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Tax Sale Investors in Jacksonville, FL Offer a Blueprint for Solving the Affordable Housing Crisis

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Tax Sale Resources
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Jacksonville, FL, USA (Sept. 5, 2022) — An ambitious project, started in 2017, identified a large number of single-family homes being auctioned off by Duval County, FL, due to delinquent taxes. Within two years, private investors acquired and rehabbed 109 of these homes, helping more than 200 families secure safe, affordable housing that subsequently generated $1.9 million in government revenue to support public schools in the county.

“These were primarily two and three-bedroom homes in very poor condition,” explains Stephen Seal, co-chair of the Tax Deed Investor Group (TDIG) which is a committee of the National Tax Lien Association (NTLA). “They were in lower income neighborhoods with heavy concentrations of occupants who receive some type of government subsidy. But we elected to buy them because we felt the community was underserved and had wonderful growth potential.” Other investors had ignored the properties, deeming them too management intensive, citing heavy tenant turnover and decreasing investor yields, and because of a high occurrence of crime in the neighborhoods. However, Seal and his partners believed that with proper management and tenant underwriting, low-income families who deserved the opportunity to live in a quality rental home could do so – and that it would uplift the community.

As Seal describes, “Back when many of the homes were built, the style was very small bedrooms and closets. Now the preference is for bedrooms and closets that are more spacious, and for living, dining, and kitchen spaces that span together in a more open style. Most of the homes we purchased and rehabbed did not have central air conditioning either, and adding that gave us the opportunity to remove the older equipment and increase living space by installing the air conditioning outside and the air handler in the attic.” Homes also benefitted from upgrades such as high-quality flooring and granite countertops. During the two-year project, Seal recalls, “neighbors often stopped by to tell us how excited they were about the ‘new’ house we were working on, telling us about years of neglect and eyesores that they had tolerated over the years.  Many times, those same neighbors brought us their friends as tenants, especially once they saw the inside of the home and realized the high level of quality and finishes inside.”

Once the project was completed, the tax revenues began to generate close to $2 million that went into the local government’s general fund and to support local schools. Government tax auctions raise more than $4.3 billion annually, according to Tax Sales Resources, an organization that tracks tax sales data. Since each state and jurisdiction has its own auction inventories, investors typically use databases like those to locate properties with the greatest upside potential. “Approximately 80 percent of the tenants now living in the upgraded homes are low-income residents,” adds Seal, “and the nicer homes provide them with quality housing in an environment where very little quality housing previously existed.” His hope is that other investors will replicate this kind of success within other communities throughout the United States, at a time when the housing crisis is especially harming low-income families.

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