Homeowner groups seek to stop investors from buying houses to rent

Crossville TN

Description

Homeowner associations believe rental investors' home purchases have led to a decline in property management. These groups, called homeowner associations, spend much of their time enforcing rules related to things such as lawn care and parking. But they often have broad powers to regulate how homes are used. Some of these associations now believe that the rise in home purchases by rental investors has led to a decline in property maintenance and made their neighborhoods less desirable. Investors are also making it more difficult for local families to buy houses, these groups say. Homeowner tactics include placing a cap on the number of homes that can be rented in a particular neighborhood, or requiring that rental tenants be approved by the association board. In most cases, associations need at least a two-thirds majority to pass these measures. In Walkertown, N.C., near Winston-Salem, members of the Whitehall Village Master Homeowners Association are trying to amend their covenants to require new buyers to live in a home or leave it vacant for six months before they can rent it out. This move, they believe, would effectively prevent investors from buying any more houses. "They’re coming in, and they’re basically bullying people out with cash offers," said Chase Berrier, the association’s president who is leading the effort. He said some of the homes in the subdivision owned by investors now look shabbier, and absentee owners are hard to contact to resolve problems. Investor purchases have been rising in recent years and accounted for more than one in five home sales in December, according to housing research firm CoreLogic. Their effect on the housing market and local neighborhoods has become a hot-button issue across the country. Home prices have also risen at historically high rates during the pandemic, and would-be buyers say they have a hard time competing with companies that pay in cash. HOUSING MARKET 'STARING INTO FACE OF PERFECT STORM,' EXPERT WARNS Some housing analysts say that blocking investors from neighborhoods could end up hurting renters, who are often less wealthy than their homeowner counterparts or who struggle to find affordable housing. "There’s a pretty deep and pervasive social stigma against renters," said Jenny Schuetz, a senior fellow at the Brookings Institution. It is hard to know exactly how many associations have proposed measures to block investor buyers, but they likely number at least in the thousands.