As rents jump in Cincinnati, Congress seeks local testimony on impact of investors

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A for rent sign outside a house on Ashbrook Drive in West Price Hill owned by a corporate investor that owns more than two dozen other properties on the same street.

Rents jumped higher in Cincinnati than any other metro area in the country in June, while local home prices hit another new high.

Now Congress wants to know what role institutional investors might be playing in exacerbating the housing affordably crisis in the local area and nationwide.

Laura Brunner, CEO of The Port of Greater Cincinnati Development Authority, will be among a handful of experts testifying Tuesday before the Senate Committee on Banking Housing and Urban Affairs about the dramatic impact investors are having on the housing market.

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Brunner’s prepared testimony will include attachments from The Enquirer’s series on corporate real estate investors buying single-family homes and converting them to rentals, she said.

During her testimony, Brunner plans to share figures showing up to 50% of the homes in some neighborhoods of Hamilton County are owned by investors, severely limiting the inventory of for-sale housing and forcing many would-be homebuyers to rent at inflated rates.

Laura Brunner, CEO of The Port Authority of Greater Cincinnati

“Our low home values and high rental market make these properties attractive,” Brunner stated in her prepared testimony. “It’s a cash cow for investors but a money pit for renters.”

Brunner said investors typically don’t live in the properties they buy and don’t have the same vested interest in maintaining the properties as traditional buyers who intend to live in the houses.

That can lead to housing code violations and blight that drive down property values and living conditions in some neighborhoods, she said.

“How devastating is that for a community when you have up to 50% investor-owned properties?” Brunner asked rhetorically. “Just the stability of the neighborhood is at risk.”

Neighborhoods where a majority of residents are Black have been heavily targeted by investors, according to Brunner, who blamed investors for increasing the financial burden on Cincinnati’s predominantly Black renters and widening Cincinnati’s already cavernous Black-white homeownership gap.

“Access to affordable rentals and the ability to save enough money to purchase a home have become increasingly hard today, partly due to institutional investors infiltrating the housing market,” she said.

To help address the problem, Brunner said, The Port earlier this year issued $14.5 million in bonds to purchase 194 single-family homes previously owned by a California-based real estate firm that went bankrupt.

The public finance agency plans to rehab the houses and sell them at affordable prices to buyers whom The Port will help qualify for home loans.

“We couldn’t help but see this opportunity as the antidote to the threat,” Brunner said.

Brunner was invited to appear before the Senate committee for the hearing entitled: “The Rent Eats First: How Renters and Communities are Impacted by Today’s Housing Market,” by the committee chair, Sen. Sherrod Brown, D-Ohio.

Senator Sherrod Brown listens during the transportation round table with Vice President Kamala Harris on Friday, April 30, 2021 at the University of Cincinnati in Cincinnati.

Other witnesses scheduled to testify include professors Matthew Desmond and Maurice During of The Eviction Lab at Princeton University;  Rosana Morey, a small property owner; Darion Dunn, managing partner at Atlanta-based real estate firm, Atlantica Properties; and Diane Yentel, president and CEO of the National Low Income Housing Coalition.

This article originally appeared on Cincinnati Enquirer: Investors to blame? Cincinnati rents climb faster than any other metro