not wanting some types of money. There’s no room for that here in Athens right now when we’re facing a housing crisis. It’s unacceptable. There’s no reason for this outside of greed.”

Denson says he will write an open letter to Prosperity Capital Partners, asking them to stop or at least delay their plans to give the tenants of Lexington Heights and Hidden Pines more time.

“We don’t know where these folks will go. This is not the only company doing this, but this company owns a lot of units, so it will have potentially massive negative impacts. This has an impact on everyone’s housing cost, across the board.”

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