There goes the neighborhood.
As investors rent out their newly acquired properties, tenants who lack roots in the community enter the neighborhood. In many areas across California, these transient occupants have become a source of irritation for the surrounding neighbors.
Long-term owners grumble these tenants lack a vested interest in the community, making them inherently bad neighbors. Too often these rental properties are not as well-maintained as adjacent owner-occupied properties. Likewise, many cities show rentals receive more police, fire and code enforcement calls than their owner-occupied counterparts. Neighbors argue tenants result in declining property values.
Rather than the tenants, it may be the investors who own these properties that are the source of the neighborhood’s economic condition.
Investor acquisitions have been most frenzied in areas decimated by the housing bust, such as in Riverside and San Bernardino. For example, 15% of single family residences in Riverside were owned by someone living elsewhere in 2007. By 2013, the number of absentee ownership has risen to 25%. More telling, investors made up 40% of MLS home purchases in April and roughly 50% of trustee’s sale acquisitions.
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The days of speculator dominance in acquisitions are numbered. Part of that is by their design. The properties were bought to be flipped when a profit could be had. Eventually, speculator momentum will stop (and has shown signs of already slowing).
The real culprit of the problem has become clear: the lack of end-user demand. Without user demand, the speculator crutch will soon fail with nothing left to support prices.
Given the increasing demand for rental housing and the need of speculators to avoid losses, they will likely be around as property managers for a long time.
Nevertheless, homeowners have a right to the quiet use and enjoyment of their property — as do tenants. While tenants as a class are often socially stigmatized as being poor neighbors, this isn’t typically the case.
Neighboring owner occupants can be just as disruptive. However, transient occupants, such as students renting near a college campus, may be less concerned about improving their surrounding community or maintaining tranquil relationships with their neighbors.
Aside from old fashioned face-to-face confrontation, code enforcement is an owner’s best option, and a fair one at that. If neighbors are violating city codes with trash or inoperative vehicles ̶ and excessively loud and late night parties ̶ the local code enforcement authority or police department are readily available to resolve the nuisance situations.
Re: Shift towards rental homes fuels neighbors’ friction from the Press Enterprise