Landlord seizes single family homes in Lauderdale
Longtime resident Joe Taylor loves the city of Lauderdale so much that he’s spent the past six years becoming one of its biggest landlords.
Meanwhile, Taylor snapped up two duplexes and 25 single-family homes, which he has since converted into rental properties in this hamlet bordering Minneapolis and St. Paul.
Taylor’s spending spree has raised alarm bells among the city’s 2,600 residents and city officials. In an already tight housing market, they fear the loss of so many homeownership opportunities for young families by Taylor and other would-be investors will forever alter the character of their city.
“Lauderdale is a great place to live. Our units are among the most affordable in the metro,” said City Administrator Heather Butkowski. “Now all of that natural affordable housing is being taken over and rented out at often unaffordable rents.”
Taylor defends his purchases, saying he’s investing in his own community which, counting the city’s 500 apartments, already has more than half of the tenants.
“I sought to acquire properties that needed repair and attention. It increases the value of each one,” he said. “It helps change the face of the community.”
A national trend
The dynamic in Lauderdale is playing out across the country, according to a 2022 report from Harvard University’s Joint Center for Housing Studies.
Investors bought 28% of single-family homes sold in the first quarter of 2022, compared to 19% a year earlier and 16% on average in 2017-2019, according to the report.
In the Twin Cities, neighborhoods from Minneapolis to suburbs such as Fridley and Hopkins are seeing a dramatic increase in business ownership, according to a database developed by the Federal Reserve Bank of Minneapolis.
Business consultant Zak Knudson and his partner live near several Taylor rental homes. He said it’s disheartening for homeowners who have invested time and energy in their homes to see some rental properties lacking in general maintenance turn into tenants who never settle in the neighborhood.
“That’s the problem with rental properties. It’s a cash cow. There’s not a lot of incentive to improve the property,” said Craig Zbacnik, a retired entrepreneur who moved to Lauderdale. in 1984 and raised his family there. “It’s more like, ‘How can I increase my profit margins with as little investment as possible?’ It’s frustrating.”
Reverend Dave Greenlund, a longtime Lauderdale resident, said Taylor’s shopping spree left a sour taste in his mouth. Greenlund, the pastor of St. Paul’s Lutheran Peace Church, said he recently lost $2,000 on a property another buyer bought and turned into a rental. Greenlund had hoped to reduce its numbers in town.
Now Greenlund fears investors will continue to buy affordable homes, finding it safer and more lucrative to park their fortunes in the quiet, tree-lined neighborhoods of Twin Cities instead of bustling Wall Street.
“The problem is, Taylor says it’s such a beautiful neighborhood. But what is a neighborhood? It’s relationships and people,” Greenlund said. “I think he likes the neighborhood. He doesn’t see anything wrong with what he’s doing.”
Lauderdale Mayor Mary Gaasch said she has heard the concerns and is in talks with community partners to invest some of the county’s new housing and redevelopment fees to help potential buyers of a first house to make successful offers in Lauderdale.
“We are deeply committed to maintaining our natural affordable housing,” she said.
Taylor, who works full time running his rental business, is open about what he does.
Taylor bought a house in Lauderdale around 2000 and made the community her home. After the housing crash of 2007, he began investing heavily in single-family rentals, buying and repairing homes on the East Side of St. Paul and in South St. Paul and Minneapolis.
About five years ago, Taylor said, he sold those properties and aggressively entered the Lauderdale housing market. As a licensed estate agent, he said, he has an in-depth understanding of the local market and inspects properties himself. There’s no question he has an edge over first-time home buyers, he said.
“I haven’t lost too much. My bids are generous,” he said, noting that he often bids against other investors.
Despite the criticism, Taylor said he felt he had good relations with city leaders and neighbors and wanted to maintain them. He does not foresee a wave of new acquisitions.
“I don’t want residents to be uncomfortable with me,” he said. “I’m not looking to buy the whole town.”
Taylor said the community benefits from her local, hands-on management. He said he lives within two minutes of all of his properties, responds to tenant concerns immediately and often does repairs himself.
“He totally exceeded my expectations of what a landlord would be like,” said tenant Shauna Hendrie, 22, who moved from New York to attend the University of Minnesota‘s College of Veterinary Medicine. “I love being in such a beautiful neighborhood. I feel at home. It makes me want to stay here.”
Alexia Lythos and her sister rent a tidy little one-story house from Taylor. A 24-year-old University of Minnesota student and U.S. Marine Corps veteran, Lythos said the home was vacant and used for storage before Taylor renovated it into a two-bed, two-bathroom rental. baths with new fixtures and a dark teal accent. wall that the sisters have turned into a gallery of their original artwork. They pay $1,600 a month in rent.
Lythos said neighbors stopped her to compliment the renovations and even asked to take a peek inside.
“It’s a very safe and quiet suburban neighborhood,” she said. “I like it like that.”
Garron Houston originally rented a duplex from Taylor in St. Paul and now rents one of Taylor’s homes in Lauderdale for $1,500 a month. Houston, 60, lives two doors down from Taylor’s home and can walk to her job as a cashier at a local gas station. He calls his rented house a “blessing”.
“You can’t find a better guy around. He’s been awesome,” Houston said of Taylor.
Houston said he understands neighbors’ concerns about how things are going – he too was once a homeowner.
“If I could own, I would buy in a heartbeat,” he said.