Comité Economic Development and Tourism del Senado, 17 de febrero de 2026

Transcripción

202 turnos. Seleccione un tiempo para reproducir ese momento del video.

1. 0:15:06

   Watson, if you will, if you'll open us up in prayer this morning.

2. 0:15:10

   Let's pray.

3. 0:15:13

   We're good. Dear Father, thank you this day. Thank you for many blessings. Uh, just, uh, thank you for the gift of salvation and just ask and pray that you, uh, just lead and guide us as we go through this meeting. Uh, be with our families while we're away and just, uh, watch over them and, uh, keep them safe and, uh, ju- just be with us as, uh, we make decisions for this state. In Your name we pray, amen.

4. 0:15:34

   Thank you, Chairman. I'm gonna mention right quick, I should've mentioned this before the prayer. I got my, I got my coach sitting over here to my right, uh, in the cowboy hat. Cohen, uh, Cohen came with Dad this morning. Hopefully, by the end of this one... He watched some video footage of the last committee hearing, and he gave it, like, a six. Hopefully give, if hopefully he gives this one a, a eight or nine, something like that. Anyway, but again, thank you all for being here this morning. Uh, we're gonna be, um, hearing, uh, Senate Bill 463, uh, from Chairman Dolezal.

5. 0:16:08

   Um, Chairman, if you wanna come up, go ahead and get started. Um,

6. 0:16:16

   tell us what LC number we're working off of, if you don't mind.

7. 0:16:20

   Sure. Good morning, Mr. Chairman, members of the committee. Um, working off of LC 59-0336S. Is that the version y'all have?

8. 0:16:31

   Yes, sir.

9. 0:16:31

   Mr. Chairman, if I can, a point of personal privilege before we start here. Um, you know, the previous chairman of this committee that started this body on that seat, um, had a knack for hearing bills in 90 seconds or less, uh, taking minimal testimony, uh, had his own theme song that he sings to himself in the morning. And as you know, I serve on the committee on assignments, and we deliberated heavily over who would be fit to fill the large shoes of the now treasurer of the United States.

10. 0:17:02

    And we, we really could not think of any other senator that had quite the flair to step into the shoes of a man who has his own theme song. Um, but we figured that the man who we've never seen wear the same suit twice- ... uh, might be just the man for the job. So I wanna congratulate you on your quick ascent and rise in the Georgia State Senate to this illustrious committee. With that, Mr. Chairman, I would love to tell you about Senate Bill 463. I just wanna talk about it at a high level, then I'll drill down and walk you all through the bill.

11. 0:17:34

    Uh, this bill does two things. It prevents large institutional investors from owning more than 500 single-family homes in the State of Georgia, and it bans foreign investors from owning homes in the State of Georgia, uh, full stop. The impetus here is the recognition that we are in a home ownership crisis in America. Uh, and while this is not the only piece of the puzzle to solving that problem, uh, I would remind the Senate that we have passed the Red Tape Rollback bill out of the Georgia State Senate twice, which will be the largest deregulation bill that would ever have passed in the history of the State of Georgia.

12. 0:18:14

    That bill still sits in the, in the State House, and we're hopeful that they pass it. We are taking an all-of-the-abra- above approach in the State Senate to address the current crisis around home ownership that has driven now the average age of a first-time home buyer in America to 41 years old. When I was growing up in the '80s, 50% of men owned a home and were married by the time they were 30 years old. Today, that number is 12%, and that has downstream societal implications in a lot of different ways.

13. 0:18:46

    And I was fortunate enough not to sign my first 30-year mortgage at 41 years old, but when I do the math on signing your first 30-year mortgage at 41 years old, the math doesn't work. And I know that, uh, there's one member of the minority party here, and I think others will probably follow. While this is, this bill is a caucus priority for the majority caucus, uh, I have certainly heard members, uh, of the Democrat Party as well express concern about this very issue. Metro Atlanta leads the nation, not the Southeast, but the nation, in the amount of single-family homes being resold to institutional investors.

14. 0:19:24

    And depending on the numbers that you look at, um, that's anywhere from 10 to 15% of the housing stock over the last couple of years on the resale market has been sold, um, to institutional investors, largely turned into rental property or kept as rental property, and we wanna put an end to that. We don't wanna see, uh, Wall Street, out of state, out of country, foreign sovereign wealth money coming into Georgia and purchasing tens of thousands of single-family homes. And I believe that to intellectually approach any topic, you have to have the ability to articulate the, the viewpoints of the other side, and I think you'll hear a couple of things from the other side this morning.

15. 0:20:04

    Uh, first and foremost, I think that you'll hear that this is not a problem, um, that there are other things that are, uh, contributing to the affordability crisis, whether it's mortgage rates, whether it's the lack of quantitative easing, um, whether it's the, uh, the federal funds rate and a- as it relates to how deals can pencil on a balance sheet. I think all of those things are true. But what I also think is true is that if you're a 28-year-old and you are placing a bid on a home and you are competing against an entity that has the ability to pay cash, close in 15 days, not have an appraisal contingency, not have a financing contingency, that even if you are able to match the dollar for dollar price that that institutional fund is able to pay, you're not able to match the intangibles.

