More Rental Properties in Suburban Neighborhoods
As a result of the foreclosure crisis, there are fewer family-owned single-family houses in suburbs across the country, including the suburbs of Chicago. According to Suzanne Lanyi Charles, a professor of city and regional planning at Cornell University who authored the report, more families are now renting instead of buying homes. Charles explained how “single-family rental housing is an increasingly prevalent form of housing tenure in U.S. suburban neighborhoods, representing a paradigm shift in how households gain access to a suburban single-family home.”
Why are there more rental properties than family-owned homes? Many large corporations, Charles clarified, purchased foreclosed single-family homes after the 2008 crisis “in an attempt to stabilize neighborhoods.” Those properties remain corporation-owned, and those corporations continue to rent properties to families in those areas. For some families, being able to rent—as opposed to buying—a single-family home in a suburban area has been helpful.
Charles suggests, the fact that many of these houses are now rentals makes them available to families that would not have been able to buy those same homes in those neighborhoods. At the same time, however, “the reverse is also true,” Charles argues. She discusses the paradox: “Single-family rental housing in some neighborhoods may afford renters access to the opportunity that some neighborhoods can provide, while . . . in others [it] may have negative effects on households and neighborhoods.” Accordingly, Charles argues that a one-size-fits-all solution to managing corporation-owned housing will not work for all families. Charles refers specifically to Democratic presidential candidate Elizabeth Warren’s plans to limit the ability of corporations to own a large portion of single-family rental homes.
Additional Changes in Housing Since the Foreclosure Crisis
In addition to shifts in the rental market—meaning that there are far more single-family homes for rent and fewer for sale—the foreclosure crisis has also led to other changes in single-family housing. An article in The Washington Post cites the following as other ways in which the foreclosure crisis has affected single-family homes:
- Types of home loans that existed before the foreclosure crisis largely do not exist anymore—instead, potential homebuyers typically choose between a fixed-rate loan or a loan that meets “Qualified Mortgage” standards”;
- Most loans require a down payment of at least 3.5%;
- Potential homebuyers are unlikely to qualify for a home loan with a credit score of under 620; and
- Potential homebuyers with a credit score of under 760 will likely pay more in interest.
If you have questions about foreclosure or need help saving your home, an Oak Park foreclosure defense attorney can speak with you about your options. Contact the Emerson Law Firm to learn more.
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How Are Foreclosure Activity and Consumer Confidence Related?
“Zombie” Vacancy Rates Decline in the Midwest