Florida is gradually recovering from the economic recession, but a new threat from the collapse of the housing market is hitting the Tampa Bay area. Big investors have scooped up thousands of homes in recent years and are focused on charging the highest rents possible. The land grab by Wall Street has huge implications for neighborhoods throughout the region, and area leaders should remain vigilant to limit damage to the area's economy and quality of life.
The Tampa Bay Times' Drew Harwell reported that in the past two years, seven of the largest investors buying homes in the bay area have spent more than $1 billion, acquiring 6,800 homes in an unprecedented buying spree. Now these investors are pushing the envelope to return profits to Wall Street — with some pushing rents surprisingly high, evicting late-paying tenants and delaying routine maintenance. These investors landed here just as the average household spending on rent neared its highest point in three decades, consuming about one-third of a tenant's income, compared to 27 percent in 2004.
Investors and analysts say the investment in single-family houses meets a need by the so-called "rentership society" by providing homes to those unable or uninterested in purchasing them. Some families prefer single-family homes to apartments. And many younger workers prefer renting to being tied down with a mortgage. But this market is not entirely one of choice or convenience. Many renters are former homeowners who lost their credit and savings in the last housing bubble. For them, dealing with rising rents and obstinate landlords is the price they pay for bad financial luck or an earlier mistake.
As one of the areas hit hardest by the housing bubble — where the home ownership rate sank last year to its lowest point in 30 years — Tampa Bay is a guinea pig for this untested industry. Renters are sending monthly payments out of state and the local economy loses the spin-off benefits that come with investing in a family home.
State and local agencies should maintain strong consumer protection programs to ensure that renters are treated fairly. And local governments need to hold these investor-landlords to all property, health and safety standards meant to protect the neighborhoods. The foreclosure crisis left many eyesores, creating blight and trouble for local code inspectors and police.
These protections, though, are bandages compared to the larger job of fostering responsible home ownership. Planners need to develop smarter communities that reduce the reliance on automobiles. Governments also need to attract home buyers back to the urban core, where schools, transit, parks, shops and other amenities already exist.
Home ownership can create a connection in a neighborhood and increase its political clout; look no further than the neglect in Tampa's Sulphur Springs or the infamous "Suitcase City" area of northern Hillsborough to see the impact that heavily transient housing has on a community. As investor-landlords take buy up housing stock, local leaders need to keep these neighborhoods on their radar — and look for new ways to provide residents with more affordable and sustainable housing options.