16. 0:20:49

    And so it is putting first-time home buyers and even second-home- time home buyers at a disadvantage. I think the other thing that you'll hear, um, from the people opposed to this bill, may perhaps among other things, I don't wanna oversimplify their position, is that essentially they have an economies of scale that allows them as landlords to be good landlords. It allows them to service leaks faster. It allows them to fix repairs. It allows them to have better customer service, and that very well may be true But I think that ultimately what we are trying to balance here is not good landlords versus ban, bad landlords.

17. 0:21:24

    What we are trying to balance here is home ownership versus rentals. And I have a grave fear that we are becoming a nation of renters and not homeowners. The primary wealth creation tool for the middle class in America for the last 100 years has been the purchase of a single h- family home through which a family builds equity and ultimately is able to use that equity and retire. And I think that the trend line that we are on now is putting that American dream out of reach for a significant number of families, not only in Georgia, but in America.

18. 0:21:57

    Uh, but so with that, Mr. Chairman, I just kinda wanted to give you all a high level. I'll walk you through the bill. Uh, we go through definitions on page two. Uh, significant invest- uh, definitions here would be business enterprise, affiliate, and foreign investment vehicle. There's been a lot of questions of, well, if I'm a, a mega fund out of, out of Wall Street, if I'm a hedge fund, can't I just, you know, spin up a number of LLCs and use those LLCs to purchase properties and get around, uh, this law? The affiliate language there on, on lines 23 to 25 attempts to capture that and ensure that that does not happen.

19. 0:22:30

    Uh, we get into really the meat of the bill on line f- lines 48 through 55, and we simply state that beginning next year, it will be unlawful for any business enterprise to own, possess, directly or indirectly, but not including to, through one or more affiliates, which is what I just talked about, more than 500 single family residences. Now, we have a couple of carve outs in there. First of all, single family residences are what you would typically think of as detached housing and/or duplexes. This does not capture townhouses. This does not capture apartments.

20. 0:23:01

    This does not capture condo units. This captures, um, your, what I would, what I would colloquially refer to as your white picket fence in a single family home with a yard. Um, we do not prevent people from creating new housing supply. So if someone wants to build 2,000 for rent single family homes in the state of Georgia, this bill does not preclude them from doing that. We wanted to be sure that we did not bend the supply curve down with this bill. We are trying to change the demand curve, not the supply curve, and the demand curve that we're trying to change, we believe, will help families, uh, purchase homes.

21. 0:23:37

    Uh, the, the second significant piece of this bill is on line 60, uh, where we ban foreign investment vehicles altogether from owning single family homes, uh, in the state of Georgia and using them as rental property. And what we do not wanna see happen in America is foreign sovereign wealth funds coming by single family homes, uh, and turn them into rental properties in the state of Georgia. On line 78, we get into one of the enforcement mechanism in, enforcement mechanisms in the bill, which, uh, just to, to quickly describe it, is a tort.

22. 0:24:09

    So this is the first ever cause of action I've written into Georgia law or attempted to write into Georgia law. Um, but to work around constitutional challenges that we would have with state enforcement here, we are putting a private right of action in place to allow the civil courts to be an enforcement mechanism here. And you'll see on, on lines 84 and 85, uh, the damages therein, which essentially we put a significant damage in place that we believe will be a deterrent on line 85 from either someone eclipsing that c- that number of 500 if they're currently under it or those expanding it above 500.

23. 0:24:44

    And I'm gonna rewind for a second. I, I did not highlight one thing as I was talking about the first section of the bill. For those large institutional investors that already have over 500 units, uh, we do not by law force them to divest. They are, they are able to maintain their existing level, uh, of ownership. They're just not able to expand their level of ownership, and we believe that helps us, uh, on the constitutionality of the bill. Uh, lines, uh, 104 to 105 puts a statute of limitations into place.

24. 0:25:15

    Uh, lines 122 to 127 require brokers to inform their clients of this law in the state of Georgia. So if a broker knows that they are working, uh, with an institutional investor, they need to pass along the information about this law to them. Part two, starting on line 130 of the bill, gets into the second enforcement mechanism. And we essentially pull back a number of tax credits for the institutional investors who would have eclipsed the 500, uh, unit number.

25. 0:25:46

    So on line 133, uh, we would pull back the low income housing, historic structures depre- and depreciation of homes and service before, uh, 1987. Those are three separate credits that we would pull back. Um, on line 163, we prevent those institutional investors from claiming credit against in- the insurance premium tax. Uh, beginning on line 171, we prevent them from being able to take depreciation on their corporate returns. And then on line 200, we prevent them from taking depreciation of these assets on their individual returns.

26. 0:26:22

    And then lastly, I believe it's lastly, it is lastly, uh, beginning on line 235, we lay out that there cannot be a claiming of expe- of expending, uh, usual costs associated with, with leasing of homes. So currently, you can obviously deduct cost of doing businesses around your leasing. Um, if you are an institutional investor who owns over 500 homes, you would no longer be able to do that. And Mr. Chairman, we believe that that level of enforcement will, will, uh, bring us where we want to be in the state of Georgia, which is right-sizing the, the playing field, uh, where Main Street currently is having to compete with Wall Street.

27. 0:27:03

    And, um, with that, Mr. Chairman, I'd be happy to answer any questions.

