As Newnan continues to grow, the city council is looking to ensure the residential demand is met in a way that best reflects its vision for its future.
At the recent council retreat, the subject of rental housing was broached in an attempt to keep Newnan on the “own” majority column. Currently, the city maintains a rental rate of 44 percent.
This falls in line with other communities such as Fairburn, Smyrna and Cartersville. The ratio swings as far as 75 percent rental in College Park, and as low as 27 percent in Peachtree City.
Other nearby cities, including Carrollton, LaGrange and Fayetteville, have rental rates between 31 to 63 percent.
Council members didn’t agree on a specific target number for rental ratios in the city but seemed to agree that ownership needed to stay in the majority.
However, tracking rental properties in the city isn’t a simple process, according to City Manager Cleatus Phillips.
“We can track permits pulled for apartments, but we cannot track when residential units change from single-family ownership to rental ownership,” Phillips said. "Under the law, we cannot have a rental registry.”
Every 10 years, a federal census reveals the housing versus rental ratio. In data tracking back to 1950, the ratio in the city has varied from 53 percent rental in 2000 to 41 percent in 1960.
“But even if you aim to keep a 60/40 own/rent ratio, you can’t sit at a zoning hearing while sitting at 59 percent and deny it,” Phillips said. "The demand for rental is not going to decrease."
So how does the city maintain control over the ratio and where do rentals fit, especially in light of a population that seemingly rejects the idea of more rental opportunities?
Hospital Road rejection
Mayor Keith Brady referenced a recently proposed rental townhome development on Hospital Road as an indicator of how the city can incorporate more rental properties while ensuring control is maintained.
The proposed community would have rezoned 34.497 acres of land at 60 Hospital Road for the purpose of building a 221-unit residential development, featuring detached single-family homes, front-entry townhomes and rear-entry townhomes.
The development also promised amenities including a clubhouse, clubroom, leasing office, fitness center, pool, pickle ball court, playground and dog park.
"By the time they finished the deal out there, they would have had $20 million worth of investment in building,” Brady said.
The difference, Brady said, between a rental and a traditional fee-simple development is that the fee-simple developer recoups his costs immediately while the rental developer has to rent long-term to recoup all costs.
“It’s the opposite of the fee simple,” Brady said. “These (rental development) folks never leave because it’s a total cash flow process. The trend is heading in that direction.”
However, the Hospital Road project received major backlash from nearby residents concerned about issues such as traffic, school overcrowding and potentially creating an island of residential in the middle of an otherwise industrial area.
In the end, the developer withdrew his application after the rezoning request was denied by the planning commission.
Had the Hospital Road project been in another location, "perhaps on the other side of I-85, we probably wouldn’t have heard a peep,” said Councilmember Paul Guillaume.
“So, we either say, 'No rentals period,’ or say, in certain areas, they fit,” Guillaume said. “Because when you talk about rentals, people think ‘apartments,' and that’s a no for them."
Guillaume said the Alta at Ashley Park apartment complex is a“great example of a well-thought-out complex that feeds into that area and into downtown through the LINC.
"We have to be strategic when looking at rentals,” he said. "What does it do, how does it fit and contribute to the community?"
Steering preferred development
City Attorney Brad Sears advised that under the city’s comprehensive plan, it cannot discriminate – but it can limit – rental development.
“If your actions are capricious and arbitrary, it’s not legal, but with the (comprehensive) plan, you have the control to develop the things you want,” he said. "You’re controlling the rules by not rezoning to the high density. The development community has looked at the zoning ordinance and figured out a way to get around that."
With rising interest rates and building costs, home ownership is becoming more difficult, especially for those considered “workforce,” according to Councilmember Cynthia Jenkins, who also serves as CEO of Southern Crescent Habitat for Humanity.
Workforce Housing is defined as housing affordable to households earning between 60 and 120 percent of area median income (AMI). In Coweta County, the average median household income is just above $83,000.
Workforce housing targets middle-income workers, which includes professions such as police officers, firefighters, teachers, health care workers and retail clerks.
Quite often, homeownership opportunities for workforce members happen through nonprofits because there are none otherwise, Jenkins said.
“So where do you rent?” she asked. “I’m not opposed to lower-density rentals – it’s easier to make them homeownership opportunities. Apartments are much harder, if not impossible, to do that with. Single-family detached gives you that flexibility. They can go with the market and keep the aesthetic we want.”
So what is prohibiting builders from making entry-level, fee-simple homes in Newnan?
“In today's market, a developer cannot build a $150-$200K starter home in Coweta because of land and development costs,” Brady said. "One builder said he’s currently running at $55K per lot for development, not including acquisition. To fully develop a lot is $104K from a developer to the builder, including markup.”
Lot sizes in the city typically run from .25 to .33 acres.
Jenkins referenced several Habitat for Humanity homes in downtown Newnan, which, thanks to a variance, do not adhere to square footage requirements but are still providing quality housing options, including a 950-square-foot residence on the corner of Roberts Road and East Broad Street.
“We (Habitat for Humanity) are building houses that are still bigger than some of the post-World War II homes we grew up in,” she said. Several older homes in Fourth Street and Hollis Heights area feature floor plans as low as 850 square feet.
But when deciding which future rentals will get the approval of the council, Mayor Brady posed a question to the group:
“So if you’ve decided this is the road we want to go down and have decided this is what we want to do, but when people show up against it and you vote no, then why are we even having this discussion?”