How California Plans to Slow the Corporate Takeover of the Residential Market
Oscar Perry Abello writes to summarize the shifting status of the real estate market—from private ownership by individuals to corporate ownership by Wall Street money—and to detail efforts to control the trend in California.
For a succinct description, with the key evidence, of the scope of the trend, Abello writes:
Before 2010, corporate landlords didn’t exist in the single-family market; by March of this year, Wall Street had acquired $60 billion worth of distressed or foreclosed properties across the country, representing hundreds of thousands of homes.
Most of those properties became rentals. Between 2006 and 2012, the number of owner-occupied housing units in California declined by more than 320,000, while the number of renter-occupied housing units increased by more than 720,000, according to the Public Policy Institute of California. In 2006, only 21 percent of occupied single-family houses in California were rented; by 2012, the share of houses occupied by renters had increased to 26.0 percent.
The disruption of the COVID-19 pandemic and the resulting economic downturn are expected to exacerbate the trend, according to a widely circulated article by Ryan Dezember, published by the Wall Street Journal in September. Also widely circulated: the nascent efforts by a few politicians to add regulatory controls to slow large corporate interests from buying up all the distressed properties in the market.
Enter SB 1079, a law recently adopted by the state of California, which makes it harder for big-money investors to buy foreclose properties en masse. Exactly how the law accomplishes that goal—by preventing bulk foreclosure sales and for holding lenders responsible for the upkeep of foreclosed properties—is the focus of Abello's article.