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California Targets Corporate Homeownership to Boost Housing access
California Governor Gavin Newsom is seeking to curb teh growing trend of institutional investors purchasing single-family homes, aiming to increase homeownership opportunities for residents and alleviate pressure on rental costs.The initiative, which aligns wiht a similar, though currently stalled, effort by former President Donald Trump, focuses on limiting the ability of large corporations to amass housing stock for rental purposes.
The Problem: Institutional Investors in the housing Market
The rise of institutional investors – including hedge funds and private equity groups – buying up large numbers of homes has become a significant concern in recent years. These entities frequently enough purchase hundreds or even thousands of properties, converting them into rental units. Critics argue this practice reduces the availability of homes for prospective buyers, drives up prices, and exacerbates the housing affordability crisis.
“It’s shameful that we allow private equity firms in Manhattan to become some of the biggest landlords in many of our cities,” Newsom stated, adding that the practice hinders homeownership and increases rents for Californians.
