[dennisw]

Tough situation. There's very little solace for someone who has tied a major amount of their limited capital in a residence in a neighborhood that is going through this sort of transition. If and when housing prices rise again, this problem may sort itself out. Waiting it out may be very uncomfortable.

It seems there should be some strict laws related to having multiple families residing in one residence. If there are such laws, then you need a local government which is willing to enforce them.

In my neck of the woods there has been problems related to folks purchasing a house in the normal neighborhood and then turning it into a halfway house. Not a lot of happy neighbors when this occurs.