Cleveland nonprofit fights to halt investor homebuying wave

"Some investors come in and they buy a home, they fix it up and they're a very good landlord. Or they sell it to an owner-occupant, Matt Klesta, senior policy analyst for the Cleveland Fed, told News 5 Cleveland. However, not all landlords fix up the houses and re-sell, leaving homes neglected. And, according to locals, absentee ownership has taken a toll."

"His research also illustrates racial disparities in regard to areas targeted for mass single-family home (SFH) investor purchasing, with rent burden measuring share of income spent on housing costs. In Cleveland's Collinwood neighborhood, Cleveland Neighborhood Progress (CNP) is taking a different approach buying and fixing up vacant houses for new homeowners, not investors. It's [going to] be a multi-year approach, KC Petraitis, CNP's vice president of real estate, told News 5."

"Petraitis said absentee ownership has taken a toll. When you don't know what your house looks like and you don't know what your tenants are doing on a day-to-day basis, that's a problem, he said. CNP refuses to buy occupied rentals to avoid displacing tenants and won't sell to investors. Its stated goal is shoring up so-called middle neighborhoods areas teetering between recovery and decline."

Investors buying single-family homes follow different models: some rehabilitate and sell to owner-occupants or operate as responsible landlords, while others leave properties neglected. Absentee ownership contributes to visible neighborhood decline and strains local communities. Local authorities have intervened by purchasing large numbers of homes, including a municipal authority buying nearly 200 properties and outbidding investment firms after an out-of-state landlord bankruptcy. Analysis illustrates racial disparities in neighborhoods targeted for mass investor purchasing and shows rent burden as a key measure of housing cost strain. Community organizations buy and rehab vacant houses for new homeowners, refuse to purchase occupied rentals, and avoid selling to investors to shore up middle neighborhoods and build homeowner equity.

Read at www.housingwire.com