On Wednesday, February 6, to the largest crowd gathered for a city council in recent memory, the Alliance for Congregational Transformation Influencing Our Neighborhoods (ACTION)—the Gamaliel affiliate in Youngstown, Ohio—won a major battle in their ongoing campaign to secure quality, affordable housing for residents in Youngstown. When the city council voted, 7-0, to end predatory land-installment contracts, the crowd erupted with cheers.
A land-installment contract is a seller-financed home purchase that gives the buyer possession of the property while making installment payments plus interest to the seller over a set period of time. It is an alternative for prospective buyers who have been locked out of traditional home buying because of income, race, and/or credit history. Because these contracts do not include the rights and protections afforded buyers by traditional mortgage law, the buyer may be faced with exorbitant fees, buyer-required repairs, and balloon payments; and in Ohio the seller can cancel the contract if the buyer misses a single payment without returning any previous payments or investments in the property.
ACTION held a public meeting in October 2018 that lifted up this critical issue. Both City Law Director Jeff Limbian and City Health Commissioner Erin Bishop were present to hear the concerns of residents and to respond to their demands for action. According to Dr. Rosie Taylor, ACTION board member, “Predatory lending [like land-installment contracts] not only blights our neighborhoods, but it also puts the most vulnerable of our citizens in our community at risk.”
The Youngstown City Council was prepared to act at their January meeting, but ACTION and partner organizations demanded tougher language and protections. The new Youngstown law requires sellers to bring a house up to code, provide a title search and have the property appraised. It eliminates an automatic transfer back to the owner if the buyer doesn’t pay and also gives buyers the right to fight problems through the courts.