28. 0:27:08

    Thank you, uh, Chairman Dolezal. Appreciate that. I'm sure you gonna have a few questions here. Any questions for the committee?

29. 0:27:22

    Chairman Bearden.

30. 0:27:25

    Thank you for bringing this bill. I just wanted to clarify, you said that this bill does not prohibit someone from going in and building a large subdivision for rent, correct?

31. 0:27:34

    That's correct. Uh, you will find that, if I can find the line for you quickly. I may not be able to. Um,

32. 0:27:43

    yeah, if you look on line 52, you'll see the carve-out for construction of single-family residences.

33. 0:27:51

    I- I see where you're going with that. It's... I'm not going... I think you got a great bill. I just wish we would've done something with that because we do see a lot of areas that would be used for single-family homes being taken up, and you see a brand new subdivision and it's all rentals. And I know I hear a lot from my constituents about that type of building, but, um, I think overall it's a good bill. So thank you. Just wanted to clarify.

34. 0:28:13

    Thank you. I... Chairman, I'd be open to, uh, any input the committee has and, and I'm certainly not married, uh, and, uh, would take it friendly amendments. But I would just say that what we're trying to do here, uh, with that carve-out is recognize that there is a supply issue. Um, and like I said, while the state Senate in particular has done some things that we believe will ad- will address that supply curve if the House signs off on them, um, we did not wanna do anything here to push that supply curve down further, even if it is for what will become rental housing.

35. 0:28:42

    Thank you. Um, Senator Ginn.

36. 0:28:46

    Thank you, Mr. Chairman. On line 84, you mentioned actual damages, and I'm kind of... If you'd elaborate, what, what would you expect to see as actual damages, and how do you go about figuring out, you know, where's that math come in?

37. 0:29:00

    Yeah, so there is a case, uh, that I'd never heard of before whi- which was the Sons of Confederate Veterans versus Henry County, and that essentially is a standing precedent in the State of Georgia. And what line 84 will do is it will work around that case law to ensure that someone that brings a tort claim has standing in the case. So I believe those would likely be de minimis damages, but it would prevent someone, uh, from the outside coming in and making a claim, and it would, it would follow the court precedent laid out in s- in the Sons of Confederate a long time ago, um, and ensure that we have proper standing for these cases as they come.

38. 0:29:44

    So, uh, I don't know that those actual damages would ever be anything that would be significant. The statutory damages would be the significant stick that are in this bill, but that is what we worked with on alleged counsel to essentially work through the existing course, court precedent around standing.

39. 0:30:00

    Maybe you could help elaborate on the, the case you're talking about with Henry County. But w- I'm thinking, okay, I'm going to buy a house, and there's, there's somebody's bought up these houses, the, uh, and ahead of me with this foreign investment. The, uh, uh, to be able to prove that damage, you know, is there not another house that I can, I can buy? 'Cause, I mean, houses are very independent and very specific on, okay, well I'm looking for a house, not, you know...

40. 0:30:31

    You, you don't, you don't buy 'em in, uh, like a herd, you buy 'em individually.

41. 0:30:37

    Yeah, so if you look at lines 95 and 96 in the bill, essentially this references, um, line 84 in the bill. To e- e- essentially all that we're doing here is saying that you have to have more than just the statutory claim to, to bring a claim. So you would have to have, regardless of the dollar amount, you would have to be able to say that you were damaged, uh, by someone br- violating the law here. And you would, you would check the box to say, "I was involved either in a transaction or an attempted transaction, therefore I have standing." And I think likely what the courts primarily would look at in this case in terms of the inf- uh, in terms of the damages would be the statutory damages, uh, as opposed to the actual damages.

42. 0:31:17

    'Cause you're right, I think determining a number of actual damages may be difficult, but obviously that would be up to the courts to work through.

43. 0:31:22

    A, a lot of times in the real estate world, you know, a, a broker's got a third party that's, that's actually fronting for somebody. And, and I know you've tried to address that. How do you, uh, you know... A lot of times a broker doesn't know, okay, who the actual buyer's gonna be. You know, how, how would you go about finding out who the damages, you know? 'Cause you don't know it's a foreign entity w- when you're, you know, making offers on a house. So I'm looking at it from a standpoint of, okay, you, when you bought the house, okay, you finally ended up, you paid enough to get it.

44. 0:31:55

    But you don't know because you don't know who the, the other person that was, "Oh."

45. 0:32:00

    You're saying like in a bidding scenario?

46. 0:32:01

    Yeah, you get a, you get to, you know, counter offers and offers and counter offers and the things back and forth. Well then, when they go away, you, you can't determine that it was a foreign investment that, w- you were bidding against or buying against. So I'm trying to figure out how you-

47. 0:32:16

    You, you may have a hard time bringing a, a case in that scenario.

48. 0:32:20

    Yeah. Okay. Thank you.

49. 0:32:23

    Thank you, uh, Senator. Uh, Senator Rahman.

50. 0:32:27

    Thank you, Mr. Chairman. Now, I had a gl- I, I'm, I think this a great bill overall, but I'm looking at the section on line 60. Um, that line six- the section on, on that particular part. I'm trying to figure out when you said that a foreign investment vehicle, there's business controlled by a natural person, you know. How do you find out that the company's offering... I'm, I'm trying to find, gonna be a discrimination issues. It could be a foreign individual working for a company wants to buy a house and, uh, uh, you know, is legally staying in this country, you know, in the State of Georgia.

