Newark Mayor Ras Baraka announced on Wednesday wide-ranging initiatives to combat large corporations over the purchase of private homes. NEWARK, New Jersey (WABC) — Newark Mayor Ras Baraka on Wednesday announced wide-ranging initiatives to combat large corporations to buy private homes. I invest on behalf of my clients. I consult or invest on behalf of a financial institution.
To get directly to another BlackRock site, update your user type. Recently, BlackRock has been the subject of speculation, misperception, and even mistaken identity in media reports and on social media regarding our role in the U.S. UU. Several other large asset managers and private equity firms are very active today in buying single-family homes.
BlackRock is sometimes confused with them. As trust asset managers, we invest and manage capital on behalf of our clients across a wide range of U.S. Real estate markets, but buying individual homes is not one of them. BlackRock is a major investor in mortgage securities, helping to make capital available to individuals and families looking to buy homes.
BlackRock invests in several programs that provide financing to build new homes and add to the U.S. In addition, BlackRock invests in multi-family properties, apartment complexes and other residential real estate. As a global investment manager and trustee for our clients, our purpose at BlackRock is to help everyone experience financial well-being. Since 1999, we have been a leading provider of financial technology and our customers turn to us for the solutions they need when planning their most important objectives.
Christine Thompson lived in a cozy three-bedroom single-family home on a quiet residential street in Springfield for more than 50 years. But in January, the 72-year-old widow was forced to move after her husband's unexpected death left her in financial ruin, leading to a foreclosure auction. The house is now owned by a limited liability company called Ruby Realty, LLC, whose owners manage hundreds of rental units in Western Massachusetts. Thompson lives about 20 miles away in a rental unit, still injured by how she was treated by new landlords.
Changing ownership from a local resident to a group of investors is increasingly common in Massachusetts, from the cash-strapped neighborhoods of Springfield to Tony's neighborhoods in Newton and Nantucket, according to the GBH News Center for Investigative Reporting. Investors, whether buying cash or backed by bank loans, are playing an increasingly important role in the Massachusetts housing market. Data courtesy of The Warren Group. Investors are stimulated by high demand for housing, rising rents and rising home values, making it a lucrative business.
But housing advocates say the trend makes it more difficult for individual homeowners to buy and increases rents, so renters are being taken away from the price. Other problems arise with the model of using LLC to purchase homes. Shell Companies Tend to Be Worse Owners Than Individual Owners, Research Says. And the corporate structure obscures and protects its individual landlords, a corporate veil that creates additional headaches for housing advocates and government officials seeking homeowner accountability.
Rose Webster-Smith, executive director of nonprofit Springfield No One Leaves, says investors are also buying in the hope that home prices will rise because of the recently opened MGM casino and talks about a possible new passenger railway connecting East and West Mass. Speculators are increasingly buying foreclosed homes, he said, and pushing homeowners, inflating property values and rents in a city where about a quarter of people live in poverty. When investors buy foreclosed homes, low-income residents are often driven out with few options to pay for increased rents. The increase in investor purchases has created controversy on the island, known for its increase in vacationers during the warmer months.
Earlier this month, members of the municipal meeting decided to implement a new registration and permitting system for short-term rentals after community members expressed concern about the influx of corporate investors. The members of the municipal meeting presented two other proposals at the meeting that could have created more restrictions or opened the island to more investors. Anne Kuszpa, executive director of nonprofit Housing Nantucket, said she hopes the discussion will lead to solutions that more islanders can agree on in the future. Across the state, approximately two-thirds of all commercial purchases of residential real estate were single-family homes.
It's part of a national trend in which those homes accounted for 75 percent of all purchases by real estate investors in the third quarter of last year, a record, according to property tracker Redfin. Sheharyar Bokhari, senior economist at Redfin, told GBH News that speculators are making it increasingly difficult for families to compete. The increase in residential home sales by limited liability companies has drawn attention to the business structure itself. Many buyers use LLCs because they are relatively easy to set up, provide tax benefits, and protect homeowners from personal liability.
Nonprofits and nonprofits use them to develop. But lack of transparency in ownership has become a growing problem in real estate, linked to money laundering and negligent landlords who cannot be immobilized. Companies are required to file documents with the state, identifying the name and address of a “resident agent.”. They can, but are not required to include the names of members or managers authorized to file documents.
