California Assembly discusses AB 1240 to restrict corporate home purchases

In a recent meeting of the California Assembly Judiciary Committee, lawmakers discussed Assembly Bill 1240, a proposed measure aimed at addressing the state's ongoing housing crisis. The bill seeks to limit large corporations from purchasing additional single-family homes, particularly those owning over 1,000 properties, to help preserve the dwindling stock of homes available for working families.

California is grappling with a severe housing shortage, with current construction rates falling far short of the estimated need of 300,000 new homes per year. Presently, the state is only managing to build around 100,000 homes annually, leading to skyrocketing prices that have made homeownership unattainable for many. A recent report indicated that only 15% of Californians can afford to buy a home at current prices, with the median home price in some districts exceeding $1.5 million.

Proponents of AB 1240 argue that large investment firms, such as Invitation Homes, are exacerbating the housing crisis by purchasing single-family homes and converting them into rental properties, thereby reducing the availability of homes for sale. They contend that this practice disproportionately affects first-time homebuyers and working families, who struggle to compete against corporate buyers with substantial financial resources.

Supporters of the bill, including representatives from the AIDS Healthcare Foundation, emphasized the need to ensure housing remains affordable for low-income Californians. They highlighted that many individuals are already spending a significant portion of their income on housing, with some facing severe housing burdens.

However, the bill faced opposition from representatives of the National Rental Home Council and other industry stakeholders, who argued that the concerns raised about corporate ownership are overstated. They pointed out that the companies targeted by the bill collectively own only a small fraction of the total single-family homes in California and have been net sellers in the market for years. Critics of the bill also expressed concerns that it could inadvertently limit the availability of rental homes, particularly for families who cannot afford to buy.

The discussion highlighted a broader debate about the balance between corporate investment in housing and the need for affordable homeownership opportunities. As California continues to navigate its housing crisis, the outcomes of bills like AB 1240 will be crucial in shaping the future landscape of housing availability and affordability in the state. The committee ultimately voted to advance the bill to the appropriations committee, signaling ongoing legislative efforts to tackle the pressing issue of housing in California.