Newsom Plans Crackdown on Corporate Homebuying in California

Core Points - California Governor Gavin Newsom is set to announce a crackdown on institutional investors buying homes in the state, aligning with a similar initiative proposed by President Donald Trump [1][2] - The governor's office highlighted that large investors are purchasing homes at a faster rate than families, emphasizing the need for working families to not compete with well-capitalized investors [2] - Both Newsom and Trump have identified corporate homebuying as a political issue, indicating a rare convergence between the two political figures [3] Institutional Investor Impact - Approximately 3% of California's single-family homes are owned by large landlords, with Invitation Homes being the largest owner [5] - In contrast, large institutional landlords own less than 1% of the total U.S. single-family housing inventory [5] - Following Trump's announcement, shares of single-family landlords dropped by as much as 10%, but analysts suggest this dip may present a buying opportunity [6] Legislative Context - A bill aimed at banning large single-family residential property owners from acquiring more homes was previously approved by the state assembly but stalled in the state Senate due to opposition [7] - Assemblymember Alex Lee, who authored the bill, believes that having the governor's support will be crucial for its revival [8] - State Senator Scott Wiener supports legislation targeting corporate landlords but is cautious about policies that could hinder housing production [9] Housing Market Dynamics - California has seen a rise in institutional buyers of single-family rental homes since the 2008 financial crisis, although the largest landlords have focused on more affordable markets in the Sun Belt states [4] - Newsom is also considering a presidential run and has faced challenges in addressing housing affordability as California home prices exceed $800,000 [9]