Newark Mayor Ras Baraka said he would pursue a series of measures to combat the effects of the purchase of owner-occupied homes by large investors, who convert the homes into rentals.
“In cities and even suburbs across America, institutional investors are eroding the American dream of homeownership as they convert owner-occupied homes into corporately owned rental units,” Baraka said during a City Hall news conference. “In Newark, where we have worked hard for years to expand homeownership, we will do everything possible to combat this dangerous trend.”
Baraka said the pandemic heightened investor interest in residential real estate, which results in rapidly rising rents, decreased homeownership, reduced availability of affordable housing, renter displacement and less stable communities.
To mitigate the effects, Baraka said he will:
- Urge the governor, state legislators and the city council to create a coordinated state and local policy to address the effects of large-scale corporate ownership of private homes.
- Submit legislation to the council to make it unlawful to solicit offers without residents’ permission.
- Submit legislation to bring more transparency to LLCs that are purchasing private properties to keep them accountable.
- Submit legislation covering properties not under rent control to impose fees on renting and landlord registrations for property owners and landlords that increase rents above 5% year over year. These fees will be directed to the Affordable Housing Trust Fund and used to fund the creation of new affordable rental and homeownership opportunities for Newark residents.
- Add a deed restriction to all city-owned and Land Bank properties, that will require the properties to be affordable.
- Convene a meeting with investors, developers of color and community development corporations to develop further strategies on how Newark can work to invest in under-invested and disinvested communities.
- Review all accommodations proposed in a recent Rutgers report and develop an action plan to ensure community development takes place in all five of Newark’s wards.
Newark Mayor Ras Baraka – DAVID HUTTER
The mayor and other Newark officials have cited a report from the Rutgers Center on Law, Inequality and Metropolitan Equity, titled Who Owns Newark, to illustrate the current issue and to receive recommendations.
“Our report shows that the national trend of investor buying of one-to-four unit homes in predominantly Black neighborhoods is acute in Newark where almost half of all real estate sales were made by institutional buyers,” said David Troutt, Distinguished Professor of Law, and the study’s author. “This trend grew out of the foreclosure crisis that wiped out significant middle-class wealth in Newark. Mayor Baraka’s actions are important stapes toward maintaining affordability of rents and homeownership, discouraging speculation and demanding transparency of ownership.”
