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A Hedge Fund Is Now The Largest Landlord In Huber Heights

Adapted from Wikipedia's OH county maps by Catbar.

Adapted from Wikipedia’s OH county maps by Catbar. (Photo credit: Wikipedia)

Huber Heights, Ohio, a Dayton suburb, finds itself 9% owned by a hedge fund that played a key role in inflating and exploding the sub-prime mortgage bubbleputting the town’s public school and other budgets in jeopardy.

Magnetar Capital owns one of every eleven homes in 40,000-person Huber Heights after purchasing the rental company founded by the town’s namesake, Charles Huber. Huber built almost 13,000 houses in the town from 1956 to 1992. When his widow decided to sell the company, Magnetar jumped at the chance. The deal made Magnetar “the town’s largest landlord,” according to Bloomberg.

Now under new management, the company wants the county tax assessors to cut their assessment of the value of Magnetar’s homes by 49% — a cut that would gut the town’s tax collections and jeopardize public services and school budgets. If Magnetar gets its reassessment, the small town will lose $1.39 million in tax revenue and likely have to lay off sixteen teachers.

Mangetar has has escaped charges for its role in the sub-prime mortgage racket that brought down the economy, but it was under federal investigation for years for betting against the investment positions it recommended to others. Firms that did business with Magnetar lost as much as $40 billion on the deals, and the firm’s strategy was key to keeping the sub-prime market going. Over the summer, the Securities and Exchange Commission gave up on filing charges against it.

Via ThinkProgress.

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