51. 0:33:01

    How are we gonna, uh, how are we gonna ide- identify that?

52. 0:33:05

    Yeah, so I would point you to line 64. Um, that would only trigger that if it's an interest in a single family residence to be used as a rental property So if there was a foreign national who wanted to purchase a home, uh, in Georgia or a foreign business that they wanted to use it for their, for somebody to, people to stay here as they're doing business in the state, that would not trigger on line 64. Uh, what we're looking to stop here is not the scenario I think that you're describing. What we're looking to stop would be foreign investment vehicles from buying single-family homes in Georgia with the express and explicit purpose of turning them into or owning them as rental inventory.

53. 0:33:43

    Well, I understand, but sometimes how do you know the intention? I mean, it's just, it's tough, you know? I, I'm, I'm trying to figure out, you know, it's gonna be, what kind of mechanism you might have it, you know, even before they buy or something.

54. 0:33:55

    Um, I don't know that you would know intention. You would obviously have pretty clear visibility if the house was a rental or if, or if it was not being used as a rental.

55. 0:34:06

    Can I ask one more questions? If somebody buy, you know, residential, you know, is intention of staying there, after a couple of years, the guy, person move and want to rental, what gonna be happen? Do you have any, you know... I mean, how you, how you get rid of property? You have to sell the property or something? I was just wondering-

56. 0:34:24

    You're saying if it was originally-

57. 0:34:25

    ... somebody bought it-

58. 0:34:26

    ... not purchased for a rental.

59. 0:34:28

    Yeah.

60. 0:34:28

    Yeah, I think that you would need to, um, you would be captured under this bill, and you would need to sell the property. If you were, if you were, if you're, if you were then trying to rent it, that would not be an option.

61. 0:34:39

    Would you take an amendment, someone, that particular one, that you give, give it, like, a year or something to sell it or some- you know, if, if, if that's the case?

62. 0:34:46

    I would be certainly open to that. I would suggest that either we have ledge counsel try to put something together in this committee, or we could discuss doing that as a floor amendment. But I would, I would not be opposed to that.

63. 0:34:57

    Thank you.

64. 0:34:59

    Thank you. Um, Chairman Hodges.

65. 0:35:03

    Thank you, Mr. Chairman. Thank you, Chairman Dolezal, for bringing the bill. Um, couple of questions. You mentioned that, um, as far as the need for this, you mentioned that recently that, um, entities owning, uh, large numbers of houses, 500 plus, accounted for 10 to 15% of purchases of the housing stock of, um, ho- uh, houses that were on the market in Georgia.

66. 0:35:33

    That's recently.

67. 0:35:34

    In, in Metro Atlanta.

68. 0:35:36

    In Metro Atlanta. Do you know the, um, the actual percentage of such homes of the total housing stock in Georgia?

69. 0:35:46

    I do not. A- as it relates to the institutional investors-

70. 0:35:49

    Right

71. 0:35:49

    ... I do not know a, a statewide number on that.

72. 0:35:51

    I was-

73. 0:35:52

    Well, no-

74. 0:35:52

    I mean, I think it's my understanding nationally, where 4 or 5% of homes are owned by such entities. And I was wondering how Georgia... I mean, I can understand what's happened in Metro Atlanta. Uh, I was just wondering how we stood up against, uh, other states, if we're, uh, much more than the national norm or not. You don't know?

75. 0:36:12

    So statewide, I do not know. I do know that in terms of i- i- if you were to broaden it, this conversation, to investors-

76. 0:36:19

    All right

77. 0:36:19

    ... and you were to kinda capture the s- the small investors and the large investors, Metro Atlanta leads the nation in the amount of single-family housing stock being purchased by those investors. And they're purchasing them, I would venture to say, almost exclusively for rental. You're not buying these houses just to keep them empty. I've seen numbers from anywhere to 25 to 30% of the housing units in Metro Atlanta in the last couple of years have been sold to investors and, uh, are either becoming or previously were rental property.

78. 0:36:50

    When you look at other states, uh, we are an outlier in terms of the amount of our transactions that have gone to investors.

79. 0:36:59

    In Atlanta or statewide?

80. 0:37:00

    Sorry. Yeah, I don't wanna conflate that. In Metro Atlanta.

81. 0:37:03

    Okay. Okay. Do you have any idea how many business enterprises own 500-plus homes?

82. 0:37:09

    I believe it's around 10.

83. 0:37:11

    10? Okay. And, uh, another question was in, in taking away tax credits, and it looks like taking away taxable expenses. You mentioned depreciation. If I under- if I read the bill correctly, depreciation and, um, and interest deduction and... Are-

84. 0:37:29

    Correct

85. 0:37:29

    ... is it the intention of the bill to try to get the existing companies to divest and increase the housing stock that's on the market? I mean, if I'm, if I own 500 homes and I can't deduct the expenses that I could deduct before, it might, the economics of it change, and is that, is that the intention?

86. 0:37:50

    I believe the economics of it do change. Certainly what we are recognizing in this bill, uh, is that we do not want to be giving essentially tax credits and handouts to these large institutional investors.

