Investors Target Oakland Foreclosures as Rental "Opportunities"

A Church in West Oakland

Oakland, California has experienced more than its fair share of foreclosures since the US housing market bubble popped a few years ago. Recently, investors have been purchasing foreclosed homes in the city's tough western neighborhood. What's interesting is that the homes' new owners are not reselling the homes. Instead, according to a story in today's online edition of sfgate.com, the houses are being rented.

The catch in the story is that the rents are more than the former owners' mortgage monthly mortgage payments. (I don't know the profit margin on that type of transaction.) The higher rent scenario would logically shut out the previous residents from returning to their homes. Who is moving in? The likely suspects are those people who can barely afford a broom closet in San Francisco, where the rents are at Manhattan levels. They are now the spearhead of the gentrification of certain West Oakland blocks, an inconceivable thought only a few years ago.

Unstated in the sfgate.com piece is where the uprooted families go. I suspect that, if it were up to the investors, the dispossessed would simply disappear.