By Iris Craige, Assistant Director of Policy and Advocacy
June 25, 2025
Large corporate landlords are reshaping California’s housing market by acquiring thousands of single-family homes and converting them into vehicles for profit. These firms, often backed by private equity or hedge funds, treat housing as a financial asset, not as shelter, and not as community infrastructure. The result is predictable: rising rents, higher eviction rates, deteriorating property conditions, and the extraction of wealth from low-income communities.
California State Assembly Member Alex Lee and State Senator Sasha Pérez have put forward AB 1240, which would restrict corporate landlords from owning more than 1,000 single-family homes.
While SAJE appreciates the effort behind motion, we do not think it goes far enough.
At SAJE, we’re closely tracking trends in corporate home ownership in Los Angeles. In the wake of the January 2025 Eaton Fire in Altadena, we documented a striking surge in corporate acquisitions. Between February and May 2025, nearly 47% of all post-fire home sales went to LLCs or corporations—compare that to just 5% during the same period the year prior. Many of these buyers are based outside the region, acquiring properties in moments of crisis to expand their holdings.
This pattern isn’t limited to one neighborhood. It reflects a broader shift happening across California, one that demands coordinated state and local policy responses.
At the city level, we’re encouraged that Los Angeles is beginning to act. On May 13, SAJE submitted a letter in strong support of Council Motion 24-1586, which directs city staff to report on the extent of corporate ownership in Los Angeles and explore taxation strategies targeting large-scale owners of single-family homes.
But we want to see these strategies at the state level, too. That’s why we think AB 1240 should go further. To be effective, the legislation should incorporate the following:
1. Lower the Ownership Threshold
The current threshold of 1,000 homes is too high and will exempt many institutional investors. We recommend lowering the cap to 100 homes, which more accurately reflects the scale at which corporate ownership begins to distort neighborhood conditions and pricing.
2. Require Beneficial Ownership Disclosure
To prevent the use of shell entities and affiliated LLCs to evade limits, AB 1240 must require all buyers to disclose true beneficial ownership, controlling interests, and affiliations at the time of purchase.
3. Mandate Annual Public Reporting
Enforcement requires transparency. The Office of the Attorney General of California or another designated agency should be tasked with publishing annual reports detailing the number of homes held by corporate owners, the number of civil actions filed, and enforcement outcomes.
4. Adopt a Progressive Gross Receipts Tax
A tiered tax on rental income would disincentivize portfolio growth and generate revenue to support affordable housing and tenant protections.
5. Create an Out-of-State Transaction Fee
Investors based outside California should be required to pay a fee when acquiring housing in the state. This policy would limit speculative activity and ensure external actors contribute to the communities they affect.
If lawmakers incorporate these amendments into AB 1240, the legislation will be a strong model for how other states can limit speculation and rebalance the market in favor of long-term residents, tenants, and working families.
