CNBNews

First published September 21, 2022

William E. Cleary Sr. | CNBNewsnet

GLOUCESTER CITY, NJ (CNBNewsnet)(September 21, 2022)--Twelve years ago, we looked at the housing market in the City of Gloucester City. Former Mayor William James and the council were worried as blight was absorbing sections of the city.  They were concerned too about the number of homes converted into apartments.

The numbers today reveal that rental properties have increased from 1946 to 2,987 in 2022, or 1,041 more, according to records acquired in an OPRA request by CNBNews.  When you compare the number of rentals to the number of residences (4,663) obtained from the latest census, rental properties outnumber homeowners by 64 percent.

DO RENTAL PROPERTIES DEVALUE SINGLE-FAMILY HOMES?

There have been many studies on this topic. Some confirm that rentals depreciate a neighborhood, and others suggest the opposite.

Keith Ihlanfeld from Florida State University wrote a paper in 2019, “Not In My Neighborhood: The Effects of Residential Rentals on Single-Family Home Values.”

Single-family homeowners have long expressed a distaste for residential rentals in their neighborhoods, believing that rentals will adversely affect neighborhood quality and lower house values. Prior studies of this issue are thin and have not been able to establish causality from correlation. In this paper, I utilize a twelve-year panel of neighborhoods from the Miami, Florida, metropolitan area to study the impacts that four different types of rentals have on the values of single-family homes. Causality is more firmly established in comparison to previous research by estimating house value models that include time and neighborhood fixed effects and that treat the rentals as endogenous variables. My results show that, regardless of the type of rental, adding an additional rental unit to the neighborhood or increasing its neighborhood share at the expense of single-family owner-occupied homes lowers home values, especially if the rental unit is of lower quality.  READ more

On the other hand, The Urban Institute recently released an affordable housing case study from Alexandria, Virginia. The results indicate that affordable housing has a positive, if not zero, effect on property values.

• “Affordable housing units in above-median-income census tracts are associated with a 0.06 percent increase in property values, and affordable housing units in below-median-income tracts are associated with a 0.17 percent increase in nearby property values.”
• “Affordable housing units in Alexandria are associated with an increase in property values of 0.09 percent within 1/16 of a mile [one city block] of a development, on average” and “no effect on properties between 1/16 of a mile and 3/16 of a mile.”

Source: How Affordable Housing Makes Communities Wealthier

GLOUCESTER CITY RESIDENTS TELL A DIFFERENT STORY

A resident from the Riverview Heights section of Gloucester City has had numerous run-ins with an out-of-town landlord about the condition of his rental property.  According to the resident, that rental property located on North Harley Avenue has been abandoned. Recently, he had to call the police because there were people inside the bungalow ripping out the copper pipes and electric wires.

“They pushed the enclosed window air conditioner on the second floor and let it fall to the ground. All that is left is a large hole where the AC was. I called the police, but the individuals got away. I asked the officer to let me know if the thieves were arrested, but I haven't heard from them.”

The out-of-town landlord has abandoned the Riverview Heights home that thieves broke into. Left behind for nearby residents to view is a backyard full of junk. Ask any of them if they believe affordable housing/apartment rentals are suitable for a community, and you will receive a resounding NO!

Presently, Gloucester City has more rentals than homeowners.

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In June, a resident in the 200-unit block of Cumberland Street contacted CNBNews because trash from a nearby apartment building had been lying in an alleyway for over a month (see above photos). The debris was attracting rats and mice. Neighborhood residents called the police about that problem. They also called them about abandoned cars parked in the exact location. But city officials never answered their plea. As a result of our articles, both issues were rectified. The landlord for that apartment building lives in New York City. 

For similar stories/photos, click HERE

Out-of-town and local speculators have purchased home after home on the west side of Broadway. In 2010, there were 812 rental properties on that side of Gloucester City. Twelve years later, there are 1,179 rentals. Many of these individuals are using LLC corporations to hide behind, according to Shelterforce, an independent, non-academic publication covering the worlds of community development, affordable housing, and neighborhood stabilization.

The large institutional investors are heavily concentrated in moderately priced, middle-class suburbs with good schools. The private REITs and smaller investors focus on homes in the lower-priced markets, which would make sense for organizations that operate under fewer constraints than large public companies and have less reputational risk. In these markets, the continued shortage of affordable rentals enables them to charge rents almost as high as those in stronger markets, but for properties that are considerably more distressed in areas where acquisition prices are lower and there is less pressure to invest in fixing up the property.

Landlords of all sizes often invest through a limited liability corporation, which is often used to shield the identity of a particular investor. A recent example of a wealthy, private individual using LLCs to purchase real estate is Sean Hannity of Fox News. 

https://shelterforce.org/about/

CNBNews OPRA request also discovered that the City of Gloucester City owns 172 properties. Why the city is involved in the real estate market is a mystery. Their record of failures includes the development of the Southport industrial properties, the Freedom Pier restaurant, and most notably, the $7.1 million of taxpayers' money spent on the Chatham Square debacle. To see the complete list of those rentals, click HERE

HOW MUCH DOES THE CITY COLLECT FOR RENTAL INSPECTIONS?

According to our 2010 article, the city collected a total of $230,746 in fees as of August 13, 2010. Twelve years later, the numbers haven't changed that much. The inspection fee in 2010 was $175.

2019 Rental registration fees totaled ......................$323,045

2021 Rental registration fees totaled ......................$318,465

2022 Rental registration fees through July..............  $100,560

The Gloucester City Police and Housing Departments have taken an aggressive stance against individuals who are violating the city's housing codes. Operating as the designated Housing Police Officer for the City, Patrolman William Johnson has issued a remarkable 46 housing citations in just one week between the dates of July 16 and July 24. CNBNews has been documenting images similar to the one below for several months now. The lack of Community Pride in our City is one of the primary reasons for such violations.

The police have recently taken serious action against landlords, tenants, and homeowners who have been neglecting their properties and do not care about our city's well-being. It's obvious that some individuals have no regard for the city's health, safety, and beauty. We must take necessary action to ensure that our city remains safe, healthy and beautiful.  (CNBNews photo from January 2021 Me and Peyton Meandering)