NEWARK, NJ — Newark isn’t the only city in New Jersey to see a major shift in ownership of occupied homes, according to a recent study.
Last week, the New Jersey Department of Community Affairs (DCA) released a report titled “New Jersey Purchases: Increasing Institutional Ownership of Residential Properties.” Read it here.
Businesses and other “institutional” buyers are buying more and more homes and apartments across the state, according to the report. Over the past decade, nearly every town and city in New Jersey (about 96.4%) has increased the percentage of homes owned by real estate agents, businesses, trusts, and banks.
And at a time when the average homebuyer is competing with big companies, they are already gaining momentum, said Lt. Sheila Oliver, who is also the DCA Commissioner.
“This report shows the challenges homebuyers, especially low-income people, have in buying homes in their communities when they are competing with companies and entities for housing,” said Oliver. .
“Institutional home ownership is just one of several factors contributing to a very challenging housing market for regular homebuyers, but it is an important one,” Oliver added.
As of 2020, approximately 6% of the state’s residential properties are owned by businesses and institutions, up 2.5% from 2012.
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Those who rent homes may be most vulnerable to this ongoing trend, the report claims.
“While the overwhelming majority of local governments are experiencing an increase in institutional home ownership, the report found that the most targeted neighborhoods for institutional buyers are lower income and more deprived. and tend to have a resident population that is mostly renters, which the report notes may reflect a tendency to “acquire property for speculation, investment purposes, or for rent.” ‘ said.
The DCA study was inspired by another report on Newark’s rural housing stock from the Rutgers Center for Law, Inequality, and Metropolitan Equity (CLiME) released earlier this year. The report highlighted a startling statistic. Nearly half of Newark’s residential real estate is owned by businesses.
troublesome? Surely, CLiME researchers said. against the law? That’s another story, they added. The investigation found no illegal activity in Newark’s analysis. But that doesn’t mean it’s not harmful, researchers stress. If nearly every other home in a city is owned by corporations whose profits are revenue rather than community building, there will be “rapid rise in rents,” “falling homeownership rates,” and “housing inequality.” may lead to stabilization. income residents.
“CLiME’s findings raise the question of whether this is a Newark-specific trend or a statewide trend,” DCA said.
What are their conclusions? It depends on where you live.
At the county level, Hudson, Union, and Ocean counties have by far the highest average share of these properties. The share is relatively small in communities within Burlington, Bergen and Morris counties, according to DCA.
According to DCA:
“When looking at incidence rates by municipality, Ocean County’s small coastal community, Mantroking, takes the top spot with a quarter of agency-owned homes. Trenton ranks second with 23.4%. , taking the top spot for municipalities with over 500 residents, followed by Deal (another coastal community), Atlantic City, and Woodlyn, with most of the agency-owned properties in Trenton and Woodlyn in particular. , has transitioned to institutional ownership within the last eight years, as has Newark, which mirrors the findings of the CLiME study, and within Trenton, Chambersburg, Chestnut Park and Coalport/North Clinton. We see the highest share: Atlantic City has very high shares in the Uptown, Downtown, North Inlet and Bungalow Park districts, not in the top 10, but as pointed out in the Rutgers CLiME report As it stands, Newark has the 16th-highest share of agency-owned housing in the state, heavily concentrated in the West and South boroughs.”
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