Newsom describes behavior as “monopolistic,” an Assembly bill seeks to limit corporate purchasing of single-family homes
SACRAMENTO, Calif. — In a rare moment of political alignment, California Gov. Gavin Newsom and President Donald Trump are both criticizing large corporate investors for buying single-family homes and converting them into rentals, arguing the practice is worsening the state’s housing affordability crisis.
The shared stance has renewed momentum behind legislation by Bay Area Democratic Assemblymember Alex Lee, which would limit corporate ownership of single-family homes in California.
“We have to stop Wall Street investment corporations from buying up the American Dream,” Lee said.
Lee’s bill, which has passed the Assembly and is awaiting a Senate committee hearing, would prohibit business entities — including corporations, investment firms and limited liability companies — that already own more than 1,000 single-family homes from purchasing additional homes to rent out. Lee emphasized the proposal targets large institutional investors, not small mom-and-pop landlords.
“We should be the first state to ban these Manhattan-based BlackRock-affiliated corporations, just as the governor talked about. We should ban these corporations who are buying up single-family homes. We should use the tax code, we should use the regulation, we should use our Department of Justice to prevent them from scoping up the American Dream, the California Dream,” Lee said.
The proposal follows mounting scrutiny of large home-leasing companies such as Invitation Homes, the nation’s largest single-family rental operator, which owned more than 12,000 homes in California as of 2024.
The company recently reached a settlement with the state over allegations it unlawfully increased rents. Invitation Homes did not immediately respond to a request for comment.
California Attorney General Rob Bonta said corporate investors often treat housing purely as a financial asset.
“They only see them as monetization, as opportunities for profit,” Bonta said. “Homes are places for people to live in.”
Lee introduced a similar measure last legislative session that failed to advance. This year, however, the proposal has gained traction as both Newsom and Trump publicly voiced support for curbing institutional investment in housing.
Trump recently wrote on social media that he is “immediately taking steps to ban large institutional investors from buying more single-family homes” and would urge Congress to codify such restrictions.
Newsom echoed the sentiment, calling it “shameful” that private equity firms have become major landlords in California communities.
“That means more oversight and enforcement, and potentially changing the state tax code to make this work,” Newsom said during his State of the State Address — his final one in office.
The governor’s office did not provide details on what specific actions the state may take. A White House spokesperson said Trump is committed to increasing housing supply, reducing red tape and lowering costs, and plans to outline his proposals at the upcoming World Economic Forum in Switzerland.
Opposition, however, is just as loud.
Groups argue corporate investors make up a small portion of the housing market and say restrictions would do little to lower costs.
“It’s less than 1% in California of that type of ownership, if you’re talking about publicly traded companies,” said Debra Carlton of the California Apartment Association. “If you want to outsmart the market, then let’s just build more housing.”
The debate has intensified following reports that investors and corporations have been purchasing land in areas affected by the Palisades and Eaton wildfires, raising concerns about post-disaster land speculation.
“Housing is too expensive. Period,” Bonta said. “We need to take important actions to address it, and this is one of them.”