For Newark homeowner Deborah Smith-Gregory, the past three years have been exhausting. Smith-Gregory said she receives about 15 to 20 calls a day from potential buyers inquiring about her home in the city’s up-and-coming South Ward. The problem is she’s never listed it nor is she interested in selling.
“It feels like we are being preyed upon,” Smith-Gregory said, describing the relentless calls as harassment. “Now we have proof of what we [suspected] and so you need to cease and desist.”
That proof was uncovered in a new report by the Rutgers Center on Law, Inequity and Metropolitan Equity that shows corporations are swooping into the city, purchasing 1-4 unit homes and converting them into rentals.
It’s a trend that grew out of the foreclosure crisis and is happening in predominantly Black and brown neighborhoods across the country, officials said. Newark is being hit particularly hard.
“Three of the largest investors are real estate companies that appear to be operating as new large-scale corporate landlords,” Allison Ladd, director of the Newark Department of Economic & Housing Develop, said at a press conference Wednesday.
The results of the report, which showed that nearly half of the city’s real estate sales in 2020 were to institutional buyers, got a swift response from Mayor Ras Baraka, who announced new aggressive measures that will combat the trends he said may not be illegal but are definitely not right.
“They are investing in those properties and raising the rent on those properties sometimes 100% to 200%” Baraka said.
The city is now looking to combat this trend in a number of ways, including urging the state to create a policy to address the impact of corporate ownership of private homes, rolling out legislation that holds property owners accountable who raise rent above 5% year over year and adding a deed restriction to all city-owned and land bank properties requiring them to be affordable.
The mayor also wants to make it unlawful to solicit without a homeowner’s permission, so that means a stop to those relentless phone calls coming in 15 to 20 times a day.
A crackdown on how these anonymous LLCs function within the city is also on the list. The mayor plans to present the legislative measures to the City Council as soon as this week.
Written by Andrew Ramos | Source: PIX 11 New York