Mayor Baraka: Who owns Newark? We want to make sure it’s the people. | Opinion

Published: May. 08, 2022

By Ras J. Baraka

A Rutgers' CLiME report shows that in almost half of all residential real estate transactions in Newark between 2017 and early 2020, the buyers were not individuals looking to buy new homes but faceless corporations and LLCs backed by private equity firms. Mayor Ras Baraka says the city will take steps to level the playing field for wanna-be individual homebuyers.

We learned last week that Newark is leading the country in a category we desperately want to avoid.

The Rutgers Center on Law, Inequality and Metropolitan Equity (CLiME) quantified a disturbing trend that threatens to undo all we have done to make homeownership more affordable for Newark residents and find permanent housing for our homeless residents.

The CLiME report, called “Who Owns Newark?” shows that in almost half of all residential real estate transactions in Newark between 2017 and early 2020, the buyers were not individuals looking to buy new homes or invest in our neighborhoods, but faceless corporations and LLCs backed by private equity firms with economic power to outbid would-be homeowners. The subtitle of the report spells out the problem: “Transferring Wealth from Newark Homeowners to Corporate Buyers.”

The study says five residential neighborhoods — Weequahic, Upper Clinton Hill, West Side Park, Fairmount and Vailsburg — were heavily targeted, with more than 420 homes in each section being sold to corporate entities. In all 3,900 in the West and South Wards alone were sold to these real estate companies and just four companies accounted for nearly 1,000 of those sales.

This is part of an alarming national trend of absentee corporate landlords buying huge swaths of single- and multi-family homes across the country, in mostly Black and brown communities.

These neighborhoods are the most vulnerable, where the foreclosure crisis 10 years ago drained cities of homeowners as their properties went on the auction block.

In this regard, it is predatory. I am committed to working with CLiME, report author David Troutt, and the Equitable Growth Advisory Commission to combat this movement that threatens to keep Newark residents from achieving the goal of homeownership or finding affordable rents.

While this is a national problem, the CLiME report said it was “most acute” in Newark and warns that the fallout from such arms-length ownership will contribute to “rapidly rising rents, decreased homeownership, higher barriers to affordable housing goals, renter displacement and less stable communities.”

I agree wholeheartedly with that assessment and if this trend continues, it will derail our efforts to make Newark an equitable and fair city for homeownership, and a place where our property owners have a stake in the city’s growth, welfare, and safety.

We have had several programs to achieve these goals and chip away at the wealth gap between white median households and Black and brown households. According to the New Jersey Institute for Social Justice’s new statistics, the median wealth for white households is $322,500 while Black ($17,700) and brown ($26,100) households lag hundreds of thousands of dollars behind.

Our Neighborhood Development Program in the West Ward allowed nine developers led by women or people of color to build affordable housing on 40 city-owned parcels. We increased the affordable housing funding to $20 million for families making $34,000 or less. We doubled the Live Newark Program to financially assist first-time homeowners and made Land Bank properties available for Section 8 housing.

We created the New Jersey Forty Acres and a Mule Fund that will invest $100 million in real estate and small business development for minority partners.

When we began the Lead Line Replacement Program, we acknowledged that 74% of Newark residents rent. That was a key factor in us deciding to replace the lines for free, and pass legislation to gain access to a property without the owner’s consent.

We knew tracking down landlords, especially those who formed LLCs or real estate companies, would be time-consuming, costly and inefficient. Who knows how long it would have taken us to finish the project, if ever? Because, frankly, many of these landlords are hidden by layers of holding companies.

“Who Owns Newark?” tells us this trend will only exacerbate such problems.

So, we are moving fast to level the playing field for individual would-be homeowners, through legislative proposals at the state level and through our city council. We will ask for greater transparency in corporate ownership and impose fees on landlords not under rent control that will go into our Affordable Housing Trust Fund to create new affordable properties to buy and rent in Newark.

While we recognize rising home values are evidence of Newark’s increasing desirability as a place to live, we more strongly value homeownership as the key to the improvement and safety of neighborhoods, while allowing families to build wealth through the American dream. It is part of my administration’s equitable city values.

Predatory corporate ownership of large parts of our neighborhoods undermines those values, and we must do our best to give our residents a chance to compete for our housing stock.

Do you like this post?

Showing 1 reaction

published this page in News and Politics 2022-05-09 02:42:23 -0700