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Cincinnati officials ask Ohio Senate for help on real estate investment trusts

Pixabay

One issue was top of mind for many speakers at a hearing of Ohio Senate Select Committee on Housing about the state's housing crisis Thursday in Cincinnati.

Cincinnati officials, nonprofit leaders and residents touched on investment companies buying up large numbers of properties, including single-family homes.

Critics say some of those firms — sometimes called real estate investment trusts — do little or no maintenance on their properties and take away homeownership opportunities by buying up large numbers of single-family homes.

"Their business model, as it's playing out in Cincinnati, is to maximize profit while providing minimal and insufficient maintenance," Cincinnati Deputy City Solicitor Erica Faaborg told the Senate committee. "They expose our residents to unhealthy and unsafe housing conditions. This model is also harmful to Ohio because it eliminates opportunities for homeowners to buy a home."

Faaborg said one such firm owned more than 10 percent of the single-family homes in neighborhoods like Price Hill and Westwood.

The city of Cincinnati has taken some of those companies to court for substandard living conditions. But Faaborg and other officials said finding out who is behind the companies can be difficult.

"Help us understand who owns these properties, and we can do a lot on our side of things," she said. "Whatever legislation can be considered to require that entities identify who they are and who they are affiliated with will go a long way for the work that we do."

Ohio Sen. Louis Blessing III, a Republican, is on the housing committee. He's introduced legislation that would levy new fees on owners of more than 50 rental properties and require greater transparency for such companies.

"Really, it is the financialization of housing that is the problem," he said during the hearing. "I think we need to be continuing to look at that and not ignoring all of these side effects."

Other speakers at the hearing touched on property tax increases, the difficulty in developing housing for moderate to middle-income residents in Greater Cincinnati, and other housing issues. The housing committee will hold similar hearings throughout Ohio.

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