Investing in the middle : individual and investment ownership trends in St. Louis’ middle neighborhoods
Middle neighborhoods – neighborhoods that are “not in deep distress, but are not thriving either,” (Brophy, 2016) – have emerged as a recent point of interest for scholars interested in studying American cities in the Midwest and Northeast due to their potential to provide market-rate affordable housing options, particularly homeownership opportunities, to median and low-income residents. However, their relative affordability and stability in the housing market also makes them attractive to real estate investors. Because of their age, most housing units in middle neighborhoods require maintenance and upkeep and are thus vulnerable to decline due to neglect. Absent investor ownership is a point of concern for middle neighborhoods in many cities, making owner-occupancy an important factor for neighborhood stewardship. Using St. Louis as a case study, this report seeks to evaluate the extent to which homeownership and investor ownership has changed in the city’s middle neighborhoods since the onset of the financial crisis and offer suggestions to strengthening middle neighborhood housing markets. In doing so, it hopes to speak to the literature on housing financialization within the context of smaller cities and middle neighborhoods. In the absence of a formal qualitative definition for middle neighborhoods, the Market Value Analysis technique, developed by the Reinvestment Fund identified St. Louis’ middle neighborhoods using 2019 data. Subsequent analysis of investor sales from 2007-2019 showed a net loss of homeowners since the onset of the financial crisis and that middle neighborhoods have been epicenters for investor sales in the city. To maintain the quality of its middle neighborhoods, St. Louis must continue to engage in placemaking and placekeeping practices to develop desirable neighborhood narratives, expand opportunities for homeownership, and enforce property maintenance codes to curb negative repercussions that may emerge from absentee investor ownership.