It's gotten harder and harder to be a prospective first-time homebuyer or renter looking for a house, both in Ohio and across the country.
There are a lot of factors at play in that, but leaders and community groups say one major reason involves large investment companies buying up affordable single-family homes — eating up inventory for first-time buyers — while sometimes raising rents for tenants and neglecting maintenance.
Major Ohio cities like Columbus, Cleveland and Cincinnati have seen real estate investment trusts buy up large numbers of single family homes in recent years. Data from the Pew Research Group suggests investors bought 33,000 homes across the state in 2021 alone — 21 percent of Ohio home sales that year.
It's a concern nationwide, too. A study by Metlife Financial Management suggests as many as 40 percent of single family homes could be owned by institutional investors by 2030 if trends continue.
But a bill by U.S. Sen. Sherrod Brown (D-OH), called the "Stop Predatory Investing Act," would block federal tax breaks on interest and depreciation for companies that own 50 or more single-family rental homes. Brown says the move would make it less profitable for large-scale investors to buy up big numbers of homes and make money on them without doing maintenance. Rental homes already owned by companies, newly constructed houses and those using Low Income Housing Tax Credits would be exempt.
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Brown cited data from Cleveland, where the issue is prevalent. Institutional investors own 70 percent of homes in one ZIP code there.
Cincinnati has also seen a significant part of its single-family home inventory purchased by investors.
"Cincinnati knows all too well what this is," Brown said Monday during a news conference in the neighborhood of East Price Hill. "In 2021, the last year we have complete data at this point, investors bought 15% of homes, and nearly 50% of homes in some communities like Price Hill. ... It drives up prices and makes it harder for relatively low-income families. That's where they prey on people."
Brown spoke on the porch of a home that had been owned by an institutional investment company. The Port recently purchased the property along with 193 others that had gone into receivership. Port officials say the homes had seen little to no upkeep and were in very poor condition. The development agency is working to rehab the homes and help families who had rented them become homeowners if they choose to.
Cincinnati Mayor Aftab Pureval says the city is working to hold investment companies accountable. It's filed lawsuits against two large landlords in the last year and is taking other measures as well, including stepped-up code compliance efforts.
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"Our upcoming Access to Counsel Program will help level the playing field in eviction court and keep tenants in their homes, and we've increased funds for supporting first-time homebuyers with down payment assistance," Pureval said. "But this is a significant trend throughout the nation."