Where is land available for new development? Well, if it's in a prime market, it's probably land that already has affordable housing on it. And investors are buying those prime lots before families can, sending them searching for other affordable housing opportunities that are becoming more and more difficult to find.
The signs are becoming more ubiquitous, often in neighborhoods with aging housing stock, and where aging homeowners live on fixed incomes. You see fliers stapled to telephone polls or taped to bus stop shelters that say something like, “We Buy Houses for Cash.”
Cleveland’s Old Brooklyn, a middle neighborhood, faces that exact situation. Jeff Verespej, executive director of Old Brooklyn Community Development Corporation, which has been acquiring and rehabbing homes in Old Brooklyn and selling them at affordable prices back to new homeowners, calls these investors “We Buy Houses LLC.” They buy houses in all-cash deals, often for lower than the homes are actually worth, because they promise payment in cash by the end of the day.
In New York City, these kinds of investors accounted for 62 percent of all the affordable homes purchased in the city, according to a new report by the Center for NYC Neighborhoods. The report examines the precariousness of homeownership in New York City, ten years after the subprime mortgage crisis decimated many neighborhoods, especially those where homeowners were predominately people of color.
As of 2017, the report finds, New York homeowners tend to be wealthier, older, and whiter than most New Yorkers. More than one-third of all homeowners struggle to afford their monthly housing costs. Investor home purchases (most with all-cash offers) have doubled since the foreclosure crisis. Young and millennial home buyers are shut out of the housing market because of skyrocketing prices, stagnant wages, investor competition, and tight lending conditions, the report finds.Read More