The Foreclosure Report

Rental Ban Won't Prevent Foreclosures

The Associated Press has this update on Indiana. "Developers would have to wait three years before renting out a newly built home under a Greenwood proposal aimed at protecting unsuspecting buyers from being stuck in primarily rental communities."

"Mayor Charles Henderson said he was proposing the idea after a subdivision developer in the city reneged on his promise for it to be geared mainly toward empty-nesters. 'I want to send a message that people deserve some protection and that anybody that buys into an addition can feel comfortable it isn’t going to be turned into a rental community,' Henderson said. 'It would help protect folks that get crossed up.'"

"The City Council in the southern Indianapolis suburb heard arguments against the proposal Monday and put off action until its June 19 meeting. The proposed ordinance includes a fine of up to $250 against violators."

"'One thing that I’m concerned about is the fact that we’re still going to have foreclosures, and that means that we’re going to have more houses that are vacant for two to three years while they wait for this time period to wash out,' real estate agent Bruce Brian told the council members."

"The proposal to ban new homes from being rented out is unusual, said Joe Molinaro, of the Chicago-based National Association of Realtors, who has reviewed 300 housing laws nationwide. 'Typically, towns have powers through state laws to do zoning, but zoning always deals with uses such as residential versus commercial, or the size of lots,' he said."

"'It doesn’t deal with whether a person can own or rent a space.'"

posted by Ben Jones @ 9:57 AM