With home affordability near its lowest level in over 40 years because of high mortgage rates and home prices, being able to purchase a home for $1 might seem impossible.
However, the city of Baltimore is offering a deal intended to attract new homebuyers. It’s practically giving away houses.
An estimated 13,000 homes in Baltimore are vacant with the city owning about 1,000 of them.
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For now, 200 of these properties have been approved to be marketed to Baltimore residents who commit to both living in and fixing up the properties, with city officials saying properties in the program are in the city’s most “stressed” housing markets.
The program was approved despite objections from City Council President Nick Mosby, who said that the new policy left him “deeply concerned.”
“If affordability and affordable home ownership and equity and all of the nice words we like to use are really at the core competency as it relates to property disposition, this is a really bad policy … because it doesn’t protect or prioritize the rights of folks in these communities,” Mosby said.
Other city officials pushed back on the characterization, pointing out that there is a 90-day window that gives Baltimore locals the right to buy before outsiders are allowed to make bids.
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It’s worth noting that the $1 deal isn’t available to everyone — just individual buyers and community land trusts. Still, developers would only have to pay $3,000, leading to possible opportunities for large profits if home values in the areas increase.
While the chance to get a home for $1 might sound like anyone could participate in the city’s offerings, a prospective buyer needs to be able to afford the costs to make many of these vacant homes safe to live in.
To help contribute to the initiative, the city is also giving out home-repair grants of up to $50,000 to individuals who prequalify for a construction loan.
Resident Maurice Brock warned of the dangers from these properties, telling WJZ-TV in Baltimore, “There are so many risks and hazards associated with these vacant properties … it’s a definite safety risk for citizens, for city employees and firefighters.”
Given that the city of Baltimore regularly ranks in the top five U.S. cities for violent crime, safety concerns are valid, especially as these properties are already in some of the toughest areas of the city.
Prospective homeowners or investors looking to invest in real estate without the headache of owning the actual property can consider purchasing real estate investment trust (REIT) stocks or buying into a fund such as the Vanguard Real Estate Index Fund ETF (NYSE:VNQ), which invests in a diversified basket of REITs.
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This article This American City Is Offering $1 Homes In Its Crime-Filled Neighborhoods, Sparking Concerns of Gentrification And Violence originally appeared on Benzinga.com
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