Massachusetts housing advocates say they spend hours trying to extract property information from state applications. Some states, such as New York, are considering implementing their own laws to increase transparency. Lawmakers introduced a bill in March that would require LLCs to disclose names of owners to the state. Assemblywoman Emily Gallagher said in a news release.
It recently released new research that shows that rental housing LLC ownership is more prevalent in poorer communities, such as Springfield, across the country. In January, Thompson packed up and moved in with her family, her dog and two cats, relocating to an old country house in a neighboring town that she rents. She's still recovering from the move that separates her from everything she knows. Ruby Realty co-owners Matthew Tortoriello and Kevin Shippee say they did everything they could to help Thompson solve his housing problems.
When they couldn't help her buy back the house, they said they tried to help her find a new place. They say they started buying homes in Springfield because of low house prices and high return on investment. They also made money on home improvements through the city's judicial administration program aimed at fixing abandoned and vacant homes. The program allows private companies to repair homes when homeowners and banks are unable or unwilling to do so.
But GBH News reported in March on growing concern that the program is pushing some low-income homeowners in the process. They say they recently bought a third investor who helped them when they were starting out. They say they have nothing to hide. The structure of the LLC helps them protect their investments by separating real estate agreements, which currently involve about 250 rental units, and allows collaboration with other investors.
They are proud of the work they do in a community plagued by abandoned and empty houses. But his presence on social media has irritated some housing activists. The partners have accounts under the name “Two Guys Take on Real Estate”, with nearly 900,000 followers on TikTok. Among the videos are posts about how much money they have earned, what they describe as “bad” and “dirty” tenants, and a tour of a foreclosed house, full of garbage, toys and children's clothes, that had been occupied when they bought it.
But housing activists like Webster-Smith say the company stands out for its disdain for renters and homeowners. She says she has been tracking her purchases for years, worried about her business practices. Tenants tell you Yellowbrick managers don't keep their properties until tenants threaten to take legal action, and that they will try to evict residents without giving them proper legal notice. Tortoriello and Shippee say they pride themselves on maintaining their properties, but they can't fix what residents don't tell them.
They say homeowners often think they can stay in their homes longer than expected. Webster-Smith says many renters are too afraid to talk about the problems that come with their new landlords, are worried about rent increases or other retaliation. Meanwhile, as federal pandemic aid runs out, Webster-Smith says his office is being further flooded with landlords and renters facing eviction with nowhere to go because many of their homes are being converted to business investments. Boston University journalism students Grace Ferguson, Eliot Hay, William Holmes, Sebastian Jaramillo, Mia Khatib, Christian Metzger, Avanti Nambiar, Ryan Noel, James Paleologopoulos, Jamison Sapp and Luwa Yin contributed to this report.
McKim is a senior investigative reporter at the GBH News Center for Investigative Reports. It focuses on social justice issues, including criminal justice, child welfare, sex trafficking and personal debt for print, digital and television media. Small groups of neighborhood volunteers are preventing businesses from buying single-family homes, rewriting homeownership rules to thwart investors' buying of suburban homes. If you want to explore your options, you can always see what some cash buyers are willing to offer to get an idea of what you could gain from a faster trade.
These companies buy your house very quickly, so if you believe the adage that time is money, maybe a quick offer seems more than fair to you. This lack of transparency between buyers can make it much more difficult for residents to keep track of who is the real owner of the building in which they live. The proposed package of measures is designed to reduce large-scale investor purchases of private homes and strengthen homeownership in Newark. If your home needs serious repairs that you can't afford to cover, or if you need to sell it right away, companies that pay cash for homes are a good option.
Everything is designed to help avoid paying two mortgages at the same time or trying to buy a home while the old one is selling. Real estate investment groups are buying an increasing proportion of homes and renting them, in some cases to families who had dreamed of owning their own homes. Most of his constituents are renters hoping to buy homes, and they were disappointed when a new development of more than 200 homes announced a change to “build to rent,” meaning the units would be long-term rentals, he said. The company acts as an intermediary, connecting homeowners who want to sell with interested members who could make a purchase offer.
Institutional purchasing in Georgia has focused on a circle of middle-class black suburbs south of Atlanta, according to research by Brian An, assistant professor of public policy at Georgia Tech. Flyhomes is a brokerage agency that helps clients buy a new home before selling the one they currently live in. Three of the biggest buying investors are real estate companies that appear to be operating as “large-scale new corporate owners,” researchers said. .