Neighborhood groups are reportedly joining together to prevent investor companies from purchasing suburban homes.
Homeowner associations, small groups of local volunteers, claim the increase in home purchases by rental investors has not only made certain communities less desirable to live in but has also presented greater challenges for families looking to buy a home, according to The Wall Street Journal (WSJ).
“They’re coming in, and they’re basically bullying people out with cash offers,” said Chase Berrier, President of the Whitehall Village Master Homeowners Association in Walkertown, North Carolina. The increase in housing during the pandemic has left potential buyers at a disadvantage when competing with companies able to pay in cash, according to WSJ. Housing prices rose 18.2% from Jan. 2021 to Jan. 2022.
The US Housing Affordability Index has plunged to its lowest level since 2008. Pres. Biden & his progressive collaborators have made housing unaffordable. That’s why Biden is tanking in the polls. https://t.co/IOYVU9GTFX
— Steve Hanke (@steve_hanke) April 18, 2022
Investor home purchases accounted for more than one in five purchases in December 2021, according to housing research firm CoreLogic.
Housing analysts claim blocking investors from neighborhoods would hurt them since they tend to be less wealthy than homeowners, according to WSJ. “There’s a pretty deep and pervasive social stigma against renters,” said Jenny Schuetz, a senior fellow at the Brookings Institution. (RELATED: Concerned About BlackRock Pricing Out Home Buyers? Wait Until You Hear How Connected They Are To The Government)
Homeowners associations have already taken measures to restrict renters from further neighborhood housing purchases. Since 2019, about 30% of the more than 1,000 amendments from associations across various states involved leasing, usage, and rental restrictions according to an analysis by the real estate technology company InspectHOA for WSJ.
In turn, the real estate industry has worked to pass legislation in states such as Tennessee, Georgia and Florida that aims to deter associations from retroactively banning investors once they have already purchased and begun renting a home, according to WSJ.
“The only real purpose of restricting rentals in a given community is to keep renters out, actions which in our view are both harmful and dangerous,” said David Howard, executive director of the National Rental Home Council, a landlord trade group.