Have rental prices in the Inland Empire soared too high? The answer is yes, if you ask Congressman Mark Takano (D-Calif.), and he took notice because he represents the 41st district.
There’s no question that an avalanche of foreclosures caused enormous damage to the local, state and national economy. What followed, according to Takano, is a rush by investment companies to pay cash for distressed houses, package them into rental portfolios, and create an investment product.
Investors profit because of positive-cash flow from rental payments generated by large numbers of company-owned rentals. In the wake of investment cash “leaving the family purchaser of modest means shut out of the housing market,” Takano wrote in a letter to the Committee on Financial Services and its ranking member Maxine Waters.
Related news: Watch where homeowners lost the most money.
Congressman Takano is concerned that a new financial product has been created that inflates rental prices in the Inland Empire. He has another concern. If large numbers of renters default on their leases it could lead to a collapse within the investment companies that rely on rental profits to enrich their investors.
Takano is asking for the committee to take a closer look at this investment vehicle with the purpose of making sure it doesn’t result in a secondary crisis.
Without proposing a direct solution his letter also raises concerns about rental prices in Riverside County. Within the city his office reports that 12,365 renters are paying over half of their income in rent; a trend that started in 2007.
Programming note: Congressman Mark Takano will join us
LIVE on InstantRiverside.com Radio at 1:30 p.m. PT today.
Friday, January 24, 2014
Not working? Click here!