87. 0:38:03

    I, I agree with you, but-

88. 0:38:05

    As a policy position, if that results in divestment, then that results in divestment.

89. 0:38:08

    And not just the credits, though, but the deductible expenses that everybody else has, that I have. If I ha- if I own 25 rental homes that I have-

90. 0:38:17

    Right

91. 0:38:17

    ... same deal, right?

92. 0:38:18

    Correct. Yes, sir.

93. 0:38:18

    Okay. And then my last question, you have a carve-out for, uh, developers, builders who would build a subdivision, um, of, say, 500 homes. Um,

94. 0:38:32

    what about their tax credits, their deductions, their deduction of expenses? Does this affect them?

95. 0:38:38

    It does not.

96. 0:38:39

    It does not. Okay. Thank you, Chairman Del- Dolezal. I appreciate it.

97. 0:38:44

    Thank you, sir.

98. 0:38:46

    Chairman Burns.

99. 0:38:48

    Thank you, Mr. Chairman. Thank you, uh, Senator, for bringing the bill. Um, I think we agree we don't like regulations, and I think we agree that, uh, we don't like cause of action. And having said that, um, the, the challenge we have is we have a current environment that, uh, is detrimental to our state. So I appreciate the bill. Um, let's talk a minute about foreign affil- foreign entities owning property and their affiliates. Um- How do you, how do you, uh, address and, and attack the challenge that, uh, as has been commented, that we may not know who the actual buyer is?

100. 0:39:28

     Yeah, that's a, that's, that is a challenge. That is something difficult that would be, uh, we would need to exactly figure out how the enforcement mechanism would happen. I think that, um, the availability of data, uh, will, will help with that. Um, I- it- you can figure out pretty quickly what the, someone is not an entity that is domiciled in the United States.

101. 0:39:50

     Correct.

102. 0:39:50

     And so you could then use a process of elimination, I think, to determine that. Um, but, but what we're trying to get to here, and I'm not saying this is the perfect mechanism, and this may need to be improved over time as we get into the process of, of seeing this bill go into action. Uh, we are trying to prevent foreign entities from buying American homes that we believe should be for American families to own. And there are some mechanisms, I think, that people that wanted to bring these enforcement actions could use.

103. 0:40:20

     Um, perhaps some that I'm not aware of, but the way that I would do it is I would begin to look for entities by name that are in the tax records and cross-reference those with business registrations in, in the United States.

104. 0:40:31

     What, what role does the broker play in this equation?

105. 0:40:35

     Yeah. So the broker role-

106. 0:40:36

     I know, I, I saw in the, in the bill that they're responsible for making their potential purchasers knowledgeable about the legislation.

107. 0:40:43

     That's it.

108. 0:40:44

     Is that not true?

109. 0:40:44

     That's it, yeah.

110. 0:40:46

     So they're not, they're not, uh, deemed the enforcement mechanism would-

111. 0:40:49

     No, sir. Nope. They are simply, uh, on line 125, uh, instructed to give a timely disclosure of the client-

112. 0:40:57

     Correct

113. 0:40:57

     ... to the prohibition set forth in the article.

114. 0:40:59

     Correct. Yeah, and so the, who would the, who would the plaintiff be in, in a situation like this? A potential purchaser who was, uh, not successful, or?

115. 0:41:08

     I think that's one possibility. I think that it could be current tenants. Um, I think that the-

116. 0:41:13

     Current tenants of rental property?

117. 0:41:15

     I, I think that that's a scenario that you could, that would pass the standing test. Yeah.

118. 0:41:19

     Right. Okay. Thank you, Mr. Chairman. Appreciate the input.

119. 0:41:22

     Thank you, Chairman.

120. 0:41:23

     Thank you. Senator Rahman, you got a-

121. 0:41:25

     Yeah

122. 0:41:25

     ... another question?

123. 0:41:26

     One more quick question. The 500 numbers looks to me kind of high sometimes. Could be a company that, you know, uh, own maybe less than 500, could have a big asset of $100 million, you know, company, the buying home. I mean, you have, you concern, have any concern about that? I'm just wondering, you know, you want... I mean, there's a company could be 500, maybe barely at 500, but it's a large company in- investing it, you know, that owns, you know, $100 million asset or something like that.

124. 0:41:57

     Sure. W- w- we are tasked, um, in the legislative process with coming up with s- with numbers to put around laws that sometimes don't necessarily, uh, that you can't justify w- an exact number versus another number. The House had the number of 2,000. We had the number of 500. Uh, we are trying to capture entities at scale that we believe put the American family at a disadvantage, uh, when they're competing against these entities for ownership. Uh, 500 was a number that, in, in, in r- in drafting this bill, I determined, uh, represented a company of scale, um, that did not prevent the mom and pop rental companies from being able to acquire housing.

125. 0:42:40

     Um, y- you know, y- whether you, you could make an argument that that number could be 250, but, uh, the, the number that we have in the bill is 500.

126. 0:42:49

     Thank you.

127. 0:42:51

     Thank you, Senator. Got anything else? You, oh, you got one more question. Uh, yes, sir, Chairman Hodges.

128. 0:42:57

     Chairman Dolezal, what, what's to stop these folks from dropping to 450 instead of 500?

