Bill To Ban Corporate-Owned Single-Family Home Rentals Passes Assembly

Corporate landlords are snatching homeownership opportunities away from working families. By purchasing entire neighborhoods of single-family homes, Wall Street-backed corporations are reaping rental profits and denying everyday Californians the chance to buy a starter home. Recently, firms are even targeting neighborhoods ravaged by the Los Angeles fires with all-cash offers. 

AB 1240, authored by Assemblymember Alex Lee, aims to protect California’s limited supply of single-family homes and ensure that people have a path towards homeownership. The bill will prevent institutional investors that own more than 1,000 single-family homes from purchasing additional properties and converting them into rentals. AB 1240 passed the Assembly Floor on June 3, 2025. 

“Mega corporations are targeting homes for first-time homebuyers,” said Assemblymember Lee. “They’re buying up our limited supply of homes and capitalizing on rising rents. The deep pockets of Wall Street are depriving the working people of homeownership opportunities. AB 1240 will give homebuyers a fairer playing field and empower everyday Californians to build the generational wealth that homeownership can provide.”

Metro regions that were previously more affordable for first-time homebuyers are now the targets of wealthy Wall Street firms seeking to take advantage of chronic housing shortages. Further, these investors are buying smaller and lower cost homes that would traditionally be available for first-time homebuyers. In California, one real estate firm alone — Invitation Homes — owns thousands of homes in California — properties that are concentrated in metros like Sacramento, Stockton, the San Fernando and San Gabriel valleys as well as the Inland Empire. 

In the wake of the 2007-2009 financial crisis, institutional investors began amassing their portfolios of single-family homes and converting them into rentals. During the pandemic, they continued to expand their portfolios amid low interest rates and growing real estate prices. Without the vast wealth of corporate investors, everyday people are outmatched by financial firms’ all cash offers. 

Given the sky-high housing prices, homeownership rates statewide have declined over the years. Roughly 55% of California homes were owned by their occupants in 2022, down from a high of about 60% in 2006 at the peak of the housing bubble. As for Californians aged 35 to 45, the decline was even greater as homeownership rate declined from about 49% to nearly 40% between 2000 to 2021. 

“The American dream of owning a home is out of reach for far too many. Everyone should have an opportunity to achieve that dream,” said Assemblymember Lee. “Homes are meant for people—not for corporations —and I’ll keep fighting to ensure housing security for all Californians.”