Ohio bill prohibits ‘corporate sleep owners’ from bidding on foreclosed homes

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Columbus, Ohio (WCMH) – Until a landlord shows up with a hammer and a nail in a tenant’s apartment, a new Ohio bill may prohibit him from buying another home to put on the market rental.

Introducing State Senator Louis Blessing (R-Colerain Township) Senate Bill 354 on Thursday, July 14, which would prevent homeowners or landlords with unresolved code violations or unpaid fines from bidding on a foreclosed home in Ohio, ostensibly to prevent nonchalant or absentee homeowners from picking up and neglecting future properties.

“Nobody should be in a position to discredit houses and then decide, ‘Well, we’re going to bid more,'” Blessing said. “In my opinion, this is a huge win for the community because it forces bad actors to clean up their act if they want to get these properties cheap in the foreclosure auction process.”

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The bill is Blessing’s second legislative effort, he said, to address the adverse effects that can come from the foreclosure of single-family homes in Ohio by private, out-of-town investment firms — whether it’s increased maintenance issues or increased rents.

In Ohio’s three largest cities — Columbus, Cleveland and Cincinnati — real estate investors funneled about $750 million into buying single-family homes in 2021, according to a analysis by real estate company Redfin.

Those investors accounted for 16% of Franklin County single-family home purchases in 2021, more than double its rate six years ago, Franklin County Auditor Michael Stinziano told NBC4 in May. That percentage is even higher in majority-minority neighborhoods, he said.

“It’s something that we believe is in response to the impact of COVID and the housing market and where outside money can come in and make a big dent in housing availability,” Stinziano said.

SB 354 “overlaps” Blessing’s previous legislation, Senate Bill 334which would force private investment firms to wait 45 days before placing a bid on a foreclosed home – giving local residents and nonprofits a head start in the bidding process, said he declared.

“You start reading and hearing stories of people trying to buy houses and getting, you know, shut out because they lost to an institutional investor who was able to offer $50,000 cash above the price asked,” Blessing told NBC4 in May.

For the first quarter of 2022, real estate investors were even bigger, with one in four homes in the Columbus area going to private companies, according to Carlie Boos, executive director of the Affordable Housing Alliance of Central Ohio.

The area’s housing shortage, coupled with what Boos called “the rise of the Wall Street landlord,” is creating unsanitary and unsafe conditions for renters.

The Central Ohio region needs 14,000 to 17,000 homes each year, but as of 2020 only about 10,800 homes have been built – a deficit that cannot accommodate the nearly 70 new residents who move into it every day. central Ohio, according to Jon Melchi, executive director. of the Central Ohio Building Industry Association.

With few housing options and soaring rental prices, Boos said it’s easier for landlords to take advantage of their tenants who often have no choice but to stay in their current living arrangements. .

“It creates an environment where landlords who don’t maintain their terms are still able to operate and do business,” Boos said. “That’s why abandoned and dilapidated properties can continue to attract desperate tenants. They have nowhere to go. »

Code enforcement officers in Columbus responded to about 39,000 complaints in 2021, which could include anything from broken furnaces to unmowed lawns that exceed the city’s 12-inch threshold, according to Cynthia Rickman, Deputy Director of the Department of Building and Zoning Services.

It’s unclear how many owners with previous code violations are bidding on foreclosed homes, but the Franklin County Sheriff’s Office said it sold 248 foreclosed properties in 2021. Preventing what Boos called “homeowners from The business’ of buying foreclosed homes could lead to greater local ownership, allowing residents to have greater participation in their community, Blessing said.

“You’ve read article after article about the odds of us hitting and entering a recession have gone up, and I suspect there will be more foreclosures online,” Blessing said. “I don’t want to see a repeat of the Great Recession where they went in and got them all back.”

SB 354 is yet to receive a committee assignment in the Ohio General Assembly, and SB 334 resides in the General Government Budget Committee. Lawmakers could consider the bills as soon as they return to session in November.

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