Small groups of neighborhood volunteers are blocking companies from buying single-family homes.
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These groups, called homeowner associations, spend much of their time enforcing rules related to things such as lawn care and parking. But they often have broad powers to regulate how homes are used, The Wall Street Journal reported.
Investors are also making it more difficult for local families to buy houses, these groups say.
Homeowner tactics include placing a cap on the number of homes that can be rented in a particular neighborhood, or requiring that rental tenants be approved by the association board. In most cases, associations need at least a two-thirds majority to pass these measures.
In Walkertown, N.C., near Winston-Salem, members of the Whitehall Village Master Homeowners Association are trying to amend their covenants to require new buyers to live in a home or leave it vacant for six months before they can rent it out. This move, they believe, would effectively prevent investors from buying any more houses.
“They’re coming in, and they’re basically bullying people out with cash offers,†said Chase Berrier, the association’s president who is leading the effort. He said some of the homes in the subdivision owned by investors now look shabbier, and absentee owners are hard to contact to resolve problems.
Investor purchases have been rising in recent years and accounted for more than one in five home sales in December, according to housing research firm CoreLogic. Their effect on the housing market and local neighborhoods has become a hot-button issue across the country. Home prices have also risen at historically high rates during the pandemic, and would-be buyers say they have a hard time competing with companies that pay in cash.
These new rules adopted by homeowner associations for single-family homes are already common in condominium and co-operative housing communities, especially in New York City, where many co-op boards limit investor purchases and rentals in their buildings.
It is hard to know exactly how many associations have proposed measures to block investor buyers, but they likely number at least in the thousands. ■