Want to Gentrify a Neighborhood? Study Says Buy in Little River, Liberty City
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Do you have cash to burn and no conscience about gentrifying historically poor, mostly minority areas of town? Good news! The website RealtyTrac has just finished a study on where to start buying up property.
The site found that the zip code 33150, which encompasses parts of Little River, Little Haiti, and Liberty City, as well as the more affluent areas of El Portal and Miami Shores, is one of the best "down and out" areas poised for a real-estate comeback in America.
If you're a house-flipper, the study says, you should buy as many properties in the area as possible so you can renovate them and resell them for twice the price as rents continue to rise.
Of course, another way to look at the results is that 33150 is Miami's area most defenseless against wealthy developers who are probably already lining up to buy distressed properties from poor people in Little Haiti, Liberty City, and Little River and then sell those homes to hipsters getting priced out of Wynwood.
RealityTrac's study ranked the top 35 "down and out neighborhoods" to buy a home in the nation. To compile the study, the website analyzed 3,561 U.S. zip codes and ranked them in terms of house-flipping return-on-investment and gross profit, as well as how many homes in a given area were "underwater" — that is, whose mortgages actually cost more than the current value of their homes.
Homestead also landed at number 30.
The study, then, becomes a pirate's treasure map for urban developers looking to find the next "hot" urban areas in which to invest. Perhaps not surprisingly, many of the urban areas ranked on RealtyTrac's list (like Philadelphia's Grays Ferry, which ranked seventh) sit adjacent to young, hip, and expensive urban zones with sky-high rents. Many of the areas on the list are locked in heated gentrification debates, as rents have begun to climb and push out poor longtime residents.
This brings us to the 33150 zip code, which came in at number 14. Just from looking at a map, any longtime Miami resident could tell you to invest in said area because it sits exactly north of the already-gentrifying Little Haiti neighborhood (which, in turn, sits north of Wynwood), and just west of the also rapidly gentrifying Upper Eastside and 79th Street Corridor. Art galleries are also even springing up in portions of Little River near Biscayne Boulevard.
Plus, I-95 bisects the zip code, making travel a cinch:
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According to RealtyTrac, home-flippers in the 33150 (which has less of a ring to it than "the 305") typically see a 111 percent return on investment after buying a distressed property and rehabbing it. (In other words: They can sell houses for twice the amount they paid.) Though home-flipping is quite common in the real-estate business, many critics see gentrification as a scourge because longtime residents typically can't afford nearby homes once they've been rehabbed.
Perhaps the most concerning metric in the study is this: A full third of the homes — 32.1 percent — in the zip code are "underwater." Though homeowners with underwater mortgages are basically trapped and unable to sell their homes because they would need to pay a bank added money to make up for the cash they lost selling their houses for less than they paid for them, the metric does show a housing market's overall health. Areas with high numbers of underwater mortgages are also likely to have high foreclosure rates and are generally helpless if wealthy investors want to come in and buy up large swaths of land.
The study, then, confirms something Miamians have been worrying about for a while: Once rents get too high in Little Haiti, developers seem poised to buy up the rest of Little River, and even Liberty City, next. It doesn't help that local residents have already had to fight to prevent the city from steamrolling the area's oldest housing project to put a mixed-use apartment complex there.
For now, though, the 33150 zip code remains one of the few in Miami where rents have remained at a humane level, though this is because of city leaders' longtime neglect of the area.
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