Newark launches initiatives to stop corporations from buying private homes

Wednesday, May 4, 2022

Newark taking steps to stop corporations from buying private homes

Newark Mayor Ras Baraka on Wednesday announced wide-ranging initiatives to combat large corporations from purchases of private homes. Darla Miles has the story.

NEWARK, New Jersey (WABC) -- Newark Mayor Ras Baraka on Wednesday announced wide-ranging initiatives to combat large corporations from purchases of private homes.

The proposed initiatives are in addition to the mayor's numerous programs to increase homeownership, prevent evictions, avoid gentrification and make housing in Newark more equitable.

Baraka said the COVID-19 pandemic accelerated a dangerous decade-long national trend in residential real estate, and in cities and suburbs, corporations are buying up millions of owner-occupied homes and turning them into rentals.

He said the result is rapidly rising rents, decreased homeownership, reduced availability of affordable housing, renter displacement, and less stable communities.

The package of proposed measures are designed to reduce large-scale investor buying of private homes and bolster homeownership in Newark.

Baraka praised "Who Owns Newark," a research report authored by law professor David Troutt, who serves as director of the Rutgers Center on Law, Inequality and Metropolitan Equity (CLiME) and is a member of the city's Equitable Growth Advisory Commission for providing data and recommendations to inform the city's response.

The city will work with the Equitable Growth Advisory Commission to address issues raised by "Who Owns Newark."

"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. "In Newark, where we have worked hard for years to expand homeownership, we will do everything possible to combat this dangerous trend. The CLiME report signals that Newark must create stronger and more equitable laws, regulations, and policies to ensure that residents share in the growth of our city."

Baraka announced the city will:

--Urge the governor, state legislators, and the Municipal 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 Municipal Council to make it unlawful to solicit offers without residents' permission (e.g., through mail, knocking on doors, phone calls).

--Submit legislation to the Municipal Council to bring more transparency to limited liability companies that are purchasing private properties to keep them accountable.

--Submit legislation to the Municipal Council covering properties not under rent control to impose fees on renting and landlord registrations for property owners and landlords that increase rents above five percent 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, which will require the properties to be affordable.

--Convene a meeting in the coming month 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 recommendations proposed in the CLiME report and develop an action plan to ensure community development takes place in all five of Newark's wards.

Among the work the city has done to provide affordable housing and home ownership are:

--Doubling the Live Newark Program to help residents become first-time homebuyers.

--Implemented the Neighborhood Development Program, which turns city-owned land into residential and affordable housing.

--Allocated a $20 million investment to create housing affordable to residents at a $34,000 income level.

--Using Land Bank properties to create Section 8 homeownership opportunities.

--Created the NJ Forty Acres and a Mule Fund (NJ FAM Fund) that will invest $100 million into real estate development and small business development for Black and Latinx partners.

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