129. 0:43:08

     Nothing.

130. 0:43:11

     Okay. Thank you.

131. 0:43:15

     Senator Ginn?

132. 0:43:16

     Thank you. Uh, you know, 500's a good number, I, I guess. You know, you pick a number. But 25% ownership, that's, I mean, I, I would've thought that would've been, you would've wanted to use a 50% ownership or something like that. But in the bill, you specifically, you know, if there's, uh, above 25%, how... You know, is that-

133. 0:43:37

     Those are two separate things. So the foreign investment vehicle that references the 25%, that's actually, that's all ownership of foreign investment vehicles. And we wanted to, to not have 50% majority ownership. We wa- we were, again, getting a number that we believe got to substantial ownership. On the business enterprise piece, uh, that's on lines 26 to 29, there's no mention of the 25%.

134. 0:44:05

     Thank you.

135. 0:44:08

     You got anything else?

136. 0:44:09

     I do not, Mr. Chairman.

137. 0:44:10

     All right. We've got a couple folks signed up. I'm gonna give you guys three minutes, um, three minutes each to, to speak. First, we got Mr. Jim, uh, J- Jacoby from Parkland Communities.

138. 0:44:30

     Good morning.

139. 0:44:31

     Good morning.

140. 0:44:32

     And thank you, Chairman and members of the committee, for allowing me to, uh, opportunity to speak, uh, to kind of oppose this Senate Bill 463. Um, yeah, I'm here today really speaking on behalf of myself. I am a build to rent developer and builder, uh, a- and also s- on my building, uh, the peers in my building community, uh, at large. We do appreciate what the bill is trying to accomplish. We do, however, feel like it is, uh, creates a lot of collateral damage with the bill, and we think there's some unintended consequences that will relate, uh, that, that, that will be caused if this bill passes as is.

141. 0:45:09

     We do think that, um, by working with Senator Dolezal, uh, this just requires a lot more time and thought and effort in putting this thing together. Think, feels like it was put together pretty hastily, and we think it needs a lot of change in the bill. Um- One, I just wanna talk about one thing. Senator Dolezal started off talking about how there's a homeownership crisis, and technically there is not a homeownership crisis in Metro Atlanta and or the State of Georgia. And I think that's one thing to point out. This is a bill for the State of Georgia, not just the City of Atlanta.

142. 0:45:41

     Um, homeownership rates in the United States have increased from 2016 from 63.4% to 65.7%. However, Metro Atlanta's homeownership rate is 67%, so we're ahead of the national average. Yes, there are some few... There are some zip codes around Metro Atlanta that have a higher percentage rate of rentals ship, um, than homeownership, but at statewide, this is not a crisis by any means statewide. Um, if this bill is passed as is, this will be the most restrictive housing bill in the United States, more restrictive than anything you've seen in California.

143. 0:46:15

     Um, so, and also more restrictive than the, um, the current executive order that was issued by the president. I don't understand why we wanna supersede that. Um, I think the one biggest thing you're, you're seeing, what this bill really is, i- it covering is what we call in the business a scattered lot inventory, where there are investors buying scattered lots throughout, um, different neighborhoods. You have a neighborhood of 100 homes, and over time it can trans- it can transition to several rentals inside a neighborhood. That was not intended.

144. 0:46:47

     However, um, I would say that the people who are selling those homes are homeowners. Uh, they're not, uh, builders. Uh, most likely they're not builders. And so what you're doing is you're restricting who a homeowner or citizen of the State of Georgia, who they can sell their house to. And now this is a precedent-setting bill, and where does that precedent stop? Do we now restrict on who you can sell a business to? Do we restrict on who you can sell your farm to? And so I think we need to be very careful and tread lightly in that.

145. 0:47:17

     And then, um, you know, we've all seen the TV commercials on TV. You know, call today, get a guaranteed offer, quick close, easy move out. And, um, uh, and that is what's really motivating this. But I think if you pass the bill, what you're also gonna do is you're gonna s- you're gonna now inhibit housing starts, is what's gonna happen. 'Cause there are some new home builders that may sell the last 15 of their homes as balance sheet management and, uh, to an investment group.

146. 0:47:49

     But however, more, more than most likely, the people that will rent those homes can't afford to buy the homes. So what you're creating i, in reality is, uh, or I should say, you're really diminishing housing inequality, 'cause you're now allowing people that can't afford to be in the area, you're allowing them to be in the community, and you're allowing their children to have, go to, go to better schools. So, um-

147. 0:48:13

     Let's go ahead and I'm gonna go ahead and ask you guys, y'all got any questions for Mr. Jacoby? That was a- about four minutes there.

148. 0:48:21

     Yeah. Okay.

149. 0:48:21

     I'm trying to keep up with, uh-

150. 0:48:23

     No problem

151. 0:48:24

     ... uh, Senator Beach's, uh, 90-second deal. Um, we... I, uh, I, I apologize, uh, Mr. Jacoby, but-

152. 0:48:32

     It's all good

153. 0:48:32

     ... uh, no, you, you made some great points, and I appreciate it. Anybody got any questions for him?

154. 0:48:40

     All right, we appreciate you.

155. 0:48:42

     Is it possible to make one more point?

