Thu October 24, 2013
A Hedge Fund Buying Up Huber Heights? WYSO’s Lewis Wallace Talks to Bloomberg Reporters
A story in Bloomberg earlier this week found that hedge fund Magnetar has bought up a significant chunk of the rental stock in Montgomery County’s Huber Heights—and then requested a major reduction in those properties’ values. That reduction, if approved, could affect the city’s taxes and levies.
The rental market is a burgeoning area for big investors since the Recession, as many would-be homeowners who went through foreclosure or lost their jobs are now renting, rather than buying. But while Magnetar stands to benefit from that growing market, Bloomberg reports the company was also responsible for structuring risky investments and betting against those during the housing bubble.
A downward reassessment like the one Magnetar is asking for can have the indirect effect of raising taxes for all property owners, while the company reduces its own tax obligation. Taxes are already a sensitive issue in Huber Heights, where the school district will bring a school levy to voters this November after a string of rejections at the ballot box. Perlberg and Gittelsohn speculate that these large-scale purchases of properties to maintain as rentals could become a larger trend nationwide, affecting the tax base in other vulnerable places.
The Economy & Business
Facing the Mortgage Crisis