In recent years, East New York has become a huge magnet for house flippers trying to make a profit by purchasing cheap homes and then quickly selling them for much more. In fact, this area has the highest rate of house flipping than any other part of Brooklyn, as the homes here have been sold for a higher profit rate than anywhere else. And because flipping homes tends to negatively affect neighborhoods—sharply increasing prices so locals can no longer afford to buy—the current residents are working to make it much harder for that to happen.
More specifically, they're working together on a plan that would stop house flippers from getting in contact with them. Essentially, they want to create a cease-and-desist zone, allowing Brooklyn residents to add themselves to a list that says house flippers can't contact them. If the house flippers were to break this rule, they'd be fined, criminally charged, and could even lose their real estate license.
How Cease-and-Desist Zones Could Help
Currently, New York City has three cease-and-desist zones that were granted by the Department of State decades ago. Two of them are in northeast Queens, and the third is in the Country Club neighborhood within The Bronx. Now local residents and lawmakers alike want all of Brooklyn to become a cease-and-desist zone for the next five years, as well.
After all, the residents are tired of feeling harassed by house flippers who frequently call them and offer cash for their home or leave fliers on their door. Some even knock on the door as soon as they find out the homeowner is having trouble paying the mortgage. Of course, they offer a lot less than the home is worth, and then they turn around and resell the property for lots more.
Not only is this frequent contact from house flippers bothersome for many, but it can also be downright predatory. Some people give in and sell for less than the house is worth simply because they temporarily can't afford their mortgage, and fast cash seems easier than looking for help through loan modifications or foreclosure defense from a legal professional. And even the homeowners who don't sell are affected negatively from house flipping because when the surrounding homes suddenly increase in value due to gentrification, their property taxes go way up.
Waiting for Answers
To make Brooklyn a cease-and-desist zone, the New York Department of State will need to consider whether there are currently repeated solicitations that upset the residents. So far, the Coalition for Community Advancement has been working with local residents to collect proof of the solicitations. In about two years, they've collected 540 surveys discussing residents' experiences with home flippers.
In addition, local lawmakers are trying to discourage house flipping in general. They're doing this by pushing for a higher real estate transfer tax. This could make it costlier to resell a house less than two years after buying it. Different versions of these bills are currently in committee with the Senate and the Assembly, with support from local politicians.
If you've been contacted by house flippers in New York because you‘re having trouble making your mortgage payments, there are likely better options than selling your home for less than it's worth. Instead of engaging with house flippers, contact a New York real estate attorney to find out if you're eligible for a loan modification or can get help avoiding foreclosure.