New Report: Who Owns Your Neighborhood?
Investors acquire 42% of all foreclosures in Oakland
Director of Research & Technology
(Oakland, CA) – June 28, 2012 – A new report released today by Urban Strategies Council lays bare the rapidly changing face of homeownership in post- foreclosure Oakland. Of the 10,508 completed foreclosures in the city since 2007, 62 percent (6,523) were either still owned by a financial institution or had been acquired by an investor. As of October 2011, investors had acquired 42 percent of all properties that went through foreclosure in Oakland. The report: Who Owns Your Neighborhood—The Role of Investors in Post-Foreclosure Oakland, provides many new details on what has transpired in Oakland in the wake of the foreclosure crisis; the report is available at www.infoalamedacounty.org.
Findings in the new report show that only 10 out of the top 30 foreclosure investors in Oakland are actually based in the city. Moreover, 93 percent of all investor acquisitions are concentrated in the low-income flatland neighborhoods of Oakland—the same neighborhoods targeted by predatory lenders that, in part, fueled the crisis. The new report argues that the disproportionate concentration of this activity among Oakland’s most disenfranchised neighborhoods warrants the immediate attention of policy makers, local government officials, and residents.
The Greenlining Institute’s Community Reinvestment Director, Preeti Vissa, said of this report: “Communities of color were hit hardest by the foreclosure crisis, and now we see another cycle of disempowerment in those same neighborhoods. It's alarming to see entire neighborhoods transferring wealth from hundreds of people to the hands of two companies. And it's hugely damaging to communities if homes bought by investors aren't held to any standards for rehabilitation and upkeep, as well as affordability in both ownership and rental.”
The two largest Oakland foreclosure investors profiled in the report, Community Fund LLC and REO Homes LLC, have acquired nearly 500 properties in the city since 2007. The results of a property condition survey detailed in the report indicate that some investors complete very few upgrades to their acquisitions prior to putting them back on the market to rent or sell. As of October 2011, the top two Oakland investors had flipped 130 properties for an average gross gain of nearly $80,000 per property.
Beverly Williams of the Alliance of Californians for Community Empowerment said in reaction to this report: “Families are the heart of a healthy, stable neighborhood. Oakland’s neighborhoods like mine have been decimated over the past few years because of the housing crisis and we’ve watched so many of those families leave. We want to re-build our neighborhoods, but we want to make sure there is room for those Oakland families that have a real, long term investment in our communities”
The report also reveals that while individuals and families are rarely able to bid on properties at trustee sale auctions (due to the fact that cash is required to purchase at auction), they have demonstrated a significant demand for affordable homeownership opportunities through purchases of foreclosures directly from banks; 55 percent of the REOs sold by banks were purchased by individuals and families. These individuals and families were six times more likely than investors to retain ownership of their foreclosure acquisition, pointing to the stabilizing effect of owner-occupancy in struggling neighborhoods.
West Oakland resident Dorcia White agrees with the concerns raised in our report: “We live here, we have our business here, we want to buy a home here, we want that slice of the American dream but, more and more that slice seems to be out of reach for every day, working families like ours.”
A PDF version of this press release is available here.
Full Report available here.
Executive Summary available here.