The Port is buying nearly 200 rental homes with plans to make the tenants homeowners
The Port of Greater Cincinnati is buying nearly 200 homes with the goal of selling each property to the family living there as renters. It's an unusual move aimed at preventing a large investor from swooping in to evict tenants and raise the rent.
"We didn't go looking for this, it came to us," said Laura Brunner, president and CEO of The Port.
Los Angeles-based Raineth Housing is foreclosing on the 194 properties, and The Port was one of about a dozen bids to buy the portfolio of homes.
"We know for a fact that some of the potential buyers had already told tenants 'Hey, get prepared to move as of January 1, because we're going to start evictions and raise the rents,' " Brunner says.
The Port will keep rent at the same level while partnering with local nonprofits to get residents ready to purchase each property.
"Some of them probably already have the capability of buying, they just haven't had an opportunity because there's so few homes available in that price range," Brunner says. "Others will need to go through homeownership training and perhaps work on their credit score [or] identify sources for down payment assistance."
Nonprofit partners include Working in Neighborhoods, Price Hill Will, Cincinnati Metropolitan Housing Authority, Talbert House, Legal Aid and more.
The Port is taking on about $14.5 million in debt for the project. Brunner says that's part of what makes this "unprecedented" — most affordable housing projects require significant public subsidy, but The Port can take on these properties on their own financial strength.
Brunner says "institutional investors" are becoming more common: 1 in 6 home sales in Hamilton County in the second quarter of this year were by large investors.
"We see these investors take an affordable home ownership opportunity and convert it into a higher price rental unit," Brunner says. "That's bad all the way around — bad for the neighbors, bad for the renters that don't have somebody that's attentive to their needs, that lives out of town."
The Port typically acquires and develops vacant properties, both industrial and residential. Day-to-day management of the newly acquired homes will remain with Colliers, a real estate broker that has served the tenants for the past 10 months during the foreclosure process.
Eventually, Brunner says, property management will transition to The Port.