Well, here the Fayetteville government goes again.
There is a major rezoning hearing at Fayetteville City Hall on Tuesday, December 19. Not only is the city in danger of losing the Walgreens drugstore on the corner of Highway 54 and Gingercake Road, but they could also end up with a massive condominium complex on the site — 265 three-story condominiums on 22 acres.
The rezoning request is for a change from commercial zoning to townhouse-condominium zoning. The proposed development calls for plastering the corner lot with three-story condominium buildings, creating hundreds of new residential units in a small space.
As I have stated before, the Fayetteville city council has made a generational mistake with the over-approval and construction of multi-family housing. Predictable problems will follow. Solutions to those problems will be few.
Market impact
The first order of business is accurately identifying our multi-family market. The Fayetteville city council might mistakenly believe their market competition is the remainder of Fayette County.
The true multi-family market is the “Southern Crescent” counties south of Interstate 20. For example, Fairburn and Newnan have outpaced Fayetteville in multi-family construction. The rent comparisons and vacancy rates are dependent upon supply in Henry, Coweta, South Fulton, and neighboring cities in Fayette.
Nationally, multi-family construction is higher than at any point since at least 1970, and twice as large as the wave that preceded the Great Recession. The market is cyclical and a supply glut is very possible.
Recently, markets have benefitted from outsized in-migration in the wake of the pandemic. Fayette County has also had an increase in job creation, but the market faces the largest multi-family supply wave in modern history.
It appears that supply is outpacing demand in our true market. Owners financing condominiums and townhouses in our current economy are more likely to end up underwater or in foreclosure.
When the axe falls
Apartments, condominiums, and townhouses carry particular risks.
In addition to the supply risks, multi-family developers are facing challenges in financing, as well as rising construction costs that have placed pressure on development proformas.
Economic pressures lead to reduced construction quality, reduced maintenance, and low standards for renter approval to be profitable.
The bite of the condominium and townhouse sector is the younger and the older owners cannot afford significant increases in monthly maintenance fees or special assessments to keep up with sharply rising labor and material costs.
The condominium and townhouse sector deteriorates faster than other forms of residential dwellings. High rates of foreclosure are common.
With a possible recession, it remains unclear what the path of demand will be. Vacancies in rental units could increase substantially, and rents would fall as properties compete for tenants. The more units a community has the more volatile that scenario becomes.
Basic economics dictates that rents in rental units will decline in the face of oversupply. Watch for local multi-family complexes offering one to two months of free rent to renters on an initial lease to compensate for a declining environment.
The oversupply of new apartments and rental condo properties distress existing older developments without the latest finishes or amenity packages, increasing the need to lower rents to compete with their newer competitors.
If rents fall due to oversupply, a much more transient population will ebb and flow.
Waived application fees, reduced damage deposits, and similar inducements are signs of the market faltering.
Forcing operating expenses down, deferring maintenance, and asking assessors for lower tax valuation appraisals occur when the cycle goes downward.
The multi-family surge will impact traffic congestion. There will eventually be an impact on the school districts as well.
Solutions or mitigation
Once the developments are constructed, there is little the local government can do to rectify any problems when they occur.
Some jurisdictions in the north metro area have been forced to purchase rundown multi-family developments to rid themselves of crime and blight.
Condominium and townhouse complexes gone awry are almost impossible to resolve, having to deal with hundreds of individual owners.
Of course, the best plan is to maintain a very lean multi-family supply to avoid the pitfalls.
[Brown is a former mayor of Peachtree City and served two terms on the Fayette County Board of Commissioners. You can read all his columns by clicking on his photo below.]
Mr. Brown is completely accurate on this segment. None of the primarily older residents on Gingercake want to loose this Walgreens and add 200-300 families to this two lane street. The amount of financial kick backs floating around in Fayette government is disgraceful. Economic development seems to be all in one area and at the cost of people who love Fayette most!! Watch these politicians will destroy Fayetteville and leave town for greener pastures.
Perhaps Soros Fund Management will buy 10 or 20 units and participate in the Section 8 program, just to get the ball rolling.
I’ll give credit where it’s due…SB is right on this zoning debacle. This will not be an improvement in anyway shape or form…
Hi Wing. I think the Chief Executive you cite is Jimmy Cater.
2023-43 = 1980. So technically Jimmy Carter would be correct…..but you’re missing the one obvious answer that you maybe don’t (or maybe you do?) want to admit to.
The same one who increased our budget deficit more than any predecessor?
According to the CBO it nearly doubled in 2021 over what it was in 2020.
