MEMPHIS, Tenn. — With a surge of outside investors buying up homes and turning them into rental properties, Memphis area homeowner associations are pushing back to slow the trend on their terms, and giving local families better opportunities to buy a home.
One HOA - Walnut Gardens in Cordova - tacked on new rules to even the playing field between families and investors. They explicitly banned rental properties and closed off opportunities which could allow outside investors to deny local families homeownership.
It only took one 'for rent' sign in that community for its HOA to take notice and take action.
"We are a community that prides itself in having families here," Walnut Gardens HOA President James Wells said. "We've been monitoring the trends of home buying, mostly here recently by investors and companies, and we wanted to protect the value of our community."
That's why last December, Wells and his fellow neighbors took charge and pushed back against outside investment groups denying local families home ownership.
"We know through this buying of properties by investors and such that a lot of folks are being pushed out of the market, and we want to discourage that," Wells added.
A vast majority in the Walnut Gardens HOA - more than the 2/3 of homeowners needed - approved an amendment which banned rental properties and required homeowners live on the property permanently.
"We want to encourage people to come in and be proud of their neighborhoods, invest in their neighborhoods. This is a way for us to do that," Wells said.
"They need to kind of consider what these corporate buyers coming in will do to the neighborhood," Realtor Cassandra Bell-Warren added, who also lives in Walnut Gardens. "What I'm seeing is that a lot of my buyers are getting knocked out of the market from the corporate buyers."
Bell-Warren encouraged other HOAs limit or ban investor sales and rental properties altogether by consulting their attorneys and gauging interest from homeowners.
"With any HOA, they just need to have a meeting, let the neighbors know what's going on, and then they will probably see the benefit of it," Bell-Warren said.
In addition to homeowner associations updating their bylaws addressing outside investor purchases and rental properties, the Shelby County assessor and Shelby County attorney are also pursuing how they can legally tweak zoning rules to slow the practice.