When Investors Buy Up the Neighborhood
Preventing Investor Ownership from Causing Neighborhood Decline
This report by May 8 Consulting and PolicyLink examines the issue of investor purchasing of foreclosed and distressed properties, presents a set of best practices and promising approaches being used in communities to prevent irresponsible investor ownership from leading to neighborhood decline, and makes recommendations about what stakeholders in the Twin Cities can do to address this challenge.
The Twin Cities is an excellent case study for this issue because the region is a forerunner in developing and testing solutions to the foreclosure crisis. Our research focuses on the neighborhoods of North Minneapolis and East St. Paul, which are low-income communities of color in the region that have been hit the hardest by foreclosures, vacant properties and upheaval in the housing market. While this report is grounded in the conditions and strategies of Minneapolis and St. Paul, it contains information and tools that can be used by other communities that are trying to determine how to address this issue.
The report is organized as follows:
• What is the Problem? Investor Ownership and its Challenges describes investor ownership business models that present challenges for communities, and explains some of the barriers to addressing investor ownership.
• Strategies to Prevent Irresponsible Property Investors and Neighborhood Decline presents a framework for taking action against irresponsible investors, describing 36 strategies that communities can use as well as lessons from unsuccessful efforts.
• Investor Ownership in the Twin Cities presents case studies of investor ownership and community strategies underway.
• Recommendations for the Twin Cities presents a series of actions for local stakeholders.