156. 0:48:43

     Yes, sir.

157. 0:48:44

     So one more point. If you think about the, the State of Georgia, uh, population of the State of Georgia is expected to increase, uh, from roughly today is 11 million to 14.7 million. That's a 33% increase in the total population of the State of Georgia. We don't need to do anything that inhibits housing and housing growth and housing supply. I think that's what this bill would, would, uh, ultimately achieve if passed as is.

158. 0:49:05

     Thank you. All right. We got Mr., uh, Austin Hackney from the Home Builders Association.

159. 0:49:17

     Thank you, Mr. Chairman, members of the committee. Uh, my name's Austin Hackney, here to represent the 3,800 member businesses around the state that make up the Home Builders Association of Georgia. And, um, they have asked me to come here today to oppose Senate Bill 463 for a couple of fundamental reasons. Uh, and the first of those is that, uh, our main mission here at the State Capitol is to help promote private property rights. A- and we see the right to acquire, hold, and dispose of property as one of the most deeply rooted liberties in American tradition.

160. 0:49:49

     So, um, the fact that the enforcement mechanisms of this bill are walking a constitutional tightrope like you have rarely seen in bills presented to you, I think is a, a strong indicator that, that the, uh, the right to private property i- is on the chopping block here. Uh, number two, we believe fundamentally that the government should not pick winners and losers in the marketplace. What we're talking about is limiting, uh, the transaction between a willing seller and a, a willing buyer.

161. 0:50:23

     Um, s- thirdly, the discriminatory treatment of business entities is something that our laws across the country, and certainly here in Georgia, um, protect, uh, a different treatment of LLCs and corporations from, uh, what we see with individuals. Um, with the foreign investment piece of the bill, um, uh, you don't need to hear from me about interstate and foreign commerce and the federal obligations that we have, uh, to, uh, to those transactions.

162. 0:50:55

     Uh, but as Mr. Jacoby said, the, the biggest issue that, that our trade association sees is the chilling effect on investment and economic growth. And, and I'll reiterate, uh, the speaker before me to say that, uh, th- the homeownership crisis in Georgia is actually a housing affordability crisis in Georgia, and there's a lot of different factors that go into housing affordability. Um, to say that competition in the marketplace is a bad thing is, is not one of the factors that's gonna help- ...

163. 0:51:26

     housing affordability. I, I do wanna take one moment to thank the author and the, and the, uh, folks that put the bill together for recognizing the difference between a company that puts more supply into the housing marketplace and those that are competing for existing homes. That's a point we've been trying to make here, uh, for a few years now. But, um, I'll close with this. Uh, and we talk sometimes in the building about, uh, a solution in search of a problem. Um, I know the developers that make up our membership would get three or four or five, uh, phone calls a day from investors trying to buy, uh, wholesale single family properties.

164. 0:52:03

     Um, the ones that I talk to haven't gotten those phone calls in a couple of years. So, um, my perspective is that a lot of these subdivisions that you're seeing come out of the ground and, and bringing renters or customers there were purchased four years ago, entitled three years ago, and are just now coming, uh, to fruition. So, um, from our perspective, we don't think that this is a s- a problem that requires such a questionably constitutional solution.

165. 0:52:33

     Thank you, Mr. Hackney. Uh, anybody have any questions? All right. We appreciate your testimony. All right, Ms, uh, Betsy, uh, Broadfield from the Realtors.

166. 0:52:47

     Do you mind if I bring up Jeff for questions?

167. 0:52:50

     Excuse me?

168. 0:52:50

     Do you mind if I bring up my colleague?

169. 0:52:52

     Absolutely. Absolutely.

170. 0:52:54

     Good morning, everyone. My name is Betsy Bradfield. I am with the Georgia Association of Realtors, and this is my colleague, Jeff Ledford, former real estate commissioner, and can take any questions about, um, our real estate brokers, 'cause I know you guys had some. Um, thank you to the chairman and the committee for having us here today. Um, I would like to be clear that Jeff and I do not represent Wall Street, and we do not represent private equity. We rise, uh, to have some concerns with the bill. We do oppose the bill, but we do not oppose the idea of the bill at all. So we represent 46,000 Georgia Realtor members across the state, and they live and work in this state, and we represent mom-and-pop landlords and property managers and those who live in those rental properties.

171. 0:53:35

     Our mom-and-pops also structure their LLCs, their rental properties in LLCs, the same way that a lot of these corporations do to protect themselves from liability, which is, um, what makes us a little bit nervous, and we wanna protect our mom-and-pop landlords from these unintended consequences of a rental ban. And I know there's been a lot of questions about how the 500 cap came up. Um, and I would say that real estate is the safest and surest investment I believe a person can make. And there are, in fact, people in the State of Georgia who have been incredibly successful in building their business, um, and their rental property business and have secured generational wealth, and they've done that through acquiring properties, and this will affect some of them.

172. 0:54:20

     Um, I would also request that the committee, before moving forward, just take a look into Georgia's TRS and ERS investments. The reason I say that is there are a lot of state retirement systems who are invested in what are called real estate investment trusts through REITs, and a lot of those REITs purchase property and, um, purchase rental properties especially, and they have incredible returns for their state employees. So, uh, the interest provision inside this bill, I would just ask you to take a look at that to make sure it doesn't affect TRS and ERS. Um, but we also wanna protect our real estate brokers.

