If you want to rent a vacation home on some of Georgia’s priciest and most tranquil lakes this spring and summer, better move along bub. A bunch of them are no longer available.
And they may never be again.
That’s because homeowners are being told to stop renting to visiting vacationers at least on land owned by Georgia Power at Lake Burton, Lake Rabun, Lake Seed and more than a dozen other lakes the power company owns around the state.
It looks like the latest pushback against … what? The growing scourge of vacationing renters?
Short-term rental sites like VRBO, HomeAway and Airbnb have made it easy for homeowners to invite strangers into their abodes as a source of extra cash.
But they’ve also sparked backlashes. Hotel operators fret about competition from unregulated homeowners. Neighbors complain about unruly visitors next door and worry that rental properties will change the character of their communities.
Homeowner associations, condo groups (such as one in Atlanta) and some cities (including Savannah and Nashville) have jumped into the issue, contemplating limits on renting. Meanwhile, states including Indiana and Arizona are focused on ways to keep local restrictions in check, riffing on the idea that our homes are our castles.
The Georgia Power case is unusual, though, because at the moment it appears to only affect homeowners who don’t actually own the land their homes sit on. Believe it or not, that covers about three-quarters of homes at Lake Burton and more than 40 percent at Rabun, I’m told.
Those owners lease land from the utility, often for 15-year periods that are renewable.
It wouldn’t be a stretch to think that Georgia Power’s extra control has helped the northeast Georgia lakes retain their charm … and their exclusivity. But now some homeowners see it as overbearing.
For many years leases have included clauses that virtually forbid subletting or commercial activity on residential lots, many of which are second homes for metro Atlanta residents.
So it seems like homeowners who rented out their homes on VRBO should have known better.
But they and real estate agents around the lakes tell me that for years the power company’s local managers didn’t mess with rentals and may have even said they were generally OK.
“People have been renting out their houses on Lake Rabun and Lake Burton for decades,” said L.J. Craig, a real estate agent in nearby Clayton who also manages some home rentals.
In recent years, though, VRBO and other sites grew bigger followings.
A grand a night
One real estate agent told me there were 120 active rental homes on Burton alone. Peak summer rents could hit $500 to $1,000 a night.
In the last year or two, when new owners signed Georgia Power leases, the company has been pointing out the no-subletting clause, agents say.
But the real crackdown seems to have begun last fall on northeast Georgia lakes. Owners who listed homes on VRBO or HomeAway got calls from the power company demanding they stop. Certified letters followed.
Dozens of listings have since vanished, including one by the Stewart family.
“The property has been in my family since I was 6 years old,” said 54-year-old Parks Stewart, of Norcross.
Without rental income, keeping the home on Lake Seed “becomes economically not viable,” he said. He suggested that he and his brothers may be forced to sell.
Stewart told me that until the hoopla he never really looked at the lease, which the family didn’t have any choice but to sign if it wanted to keep its home. The structure is actually owned by his “84-year-old widowed mother,” he said. “Write it up that way.”
He asked a Georgia Power manager what triggered the sudden push to squash rentals. “He said, ‘We are worried that it turns into Daytona Beach where you can’t find a place to sit on the beach, like every weekend looks like the Fourth of July.’”
Not all rentals have stopped. Some remain on properties where residents own their lots. I wonder how many of those will last.
Bob Slayden, a metro Atlanta doctor, has a $1.6 million home on leased property at Burton. He told me he’s frustrated by the rental crackdown but feels helpless to fight it. And he said a Georgia Power official indicated that the enforcement action could be widened to curb rentals by people who own their land but have Georgia Power permits for docks.
Georgia Power isn’t sharing much publicly.
A spokesman sent me an email pointing out that the lakes exist to support power generation, which is why the utility controls the land in the first place.
“Whenever we identify that residents may be in violation of their lease agreements, via online rental websites or other sources, we contact them and work with each individual resident to remedy the situation,” he wrote. “We will continue to do so.”
I asked what led to the increased enforcement and what it is about rental properties that’s a concern. Georgia Power chose not to elaborate.
Michael McGaughey with The Lake Team at Harry Norman Realtors told me some lake homeowners apparently were frustrated by rowdy renters.
They “bought million-dollar homes up here for serenity and quiet: ‘I didn’t buy so I could be next door to a hotel.’”
Compared to metro Atlanta’s bigger and better-known Lake Lanier, Burton and neighbor Lake Rabun are as serene as afternoon tea.
They are the country club of Georgia lakes, as one writer once described them in the AJC. Families often hold property there for generations. But when homes hit the market, plenty go for more than $1 million. Heck, I found ones on leased land that sold for $2 million and $3 million plus.
I wonder whether the crackdown will change what people are willing to pay for homes there. Critics also warn that fewer rentals means fewer visitors to a corner of Georgia that could use the business in local shops and restaurants.
The rental crackdown also could cut into public accommodations taxes that help fund tourism marketing efforts, said Rabun County marshal Roy Lovell.
Actions have consequences.
I don’t know whether the power company thoughtfully contemplated adapting to the changing landscape of a sharing economy and then thought: “Nah.” But as local real estate agent Julie Barnett told me, “I don’t think Georgia Power is trying to be mean.”
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