From realtors.org
Many of the single-family homes in the Piedmont Park neighborhood of Apopka, used to be owned by families — the Vargases and the Townes, the Pierces and the Riddles.
Now, they’re owned by Blackstone, American Homes 4 Rent and Colony Starwood Homes — companies associated with big real estate investment firms.
And the occupants are tenants, not owners.
In the decade since the housing boom deflated into a bust, financial firms recognized an investment opportunity in hard-hit areas like this Orlando suburb.
Single-family homes lost to foreclosure could be bought cheaply and transformed into rent-generating income streams.
The corporate purchases have spread through Piedmont Park and surrounding neighborhoods, where the percentage of renters rose from a bit over 10 percent to more than 35 percent within a decade.
Piedmont Park homeowners complain the result is more transient neighbors, less engagement at homeowners’ meetings and difficulties reaching absentee corporate landlords.
Apopka Mayor Joe Kilsheimer regards the surge of renters in houses throughout Central Florida as an unfortunate consequence of the damage this region absorbed from the Great Recession and housing bust.
“Having an owner-occupied house is better for a neighborhood and better for a community than a house occupied by renters,” Kilsheimer said. “They are invested in their children’s school. They’re invested the quality of life in their community.”
In the aftermath of a housing crisis, metro Orlando suffered one of the highest foreclosure rates in the nation.
A few homes in Piedmont Park sat empty for months, attracting squatters who moved in and were hard to evict, said Karin Settle, president of the local homeowners association.
One house of college-age renters, she said, threw fraternity-like parties with 20 or so cars parked outside and drunk men hanging out on the porch — something the neighborhood didn’t see in years past.
Several homeowners have said they’re considering selling their homes because there are so many renters, she said.
Laura Smith, a resident for 17 years, was a close friend with her neighbors in the house behind hers until they moved a couple of years ago. Since then, she said, it’s been one renter after another.
“They just come and go; you just see different cars,” Smith said. “I say to myself, ‘I should make a better effort to get to know them.’ But by the time I get around to it, they’re gone.”
The three-bedroom, two-bath home next door to Michelle Harner’s house was sold in March. She was hoping owner-occupants would move in. But the telltale signs of a corporate landlord appeared within days.
“Somebody doesn’t buy a house like that and turn around and rip everything out and completely remodel the whole thing and put a new roof on it five days after buying the house,” she said.
Property records show Freo Florida LLC bought the house at the end of March for $145,000. Freo Florida, part of Progress Residential Trust, which owns over 3,000 homes around the nation, listed the house on Zillow as a rental for $1,325 a month.
Some renters do show pride in tending to their homes, Harner said, but it’s often easy to pick out which homes are rentals. Yards tend to be untended, cars are parked all over the street, “and you see one family a year come and go.”
The transient nature brings other challenges. At a recent homeowners’ association meeting to discuss installing a new playground, only nine homeowners showed up from a neighborhood with more than 400 residents. A decade ago, dozens would likely have attended.
“When you have a high percentage of renters, you end up having a low turnout at things like homeowners’ association meetings, when you do a community yard sale,” Harner said. “That collaboration sort of declines.”
Ask the renters themselves, and some will say that very sense of community is what they value most about living there. Nicole Caverly, who began renting in the Piedmont Park neighborhood this year, doesn’t consider herself a disengaged neighbor.
After having lived for years in an apartment building where people kept to themselves, she loves living where she can chat with neighbors during walks.
The previous owners had lost the house to foreclosure in 2015, after which Freo bought it. Caverly, a store manager, says the management company her landlord uses has been pleasantly responsive. It quickly fixed troubled locks on the front door after she moved in with her daughter and boyfriend.
She is saving for a down payment to buy a home. But she doesn’t yearn for the responsibilities of ownership — from having to fix appliances to dealing with insect infestations.
For now, Caverly observed, “It’s a renters’ market because nobody can afford a down payment.”
There are few signs the real estate investment companies plan to sell many of the homes they bought. But the temptation to do so will keep rising if home prices do.
In the meantime, the companies have scaled back their purchases — from 9 percent of all sales nationwide in 2013 to about 2.5 percent early this year, said Daren Blomquist, a vice president at RealtyTrac, which tracks housing data and trends.
The industry has been consolidating as companies try to create efficiencies of scale. Colony American Homes and Starwood Waypoint Residential merged this year. And American Residential Properties merged with American Homes 4 Rent late last year.
“It seems like the players who are still around are pretty committed to a long-term strategy of holding these homes,” he said.