173. 0:54:52

     And so for this committee, the way we would do that is that the same way that we addressed it in the foreign buyer bill that you guys passed a few years ago. We would make changes to our GAR forms, which is if you have closed a real estate transaction in the last couple of years, you've probably used a GAR form. It says Georgia Realtors up there in the top, and all of our Realtor members use that form. Um, and no one has been down here representing homeowners and home buyers, um, and bound, pounding the drum on the housing affordability crisis more than we have, and with our friends, the HomeBuilder, as Austin said.

174. 0:55:24

     And it is a housing affordability crisis. The median price of a home right now is $360,000. And I don't know about you, but I don't think that that is affordable for a first-time home buyer. And Senator Dolezal quoted the, um, a statistic from our National Association of Realtors, which is that the average age of a first-time home buyer in the United States is now 40 years old. And 360,000 being the median means that obviously there are homes on either side of that median, but that is not affordable for a first-time home buyer to be able to save up.

175. 0:55:54

     And, um, there are, of course, reasons that this sort of housing affordability crisis exists, and it has really started in 2018. Much of it is, in our opinion, artificially created from local governments, um, and their constraints in home building by requiring larger lot sizes and larger home sizes that only serve to drive up the cost. Much of it is also in, um, interest rates, which I lo- I would love if I could ask you guys to pass a bill on interest rates, but I cannot do that. Um, but we have a different sort of approach that we are working through in the House, would, which would be a tax structure to address mom-and-pops at 40% of assessed value and these large Wall Street investors at 100% of assessed value, with that money fully going towards the local government, to also potentially help them as the House looks at rolling back property taxes.

176. 0:56:41

     Um, this sort of tax approach would help refill those coffers that would, um, be drained by this, uh, property tax. So we'll stand for any questions, but we also have a lot of research into this. Um, I know you mentioned someone had questions. There is a Georgia State professor who says that 83%, or sorry, 83,000 Metro Atlanta homes are currently owned by these institutional investors. Um, our study was really meticulous in making sure that there was absolutely no mom-and-pop landlords in that study, 'cause that is what we fear most. And so we do, we looked in the six largest, um, and then some of those are privately owned, some of those are publicly traded.

177. 0:57:17

     Um, but we looked into those six companies to find their holdings in, in the State of Georgia. So we can happily share that with the committee as well.

178. 0:57:24

     Thank you. Do you know how many of those, uh, mom-and-pop investors, do you know how many of those own- 500 or more?

179. 0:57:32

     I do not know.

180. 0:57:33

     Okay. Thank you.

181. 0:57:35

     But we could get that for you if you would like.

182. 0:57:38

     Mm-hmm. Anybody else have any questions? Chairman Hodges.

183. 0:57:43

     Thank you for your, uh, testimony. Um, your opinion, I'd like to have your opinion on, um, the- the- the 500 number. If such investors were to drop back to 499, I mean, what effect does that have? I mean, do you still have-

184. 0:58:05

     So-

185. 0:58:05

     Do you still, do... I mean, do you s- do you have the same negative effects that, that, um, Mr. Ja- uh, Jacoby and, um, Mr. Hackney and, and you've been talking about?

186. 0:58:17

     So we definitely do fear large scale divestiture. So, um, what happened in 2008 was when a bunch of homes all hit the market at once and, you know, the real estate market was essentially crashed. So we fear a large scale divestiture of when they're forced to sell off those homes. I believe Senator Dolezal said that this bill does not require a large scale divesting of the properties.

187. 0:58:40

     Mm-hmm.

188. 0:58:40

     Um, it would affect some people who, who are at that $500 cap, and it would prevent them from obviously building more generational wealth through, um, through rental properties. Um, but I believe that that is a public policy commission, uh, decision ultimately of you all to decide what number that you want to assign it. Um, there are some, I know there are for sure some mom and pops who have 1,000, who have 1,200, who have 800, those kinds of numbers, and they're sometimes scattered across regions, um, of the state.

189. 0:59:12

     Sometimes they're, um, in one particular area. It just sort of depends on how they wanna structure their business.

190. 0:59:19

     Thanks.

191. 0:59:19

     Of course.

192. 0:59:21

     Any other questions? We appreciate y'all being here this morning.

193. 0:59:25

     Thank you.

194. 0:59:26

     Thank you.

195. 0:59:28

     Yeah.

196. 0:59:29

     All right.

197. 0:59:32

     I think this is the part where we're looking for, uh, looking to vote and looking for a motion.

198. 0:59:41

     Motion to pass.

199. 0:59:48

     Senator Bearden, motion to pass. Need a second.

200. 0:59:54

     Second.

201. 0:59:55

     Got a second. All in favor say aye. Aye. All opposed. Aye. H- Is that... Uh, raise your hand if on the aye part, please, supporting the bill. Supporting the bill.

202. 1:00:17

     Three, four. Okay. All right. Got them all counted. Ali got on to me last time about that. Um, all opposed, raise your hand, please. Thank you. All right. Um, Senate Bill 463 passes. We appreciate y'all coming this morning. Thank y'all. At this moment, we are adjourned.