Government controls the cars we are allowed to buy. It controls the education of our children. It protects criminals and opens the borders to bring criminals and terrorists from foreign countries. Tax rates hold back investment. To build housing, developers need to lose money by building “affordable” units—making market rate units more expensive.
“AB 2584, introduced by Democratic Rep. Alex Lee, would prevent businesses from buying more than 1,000 single-family home properties and renting them out, as enforced by the state’s Attorney General. Lee says such institutional investors profit off of real estate markets with increasing rents while outbidding everyday Californians who are trying to buy homes.
The vote passed the Democratic-controlled Assembly on Tuesday with 48 in favor and 11 against, with at least two Republicans showing support.
This will not lower the cost of housing in California. It will force investors to invest in other States. We lose a real driver of the economy. That is how a Third World State operates.
California bill targeting ‘housing-shortage profiteers’ by limiting ownership passes Assembly
Kinsey Crowley, USA TODAY, 5/28/24 https://www.desertsun.com/story/money/business/2024/05/24/california-bill-ab-2584-house-ownership-limits/73843513007/
The bill would prevent businesses from buying more than 1,000 single-family home properties and renting them out.
- Democratic Rep. Alex Lee says that while the bill won’t solve the state’s housing crisis, it targets the most egregious corprations.
- The bill has been passed to the Senate Rules Committee for assignment to a policy committee.
A bill limiting the number of houses that a corporation can buy has passed the California State Assembly and is now in the state Senate.
AB 2584, introduced by Democratic Rep. Alex Lee, would prevent businesses from buying more than 1,000 single-family home properties and renting them out, as enforced by the state’s Attorney General. Lee says such institutional investors profit off of real estate markets with increasing rents while outbidding everyday Californians who are trying to buy homes.
The vote passed the Democratic-controlled Assembly on Tuesday with 48 in favor and 11 against, with at least two Republicans showing support.
California has some of the fastest-rising housing costs in the country. In April, the median home-sale price surpassed $900,000 for the first time in history.
Lee acknowledges that his bill alone will not solve that problem.
“I would never say this is a silver bullet to the housing crisis,” Lee told USA TODAY in an interview Thursday. “This is really mitigating harm, because these corporations are housing-shortage profiteers.”
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Corporate homebuyer ban would apply to 1% of home purchases
Data from the California Bureau of Research shows three companies already own more than 1,000 single-family homes each, and that a fourth more is just shy at 977. Invitation Homes, which was once owned by private equity firm Blackstone and owned the most homes in the state at approximately 12,000 houses as of December − according to the company’s filings − did not respond to USA TODAY’s request for comment.
Lee said he chose the 1,000 cap based off another housing bill that moved to the state Senate in January. AB 1333 aims to limit investors from buying new developments in bulk if the corporation already owns 1,000 units.
“We wanted to make it very clear that we’re not affecting Grandma here. You know, Grandma got three houses, she rents them out down the street,” Lee said about the 1,000 limit. “We’re talking about Blackstone.”
A bill analysis shows that businesses owning more than 1,000 homes made up less than 1% of California home purchases in 2023. But that’s not insignificant, Lee said.
“Half of Californians literally own zero (percent), so four actors owning 1% is a significant amount,” Lee said.
Corporate homeownership limit opposed by realtor, rental associations
The Alliance for Californians for Community Empowerment supports the measure, saying it could “even the playing field and stop the corporate buy-out of single-family neighborhoods,” according to the Assembly Floor bill analysis.
The California Association of Realtors, which opposes the bill, could not be reached for comment but in arguments submitted to the Legislature, said that the proposed law “lacks clarity.”
The National Rental Home Council, which also opposes the bill, said in the analysis that the proposal is targeting a small group and that many corporate housing investors have been net-sellers in the last few years.
“Institutional owners of housing are able to bring rental housing products to the market more rapidly than some other potential rental property owners,” the group said in a statement. “Our member companies bring choice to prospective renters who may wish to have a single-family home.”
The California Chamber of Commerce and the California Building Industry Association both suggested further amendments.
The bill had its first reading in the Senate on Wednesday and has been passed to the Senate Rules Committee for assignment to a policy committee. If it passes the Senate, the bill would head to Democratic Gov. Gavin Newsom’s desk.
