People living in some established Columbus residential neighborhoods may be surprised to soon find “for rent” signs popping up outside homes where families previously owned those homes and put down roots.
The national trend of deep-pocketed investors buying up housing stock to turn them into rental properties has come to Bartholomew County, The Republic’s Andy East reported last week. After taking a deep dive into local property records He, East found that these new landlords — limited liability corporations with sometimes opaque ownership — are changing the local housing landscape.
“So far this year … companies with ties to Toronto-based Tricon Residential Inc. have bought 38 homes in Bartholomew County — including 19 in the Shadow Creek Farms neighborhood — in some cases paying around $70,000 to $100,000 more than the assessed value to acquire the properties, according to real estate records,” East reported. In the past two years, those companies have bought 59 homes in the county to flip to rentals. That’s one example of this trend.
Of course, anyone who’s getting up to $100,000 over assessed value in the sale of their home is likely thrilled. That’s the free market in action — the highest bidder tends to win.
Still, this must be exasperating for would-be first-time homebuyers, who already feel priced out of the local housing market.
As Sara Coers, associate director of the IU Center for Real Estate Studies told East, rents are now going for upward of $2,400 a month for homes that, a couple of years ago, someone could have owned by carrying a 30-year monthly mortgage payment of $700 or so.
We’ve seen dramatic runups and investor speculation in the housing market that ended with disastrous consequences, and not so long ago. Most of you are old enough to have lived through the subprime mortgage crisis of 2008, when housing prices crashed, leading to the Great Recession.
We know of no one predicting anything like that, but there are warning signs on the horizon. Just Tuesday, the National Association of Home Builders announced in a statement, “the market has entered a ‘housing recession,’” and “single-family housing starts will decline in 2022 for the first time since 2011,” Forbes reported.
A couple of things are happening at the same time that interest rates are rising: Single-family home construction has stalled, but apartment and multi-family unit construction rose 2.8 percent in July, the Census Bureau reported. So the market is favoring rentals, so much that even in this inflated market, rent-seeking outfits see a good long-term bet in bidding high for homes in targeted, established neighborhoods.
This is a far cry from the Bailey Brothers Building & Loan in “It’s a Wonderful Life.”
That said, in simply meeting our human obligation to one another, our community must have a reliable stock of adequate, affordable housing. Nonprofits, local, state and federal housing entities, faith groups and others can play vital roles developing creative, mission-focused partnerships and strategies that can help.
This must be ongoing work, because the need for affordable housing is vast and growing. And as rents rise, the American Dream drifts further out of reach for far too many who simply want a place to call their own.