The POTUS sets he budget? News to me.
I was going to let OldFCHSkool come to that realization on his own but we might be waiting a while. lol.
Yes indeed – The Donald is the only president in the last 43 years to come out of office with less wealth……..by far. Kinda makes you think he wasn’t in it for his own personal gain, huh? Let’s see….what was Obama and Clinton the the Bush’s gains while in office…….????? You might want to look that up for yourself.
But isn’t that what the definition of a politician is? Don’t think anyone would describe St. Fictions’ Orange god as a politician.
Trump’s business acumen is laughable. Do you need reminders? He has filed for bankruptcy, not once or twice, but six (6) times. In the 80’s he failed with his USFL football franchise (but is known as $3 Donnie). In the 90’s and through the next decade he failed with Trump Entertainment Resorts. Skipping over his many other failed business ideas (rather amusing too), his golf courses around the globe these days, at least half of them are hemorrhaging money. Real estate holdings in DC and NY are also down big time. And then let’s not forget Truth Social, which is a part of Trump Media that’s about to become another financial disaster. Venture capitalists say he lives off of a three-legged stool, his inheritance, his stiffing of many vendors, and the money he has raises online disguised as political support.
Doon – you didn’t address the point – which is that he’s the only president since 1980 who has not enriched himself from being in office. Get over your blatant hatred for the man and just let that point sink in. Do we really want a president – let alone any elected official – doubling their net worth while making a $200k salary? Doesn’t that seem just a bit odd? I’m not asking you to vote for the man, I’m asking you to think objectively and to think for yourself instead of toeing a party line.
Wing, he tried to enrich himself and line his pockets while in office and in trying to do so … was potentially in violation of the US Constitution’s emoluments clause. Perhaps you forgot he tried to hold a G7 summit meeting at one of his properties (Doral in Miami) in 2020? I think you miss my point, he tried to enrich himself while in office and strives to do so afterwards but fails along the way. And it’s not for a lack of trying mind you.
Wing – I wish you a very merry Christmas.
Assuming that you are not being satirical about the 45th president, I will reply. Judge Engoron recently ruled that Mr. Trump falsified his financial holdings, so it would be impossible to know whether he gained or lost money while in office.
But even if we assume that he did lose money, it was his family’s fault. Mr. Trump is the only president in modern history who failed to place his holdings into a blind trust while he was in office. Thus, his family ran his businesses out in the open while he was president. If they lost money, it was a result of poor business acumen, not some sacrifice of the 45th president.
Since leaving office, Mr. Trump has relentlessly raised money on his name (his brand) and even sells trading cards with his likeness. To suggest that he is not attempting to profit from his name and office is ridiculous.
Again, if you were merely being satirical, I apologize for not picking up on your jovial tone. At any rate, I hope your holidays are happy ones.
good for Fayetteville, despite the usual and predictable FUD being tossed about in this article, with no actual supporting evidence, there is a severe housing shortage in this country. What is there is not affordable for anyone and the market is due some deflation to bring it back into alignment with actual incomes and what families can afford. Not surprising for the aging in place NIMBY type to come out against anything to make living affordable if it risk deflating their overvalued homes and bringing in anyone who doesn’t fit a specific demographic. Even if it means their own grandchildren can’t afford to live the lives they enjoyed, and certainly aren’t better off as a generation than they were. The selfishness of a certain generation is astounding.
I wonder how long, if ever, it will take for the general public to realize their elected officials don’t really work for them. People can say whatever they want to but actions speak louder than words. It’s unfortunate people believe liars all the time. Nobody wanted that data center yet.. how many people almost got killed by the trucks pulling in and out of the massive 900 million gallons of water needing data center? How many of you would like toilets that have more water in them? How can so many people be gaslit? Save the resources for them to be squandered. Whatever. Some of you work for criminals. It’s as simple as that.
I’d say Peachtree City residents – at least 80% of them – realized that and voted for Ms. Johnson over Ms. Moore in the runoff…..in addition to the voting public who voted heavily for Ms. Brown over Mr. Painter……there is some hope that selfless candidates, who don’t run for office simply to fill their own pockets and to aid their own business interests, still do exist. It’s just harder to find them and when they do run, they get zero positive coverage from most of the media, at least in state and national elections.
Side note…..can you name the only US President that, in the last 43 years, came out of office with LESS wealth than when he was elected? All the others except one have seen incredible gains in their personal wealth. Seems to me that might be an indicator of looking out for the common good, instead of looking out for their own self interest.