A California real estate analyst discovered that thousands of homes in the state are owned by big Wall Street firms. And, in the midst of a housing affordability crisis, the California State Assembly is taking notice.
Curious about how many California homes are owned by Texas-based real estate investment trust (REIT) Invitation Homes, Ryan Lundquist made a map of their locations, which he showed to CBS News Sacramento.
The real estate analyst and appraiser from Sacramento discovered that Invitation Homes — which calls itself “the nation’s largest single-family home leasing and management company” — owns 11,000 homes in California, with nearly 2,000 of those in Sacramento.
“All these dots represent where the company owns. Pretty wild,” Lundquist told CBS News Sacramento while pointing to a map on his computer screen. “Absolutely, we can’t ignore this. We need to have a conversation about it. This is a really hot issue.”
His discovery adds fuel to a growing movement among lawmakers to limit institutional control over single-family housing.
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Why lawmakers are taking notice
After the Great Recession, government-backed investment firms began buying up foreclosed homes to convert into rentals.
“It was that rare opportunity that attracted the institutions to build a portfolio out of these foreclosed properties,” Steven Xiao, an assistant professor of finance and managerial economics at the University of Texas in Dallas, told CNBC.
These firms, including Tricon Residential, Progress Residential, American Homes 4 Rent and Invitation Homes — some of which are backed by private equity firms such as Blackstone or investment managers such as Pretium Partners — have bought thousands of homes across the U.S and developed built-for-rent communities.
In 2023, MetLife Investment Management predicted that institutional investors could control 40% of U.S. single-family rental homes by 2030.
That’s why California Democratic Assembly member Alex Lee wants to cap the number of single-family homes these firms can buy in California. “I would say it’s housing-crisis profiteering,” Lee told CBS News Sacramento. “So as we produce more housing, we don’t want the market to be eliminated or narrowed because of those corporate actors.”
Lee has introduced California Assembly Bill 1240, which “would prohibit a business entity, as defined, that has an interest in more than 1,000 single-family residential properties from purchasing, acquiring, or otherwise obtaining an ownership interest in another single-family residential property and subsequently leasing the property, as specified.”
According to CBS News Sacramento, as of July 2025, the bill has passed the Assembly and is headed to the Senate Judiciary Committee.
Responding to the legislation, a spokesperson for Invitation Homes told CBS News Sacramento that “this is a tired narrative that lawmakers often promote that distracts from the real causes of high housing costs in markets like California.”
Still, in 2024, Invitation Homes settled for $2 million after the California attorney general sued the company for price gouging.
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Disrupting single-family housing markets
Despite this “tired narrative,” some potential homebuyers are being outbid by corporate buyers who are able to make quick, all-cash offers, according to NBC News.
“This has increased prices in markets with already limited supply, such as San Francisco, Los Angeles and New York, intensifying the affordability crisis for residents,” according to Jae Hong Lee in the Emory Economics Review.
In 2021, for example, institutional investors owned more than 28% of the single-family homes available for rent in metropolitan Atlanta, “which amounted to 10% of all rental properties in the region,” according to the Urban Institute.
Lee, paraphrasing from Jenny Schuetz’s book, Fixer-Upper: How to Repair America’s Broken Housing Systems, adds that “in major U.S. cities, speculative investors often purchase properties only to leave them vacant, expecting a significant return when prices rise.” This, in turn, “reduces the availability of affordable housing and contributes directly to price inflation.”
Not everyone agrees that institutional buying makes housing less affordable.
“There is a correlation between areas of the country that have a lot of institutional single-family operators and larger increases in home prices, but correlation is not causation. They target fast-growing areas,” Laurie Goodman, founder of the Housing Finance Policy Center at the Urban Institute, told Governing Magazine.
Goodman points out that institutional investors often buy “dilapidated homes that first-time homebuyers don’t have the means to repair anyway,” and that lawmakers should focus more on the rental practices of these companies.
But it’s not just homebuyers feeling the effects — renters face challenges, too.
For example, some private equity landlords raise rents, impose new fees that increase housing costs for tenants and “skimp” on upkeep, according to research by Americans for Financial Reform. Some are also quick to issue eviction notices and then “aggressively pursue tenants in court.”
Regardless of where the negative impacts of institutional buyers are being felt, lawmakers are looking to mitigate them, with “at least half a dozen states” looking at legislation related to the issue, according to Governing Magazine. Whether these proposed limits gain traction remains to be seen, but the debate over institutional ownership is far from over.
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