The Latest Plan to Exacerbate California’s Housing Crisis

Limits on ownership by institutional investors would curtail investment in the state’s homes

By Lawrence J. McQuillan. Excerpts:

"California lawmakers want to restrict corporate investment in single-family rental properties."

"establish a quota system, banning “institutional investors that own more than 1,000 single-family homes from purchasing additional properties and converting them into rentals.”"

"prevent hedge funds and “other corporate investment entities” from buying single-family homes in California"

"large institutional landlords own less than 2% of all single-family homes in the Golden State"

"Nationally, institutional investors owned only 5% of America’s 14 million single-family rentals in 2022"

"Corporate investors don’t control a large enough share of the housing in any market either to dictate rental prices or to squeeze out desperate home buyers."

"corporate landlords . . . often purchase neglected properties and make them livable again."

"institutional investors can buy distressed homes in bulk, upgrade them and rent them out. Their lower investment costs and specialized expertise allow corporate landlords to make necessary repairs efficiently and economically—realizing economies of scale—expanding the supply of urgently needed move-in-ready rental homes."

"investors spend more than $100 billion nationally each year to buy and rehabilitate single-family homes. The solution to the housing shortage is more investment, not less."