Almost every day, Paula Kittrell gets a call, a text message, or an email with the same message: If she’s considering selling her West Lakes home near downtown Orlando, someone is willing to pay cash today.
Occasionally she listens to the pitch. But she declines every single offer, even one to three times what she paid.
“I got three calls over the weekend,” Kittrell said. “I get called up almost every day.… Residents of our community get regular calls from people who do not even live here.”
As unprecedented demand caused house prices to rise in the Orlando subway, real estate investors bought nearly half of the properties sold last year in the predominantly black zip code 32805, where Kittrell lives.
32805, which extends west from the edge of downtown, is roughly bounded by Interstate 4, Mercy Drive, Colonial Drive and 33rd Street and includes the historic neighborhoods of Parramore and West Lakes as well as Exploria Stadium and Camping World Stadium.
For decades, this part of the city was largely ignored by large business investors. But as the center’s growth stretched into the area, those knocking on a lucrative payout began to emerge. Now activists are worried that the influx of investors and their ever-increasing cash supply will bring homeowner rates down and make the neighborhoods unaffordable for longtime residents.
“The problem with many for-profit investors is just that. They are only interested in profits,” says Camille Reynolds Lewis, CEO of the Winter Park-based Hannibal Square Community Land Trust, which is building affordable housing in 32805. “They’re not really interested in listening to families living in the neighborhoods.”
Of the 266 homes in 32,805 sold last year, 43% went to investors, according to data from real estate company Redfin. In contrast, investor companies in the zip code accounted for about 25% of sales in 2020 and 29% in 2019, according to Orange Property Appraiser records.
Winter Park-based investor Lonnie Thompson, who bought nothing in 32805 last year, nonetheless understands what happened. He said the affordability and availability of housing in the zip code attracted attention. “If anything was available … then they just look at the numbers,” he said.
Housing prices in 32805 are cheap for the region. While the median price in metro Orlando hit a record $ 361,000 in March, the average house price sold in ZIP is $ 234,000, according to realtor.com.
But society is also experiencing rapid appreciation. Kittrell bought his home for $ 75,000 in 2012. A decade later, its estimate on zillow.com is $ 295,800.
Investors buying in historic black neighborhoods are nothing new, according to Anne Ray, a researcher and head of the Shimberg Center for Housing Studies at the University of Florida. “We’ve always had properties that aren’t owner-occupied, so we’ve always had investors with us,” she said.
What Ray says has changed recently is the emergence of institutional investors, major banks and hedge funds who have started buying single-family homes galore, mostly to convert to leases. “It reduces the supply of cheaper and medium-sized homes that are available to home buyers,” she said.
Thompson said most investors noticed the presence of these companies over the past year. “There are so many different companies coming into the game,” he said.
In 32805, 9% of sales went to units affiliated with the parent companies of Invitation Homes, Main Street Renewal and others in the single family rental market.
Main Street Renewal lists four properties for rent in the zip code, all purchased within the last year, all between $ 2,095 and $ 2,595 per month. The average rental price across Orlando for single-family homes is $ 2,400, according to rental site Dwellsy.
The Texas-based Amherst Group, which owns Main Street Renewal, did not return a request for comment. The Orlando Sentinel reached out to several investor firms that bought property in 32805 last year, but none of them returned requests for comment.
The wave of purchases has raised concerns that longtime residents across income groups may soon be priced out of the community, which has long been a bastion of home ownership for middle-income residents in Black Orlando.
When homes are converted to leases, it reduces inventory, pushing both sales and rental prices higher, Ray said.
“If people who would have bought a home live in more moderately priced rental units, it is not available to new households,” she said.
This means tenants may be forced to look outside the area for cheaper options, and potential home buyers cannot afford to compete with high cash payments offered by investors. They will also have to look elsewhere.
“Unless you create home ownership opportunities for existing residents who want to stay in the neighborhood, gentrification will occur,” said Tim Ayers, CEO of West Lakes Partnership, an organization working to increase home ownership in the five predominantly black neighborhoods that make up the West Lakes.
Across the zip code, about 48% of homes lack a household exemption, usually seen in owner-occupied homes, indicating that they are either leases, second homes or other investment properties, according to data from the Shimberg Center.
Homeowner rates in the area have been declining since the Great Recession in 2008. In 2000, homeowners accounted for 30.6% of homes in Kittrell’s West Lakes neighborhood, according to data from nonprofit Lift Orlando. In 2019, it was down to 23.5%.
Shan Rose, a Parramore activist who runs the nonprofit organization Change for the Community, bought her three-bedroom house in 2018 for $ 205,000 as part of a city-sponsored revitalization program. Since her purchase, she has seen several homeowners move into newly built homes on her street. She said she welcomes investment when companies are in charge.
“It is often the outsiders who come in and see something [that] needs improvement and they say ‘I want to go in and check it out because this can get better’, she said.
She has helped get more bins in the city to reduce waste near the stadiums, add speed bumps to make Parramore Avenue safer and remove a fallen tree that blocked the sidewalk and forced children to walk the streets to get to and from school .
She said investors can have a similar positive impact on a neighborhood if they take into account the needs of residents as much as their profits.
“The house on the corner of my street, there’s an investor who owns it,” Rose said, noting that this person owns a lot of properties in the community. ‘But it is an affordable rent. It’s about having the conversations where we make it known that we welcome investors, but we want you to make it affordable. “
Rose organizes residents to withstand the wave of investors.
“It’s about unity. I tell the whole neighborhood, if they ask you (to sell), say it’s $ 500,000, ”Rose said. Investors do not pay. They will find another neighborhood to go to. ”
And if prices continue to rise and $ 500,000 a day becomes a reasonable price for a house in Parramore, Rose said, then, homeowners should demand even more from investors.
Rose emphasizes to other residents the importance of maintaining the home and taking care of their neighborhoods themselves.
And she reminds people of the projects that took home from western Orlando without regard to the community, which when more than 100 homes were destroyed to make way for the original Orlando Arena where Creative Village is located today.
“I have to remind people to … Go back to your roots,” she said. “Remember what they did. Do not allow history to repeat itself.”
For Ray at the Shimberg Center, Orlando’s lack of housing stock drives investors to bid everywhere. She says the biggest help would be building more houses.
“If there is enough housing supply, there is not that much pressure on existing housing,” she said.
Lewis at the Hannibal Square Community Land Trust wants to increase home ownership in ZIP.
“If you have a lot of owner-occupied homes, you’re less likely to get investors … to swallow houses and turn them into leases,” she said.
Confidence builds The Townhomes at West Lakes, a community of 30 affordable townhouses that will be sold to qualified residents. The prices for the homes have not yet been determined, but the purchase will be partially supported based on applicant income, where half goes to families, which make up 65-80% of the area’s median income.
“Young people can buy in the neighborhood, they can become part of the process of revitalizing the neighborhood,” she said. “You can revitalize without gentrifying. You have to invest in the community and not just in your own profit. ”