Jupiter, FL, USA (Sept. 9, 2022) — Real estate data firm CoreLogic reported that 2022 rents in the United States rose by a record 14 percent compared to last year. Rent in Phoenix surged 17 percent, and in Miami renters were hit by an increase of nearly 40 percent. But some investors and nonprofits are helping create affordable rental and home ownership opportunities across the nation.
Oftentimes, it is members of local communities who come up with these creative solutions. When landlords fail to pay their taxes, private investors may find a way to fix up the homes and then resell them to the tenants at reasonable prices and with manageable terms, so they can enjoy home ownership for the first time. Or if it’s an apartment building that has fallen into disrepair, they’ll rehab it and offer it as affordable housing. That also helps to eradicate neighborhood blight, which can be a magnet for crime and other unhealthy conditions, while undermining nearby property values. These investors can purchase tax liens and deeds at government auctions, where delinquent property liens and deeds are sold. Over $4.3 billion in tax deeds are sold annually, according to Tax Sale Resources, an organization that tracks tax sales data. The revenue generated helps cities and counties recoup their losses from unpaid property tax revenues – which are vital for funding public services such as education, fire departments, EMS, and parks and recreation facilities.
In that way, these private sector housing solutions support the overall community. Brad Westover, Executive Director for the National Tax Lien Association (NTLA) ─ the only nationwide nonprofit organization representing tax sale investors ─ agrees. “I am grateful that those in the private sector see opportunities to turn something around,” he says, “and it is the segment of our association that is growing faster than any other. Tax investors are often portrayed as being opportunistic, and foreclosing on vulnerable families. But of the two to four percent of properties that result in tax lien sales, only about a half of one percent result in foreclosure – and the owners are often landlords. Little attention is given to the fact that tax investment may be a nonprofit venture, led by those who want to provide multiple benefits to families and communities.”
Homeowners do not typically lose their homes due to unpaid taxes, because the property taxes represent a small fraction of the home’s value. Most foreclosures are, in fact, the result of delinquent mortgage payments owed to banks and other lenders. There are situations, however, particularly with older homeowners living on a small fixed income, where even paying their property taxes can be difficult. So, in the wake of Hurricane Katrina, Westover himself launched the 501-C3 nonprofit NTLA Foundation, to ensure that elderly homeowners wouldn’t lose their homes due to delinquent taxes. All of the nonprofit’s administrative expenses are covered by the NTLA. “One woman could only afford to fix up half her home after Katrina,” he recalls, “so we paid her back taxes and paid to renovate the rest of her house. The NTLA and the NTLA Foundation don’t make any money off of these charitable projects, emphasizes Westover. “We just do it because it is the right thing to do.”