"Gov. Gavin Newsom is taking aim at institutional investors making purchases in the residential market. Following a similar announcement by President Donald Trump, Newsom is planning to work with local legislators to prevent private equity and hedge fund investors and other corporate entities from purchasing homes in California, the Mercury News reported, citing communications with the governor's office. The fact is that large investors are purchasing homes faster than families can buy them, the governor's office said."
"Newsom shared his approach in his State of the State address on Thursday. There is another urgent area requiring our attention. That's institutional investors snatching up homes by the hundreds and thousands at a time, crushing the dream of home ownership, and forcing rents too damn high for everyone else. It's shameful that we allow private equity firms in Manhattan to become the biggest landlords in many of our cities, Newsom said."
California plans to work with the Legislature to restrict private equity, hedge funds, and corporate entities from purchasing single-family homes and other residential properties. The state cites faster purchasing by large investors than by families and describes the practice as crushing the dream of homeownership and driving rents too high. Proposed responses include increased oversight and enforcement and possible changes to the state tax code to deter institutional buying. About 3 percent of single-family homes in California are owned by large landlords, while large institutional landlords own less than 1 percent nationally; related stocks fell after federal attention to the issue.
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