Federal Reserve Bank of San Francisco

Community Development

Community Investments Vol 23, Issue 1
When Investors Buy Up the Neighborhood: Preventing Investor Ownership from Causing Neighborhood Decline

Author(s): Sarah Treuhaft, Kalima Rose and Karen Black, PolicyLink

Spring 2011

Community Investments Across the country, communities are struggling with the negative spillover effects of foreclosure. In states such as Arizona, California, and Nevada, an additional concern is the increased number of investors who are purchasing distressed properties. While investors are an important part of a vibrant housing market and can provide high-quality and affordable rental properties, there is a danger that unscrupulous investors are buying these properties without the intent to maintain them or contribute to the health of the surrounding neighborhood. This article, an excerpt from a longer report published by PolicyLink, reviews strategies that local governments can use to prevent investor ownership from causing neighborhood decline.

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