A Cincinnati agency can now add owner to their title.
The Port of Greater Cincinnati Development Authority agreed last month to pay $14.5 million for 195 homes in Cincinnati and surrounding Hamilton County, in an effort to thwart investors and keep tenants in their homes, according to the Wall Street Journal. It aims to restore them and resell them to low-income and middle-class tenants.
The agency has outbid more than a dozen investment firms to buy properties it plans to operate on a rental basis initially. Then, “We plan to sell them at the lowest possible price,” said Laura Brunner, CEO of the Port Authority.
The agency plans to help finance the purchase with tax-exempt bonds. He also hopes to team up with nonprofits to help with down payments, financial education and finding mortgage lenders.
The government program is one skirmish in a campaign to keep homes out of reach of professional investors who buy single-family homes and rent them out – often to tenants who can’t afford high down payments.
Publicly traded companies, private equity firms and thousands of retail investors now account for about 18% of all U.S. home sales, up from about 8% in 2009, according to Redfin.
Critics say they have helped drive up home prices while reducing the number of homes for sale. This complicates the life of future owners and aggravates wealth inequalities.
Cincinnati, due to its lower real estate prices than many cities, was prone to a rush of investors. The rush began after the 2008 financial crisis, when many residents lost their homes to foreclosure and prices plummeted.
Since then, five owners have vacuumed more than 4,000 single-family homes in Hamilton County, according to an analysis of property records by the Port Authority.
Community-based nonprofits have long tried to advocate for low-income Americans by buying homes and apartment buildings. With private investors on the prowl, local governments have entered the fray.
In California, the Oakland Community Land Trust has purchased homes from companies such as Invitation Homes Inc. and put their tenants on the path to homeownership. In Long Beach, the city partnered with a state agency to buy a new apartment tower for $144 million, then rent hundreds of units to middle-income families at lower rates.
[WSJ] – Dana Barthelemy