CAP en Español
Small CAP Banner

Idea of the Day: What Are the Policy Implications of an Investor-Led Housing Recovery?

    PRINT:
  • print icon
  • SHARE:
  • Facebook icon
  • Twitter icon
  • Share on Google+
  • Email icon
idea light bulb

Across the country, investors are taking advantage of the nation’s foreclosure crisis to purchase homes at bargain prices, often beating out potential homeowners who remain sidelined. In July, cash-on-hand investors bought about 55 percent of the homes sold in Las Vegas and numerous properties in other major metropolitan areas such as Miami, Phoenix, and Prince George’s County, Maryland, a suburb of Washington, D.C.

Investors can play a key role in a housing recovery. By absorbing excess inventory, they establish a floor for home prices and jumpstart appreciation. Responsible investors can also offer quality, affordable rental opportunities to families who may be locked out of homeownership due to foreclosure or lost wealth from the recession.

But while they can support communities, irresponsible investors can also destroy them by allowing properties to sit empty, declining to bring rental properties up to code, and neglecting tenants’ needs in instances where the home is occupied. Additionally, investors that buy large quantities of properties in a single area can cause prices to overheat and increase market volatility. Conversely, if institutional investors following a set business plan sell numerous properties in the same time frame, prices in those neighborhoods could decline again.

For more on this topic, please see:

To speak with our experts on this topic, please contact:

Print: Liz Bartolomeo (poverty, health care)
202.481.8151 or lbartolomeo@americanprogress.org

Print: Tom Caiazza (foreign policy, energy and environment, LGBT issues, gun-violence prevention)
202.481.7141 or tcaiazza@americanprogress.org

Print: Allison Preiss (economy, education)
202.478.6331 or apreiss@americanprogress.org

Print: Tanya Arditi (immigration, Progress 2050, race issues, demographics, criminal justice, Legal Progress)
202.741.6258 or tarditi@americanprogress.org

Print: Chelsea Kiene (women's issues, Talk Poverty, faith)
202.478.5328 or ckiene@americanprogress.org

Print: Elise Shulman (oceans)
202.796.9705 or eshulman@americanprogress.org

Spanish-language and ethnic media: Jennifer Molina
202.796.9706 or jmolina@americanprogress.org

TV: Rachel Rosen
202.483.2675 or rrosen@americanprogress.org

Radio: Chelsea Kiene
202.478.5328 or ckiene@americanprogress.org

 

This is part of a regular column: Idea of the Day

For more from the same column, click here