Ohio lawmaker hopes bill can help first-time homebuyers in competitive real estate market
A state lawmaker says he has introduced that could help first-time homebuyers navigate the challenges posed by the current real estate market.
The bill Sen. Bill Blessing (R-Colerain Township) is sponsoring, SB334, would make it tougher for corporations to buy homes in bulk.
Blessing said corporations are buying homes in bundles then renting them out, often taking opportunities away from potential first-time homeowners.
"I believe that stable housing, the ability to purchase a home, build equity and create inter-generational wealth, as well as have a stable place to raise a family, is a net good," Blessing said.
Blessing said people who want to purchase a foreclosed home and fix it up to live in it often find they can't because corporations have contracted to buy those properties in bundles for rental income. So his bill has one key goal.
“It seeks to stop the bulk buying of homes through the foreclosure process,” Blessing said.
How it works
Foreclosures are most often auctioned at sheriff's sales with the highest bidder winning the property. Right now, companies can come in and buy multiple properties at one time.
This bill changes the process to put Ohioans seeking homes to live in at the front of the line. Under this bill, a corporation or institutional investor can still be the highest bidder. But if they are, there will be a 45 day waiting period. During that time, someone who is renting that property has the first opportunity to buy it. They would have to pay equal to the winning bid and sign an affidavit promising to live in the property for a year. If that doesn't happen, during that same 45-day window, the property could be purchased by another buyer who is willing to pay more than the winning bid and live in the property for at least a year.
At this second tier, nonprofit groups involved in providing affordable housing as well as cities themselves, could purchase the property. If after 45 days, neither the first or second tier buyers purchase it, the corporation would be able to go through with the deal and own it outright.
Blessing said the bill is based on a California law. He emphasized this only affects foreclosed homes that are going up for auction at a sheriff's sale — not foreclosed homes being sold in the real estate market. And he says he knows this bill won't help many potential first-time homeowners.
"I don't believe that this is a panacea. I just hope that it in some way helps somebody gain a home so they can put sweat equity into it and build their dream home," Blessing said.
Blessing also knows it is late in this General Assembly to introduce a bill like this since it would have to pass the Ohio House and Ohio Senate before the Legislature ends its current legislative session at the end of this year.