Ferguson Housing: Out-of-Town Landlords Thriving

Housing advocates say that this increasingly common arrangement—outside investors renting to low-income locals—may have contributed to the area’s racial tension.

By Albert Lin

Welcome to FergusonFerguson’s housing market may be a contributing factor in the racial tension that erupted following the shooting of Michael Brown.

The New York Times reports that in Ferguson and other nearby suburbs of St. Louis, out-of-town investment firms are increasingly buying up distressed real estate and renting it to low-income residents. Since Ferguson’s population is about two-thirds Black, it follows that many of those tenants are Black as well.

According to RealtyTrac, which monitors sales and foreclosures, the average house sales price in Ferguson was $45,032 last year, up 58 percent from 2011—but still only about half the price of the average home in 2006, when the market peaked.

The financial crisis has had a disproportionate impact on Ferguson, where 50 percent of the city’s houses are under water—i.e., the owner owes more on his or her mortgage than the property is worth. Nationally, the rate is only 17 percent.

Investment firms flush with cash have taken advantage of the opportunity, accounting for one quarter of home sales in the area, according to RealtyTrac.

On the one hand, that means fewer abandoned properties. But housing advocates wonder if out-of-town landlords will upgrade the homes—many of which are more than 50 years old—and what their long-term intentions are. Chris Krehmeyer, President and CEO of Beyond Housing, told the Times that he is concerned that these firms will just let the properties continue to age and deteriorate. Ultimately, if firms become dissatisfied with the return on their investment, they could choose to just abandon the properties.

Edward Renwick, CEO of Raineth Housing, says that his Los Angeles–based firm and its investors plan to be around for a long time. “We’ve designed this so everyone will be happy if we own these homes forever,” he said.

Raineth is one of the bigger players in the area, having bought 72 houses in Ferguson since 2011, about 5 percent of all the single-family houses sold in that time. On a wider scale, Raineth owns 445 properties in six cities in suburban St. Louis. Renwick’s brother-in-law, Detang Chen, a partner in the firm, attended Washington University in St. Louis and was behind the firm’s decision to invest in the area.

In Ferguson, 461 families are receiving federal subsidies, about 8 percent of the Section 8 vouchers issued by the Housing Authority of St. Louis County. That has scared off some of the larger institutional investors, which see better opportunities elsewhere. Renwick says that Raineth—which also owns houses in Kansas City, Mo., and Cincinnati—made up to 40 percent of its properties available to tenants who qualify for Section 8 assistance, which restricts the rent a landlord can charge.

Still, Susan Rollins, Executive Director of the Housing Authority of St. Louis County, said she would put Raineth in the “bottom third” of landlords who accept subsidies when it comes to basic repairs and renovations. Moreover, the Times says that tenants and other housing officials gave Raineth “mixed grades” as a landlord.

Renwick says this is the first complaint he’s heard from the Housing Authority, and notes that last year it issued subsidies for 90 Raineth tenants. He also points out that it can be difficult to renovate a property when it is occupied. “We strive to treat our tenants well,” Renwick said.

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  • William Penn

    Sounds like great news. I applaud the investors for buying these properties and not raising the rent. Alternatively, they could improve the property and pass along the cost to the renter, which would then force the already struggling renter to have to move out. Then there would be public outcry that the investor, who spent years working hard to achieve the financial stability they enjoy, isn’t eating the cost. As for homeowners who owe more on their mortgage than the property is worth, it sounds like they made a bad investment. Its the risk you take when you buy property.

    If this isn’t good news, then the investors can leave it up to residents of Furguson and let take responsibility for improving the property value of their community.

    • Luke Visconti

      Yeah, they can fix up the housing stock that they lost due to predatory lending (that led to the subprime crisis) with all of the resources of people who average 1/20th the wealth of the average white household and roughly one half the income. You supercilious little ignoramus. Luke Visconti, CEO, DiversityInc

    • Where did it say that the absentee landlords are “not raising the rent?” It sounds like you may not be very familiar with real estate investments. As a general rule, absentee landlords have a detrimental effect on a community. And it wasn’t the homeowners who made the “bad investments,” it was the predatory mortgage lenders who speculated in the secondary market with bundled derivatives and caused the entire housing market — and almost the whole World’s economy — to crash in 2008. Oh, I get it, you’re playing devil’s advocate, right?

      • Stan Jefferies

        You raise the rent to gentrify the area. And its painfully obvious that Ferguson property values are in the toilet. Nice try though

        • Luke Visconti

          Urban renewal equals Negro removal, right, Stan? Luke Visconti, CEO, DiversityInc

        • Landlords raise rents to increase their incomes from the properties. If enough landlords do so, gentrification can be an unfortunate side-effect. However, this article in no way mentioned raising rents, one way or another.

      • Wondering Moon

        Agree 100%. People amaze me how easy it is to flip scripts, rewriting the truth to satisfy their ignorance and/or biases.

  • Stan Jefferies

    You might want to look in the mirror with that “supercilious” comment my friend. Noone on here is more haughty or arrogant than you. I understand that its your little website, but anyone who disagrees with you gets an insult and then a threat? You chose to go into the race baiting business buddy, so you’d better accept that not everyone agrees with you and they damn sure arent going to tolerate your puerile tantrums. And while we’re on pre-pubescent behavior, had you ever even heard of Ferguson Mo prior to August 9th? Or did you swoop in like a scavenger, waving the diversity flag, and screaming about a municipality of which you know nothing. Do you reside in a low income area or are you passing judgement from your ivory tower?

    • Luke Visconti

      There are a lot more insults that you don’t see because I edit them out. I am not running a tool for bigots to push propaganda. At least I didn’t swoop in with automatic weapons, armor and enough tear gas to make an entire state cry. Luke Visconti, CEO, DiversityInc

    • Wondering Moon

      More name calling Stan Jefferies? You packed a lol o t of them in one paragraph. Maybe it is you who should accept that hurling insults that not all will agree with your tactics or bigotry.

  • William Penn


    No, I am not playing devils advocate. I was applauding the investors. I don’t claim to know what race the investors are. I don’t know where you get your information from or if you contacted every investor to ask their race, but I don’t have those kind of resources. Perhaps you can share your source. Additionally, predatory lending is related to “lending”, not “renters” living in homes “owned” by “investors”. As an owner of several properties, I know the difference. I am not a lender. Your comment about predatory lending applies to the investors who received the loans (lending). I encourage you to do some research so that you can apply fact to your disagreement.

    • Luke Visconti

      The houses that are being purchased by outside investors were houses that, in many cases, were lost by the victims of predatory lending. That this happened disproportionately to Black-, Latino- and woman-headed households is widely documented—and banks have voluntarily paid billions of dollars in negotiated settlements (thus avoiding lawsuits) for their guilt. So now you’re defending absentee landlords instead of the people in the community. You’re too foolish to even understand the basic issues. What kind of cruelty is in your mind to side with outside investors over the oppressed people in that community? I hope you’re unemployed—I hate to think of you crushing the spirits of those are forced to work around you. Luke Visconti, CEO, DiversityInc

    • I didn’t make any comments about the investors’ races. And, my comment about predatory lending was in response to your attributing homeowners’ being underwater to their own faulty decision-making, rather than to the housing crash, which left alot of innocent people in the same boat.

    • Luke Visconti

      Never. You add nothing to the conversation. What scares me is that you’re emailing from a law-enforcement office. I hope you’re a clerk and not someone with a badge and gun, because I’ve seen many a dog turd with a higher IQ. Luke Visconti, CEO, DiversityInc

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