Georgia bill to let owners sue cities over homelessness

Mortgage and housing stakeholders in Georgia are watching closely as House lawmakers advanced a bill that would let property owners sue cities and counties they say are not cracking down hard enough on homelessness, public safety violations and immigration enforcement.

House Bill 295, sponsored by Athens Republican Rep. Houston Gaines, passed the House this week on a 98–75 party‑line vote and moved to the Senate with Crossover Day looming.

The measure would create a civil cause of action when local governments adopt pervasive, systemic, or organized policies of non‑enforcement against illegal camping, loitering, drug possession, shoplifting or so‑called sanctuary rules that limit cooperation with federal immigration authorities.

“If a local government refuses to do its job, we’re going to hit that local government in the pocketbook and put the money back in the hands of the property owners who have been harmed,” Gaines, who is running for Congress, said on the House floor.

Rep. Clint Crowe, a Jackson Republican who chaired the House Public Safety and Homeland Security Committee, said the measure is “not a blank check” for litigation.

“What it does is it creates a civil remedy for property owners when (a) local government formally adopts a policy of non-enforcement, when that policy causes documented financial harm … The local government has 30 days to act. If it refuses, the owner may seek relief in the courts. That is the process. It is measured. It is documented. It is not a blank check. It is a backstop,” Crowe said.

Damages would be capped at the amount of property taxes paid in the prior year, limiting worst‑case exposure but potentially multiplying claims across neighborhoods where encampments or crime clusters are concentrated around rental housing or small‑balance commercial assets.

Homelessness pressures and mortgage‑market implications

The debate came as homelessness reached a record 771,480 people nationwide on a single night in 2024, according to HUD’s Annual Homeless Assessment Report, even as Georgia’s own count showed about 12,290 people statewide.

Nationally, policy shifts – from local zoning rules to investor taxes – have begun to rival interest rates as drivers of housing and rental costs.

For lenders and servicers, measures like HB 295 could add another layer of municipal and political risk: higher legal exposures for cities may influence future property‑tax paths, service levels and neighborhood investment, all key variables in long‑term collateral performance.

If the Senate advances the bill, Georgia would push further into untested ground: using private civil lawsuits as a lever to force local enforcement in a housing market where policy, affordability and homelessness are already tightly intertwined.

For real‑estate investors and mortgage professionals, the outcome could help signal how far states are willing to go in tying public‑order debates to property‑level risk.

Critics warn of ‘trial attorney’s dream’

County officials and Democrats warned the bill would erode sovereign immunity, shift costs to taxpayers and do little to address the supply‑side drivers of homelessness or Georgia’s broader affordability challenges.

Todd Edwards of the Association of County Commissioners of Georgia said he views HB 295 as part of a disturbing trend of waiver bills.

“If it’s just an open, all-out waiver of immunity, that means local governments — thus taxpayers — can be sued,” Edwards said, calling such an approach “a trial attorney’s dream to be able to go after the public purse.”

Avondale Estates Democrat Rep. Karla Drenner said the proposal “exposes cities and counties to financial liability if they do not enforce certain laws aggressively enough, even when enforcement is not the right or effective response,” adding: “… accountability without resources is punishment.”

Rep. Gabriel Sanchez, a Smyrna Democrat, called the measure “a direct attack on the most disadvantaged communities,” saying, “This bill hates immigrants and the unhoused so deeply and uncompromisingly that it leverages against them the wealth and privilege that they are already denied.”

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