Inventory, Investors, and Laws

California lawmakers are taking a stand against corporate landlords in the state's single-family housing market. With at least three bills on the table, the Legislature aims to curb institutional investors from buying up and renting out single-family homes— a move supporters say is necessary to protect homeownership opportunities for everyday Californians.

The Rise of Institutional Landlords

While apartment buildings have long attracted big investment firms, the single-family rental market is a relatively new phenomenon. During the Great Recession, corporations began acquiring foreclosed homes, turning them into large-scale rental portfolios. Advocates argue that these companies helped stabilize the housing market by filling vacant homes, while critics claim they have contributed to rising home prices and rents, making it harder for families to achieve homeownership.

The issue resurfaced during the pandemic when demand for suburban housing surged, driving prices higher. Though rising interest rates have since slowed the trend, the presence of corporate landlords in the market remains a concern for policymakers.

What Do the Proposed Bills Do?

Three bills seek to restrict corporate ownership of single-family homes:

• Assembly Bill 2584 (Lee, D-Milpitas): Would prohibit institutional investors from purchasing additional single-family homes for rental purposes.
• Senate Bill 1212 (Skinner, D-Berkeley): Takes a more aggressive approach, banning institutional investors from buying, acquiring, or leasing single-family homes or duplexes altogether.
• Assembly Bill 1333 (Ward, D-San Diego): Aims to prevent developers from selling newly built homes in bulk to large investors, particularly in "build-to-rent" communities. This bill is backed by the California Association of REALTORS?, which opposes bulk sales that bypass traditional homebuyers.

Defining "Institutional Investors"

Each bill has a different definition of "institutional investor":

• Lee's bill: Applies to any company owning 1,000+ single-family homes (affecting four major companies with 17,300 homes in California).
• Skinner's bill: Targets all managed funds, private equity firms, and real estate investment trusts (REITs).
• Ward's bill: Uses the 1,000-home threshold but explicitly includes REITs.

How Many Homes Do Corporate Landlords Own?

Nationally, companies with at least 1,000 single-family homes control around 446,000 properties—less than 0.5% of all housing but a significant share in some regions. In California, these large investors own under 2% of single-family homes, with the highest concentration in the Inland Empire, San Joaquin Valley, and Sacramento suburbs. Fresno leads the state, with 5.9% of single-family homes owned by institutional investors.

Are Corporate Landlords Making Homeownership Harder?

Institutional buyers compete for homes, potentially shutting out first-time buyers. Studies in Atlanta and the Netherlands suggest that increased corporate ownership correlates with lower homeownership rates. However, supporters argue that rental availability benefits those who cannot afford to buy, offering access to better neighborhoods and schools. There is also evidence that restrictions on investor-owned rentals can lead to less economic and racial diversity in communities.

The Future of Corporate Homeownership in California

As lawmakers debate these bills, the broader housing crisis looms large. While limiting corporate ownership may help some buyers, housing supply remains a fundamental issue. Without increased home construction, affordability challenges are unlikely to disappear.

The outcome of this legislative push will shape California's housing landscape for years to come. Whether the state prioritizes protecting homeownership or allowing market-driven investment will be decided in the coming months.

A Brighter Future for Homebuyers

While challenges remain, this shift in legislative focus signals a positive step toward making homeownership more attainable for Californians. If successful, these bills could open doors for more families to achieve the dream of owning a home. By balancing regulation with housing development, California has an opportunity to create a more equitable and sustainable housing market—one that prioritizes its residents and their futures.

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