Gavin Newsom calls for California to limit home buying by large investors
Gov. Gavin Newsom on Thursday blamed major investment companies for snatching homeownership opportunities and driving up rents in California and called on the Legislature to limit the practice.
“I just humbly submit, I think its shameful that we allow private equity firms in Manhattan to become some of the biggest landlords here in our cities in California,” he said during his State of the State speech.
Newsom added he would work with legislators to combat what he called “monopolistic behavior, and strengthen accountability, level the playing field for working families” through more oversight, enforcement and potentially changing the state’s tax code.
The proposal targets a practice by which large investment firms scoop up and rent out large numbers of homes, which critics say drives up prices and makes it harder for new buyers to purchase houses. The strategy took hold following the economic turmoil caused by the Great Recession, when huge numbers of foreclosed and cheap homes were available across the country.
Currently, however, major investment companies own only a small portion of homes across the state, raising questions about how much of an impact limiting their ownership would have on home affordability.
In California, roughly 3% of single-family homes are owned by holders of at least 10 properties, according to the California Research Bureau.
Invitation Homes, a publicly traded company, is the largest homeowner in the state with more than 10,700 houses, the agency found. Its largest numbers of properties are in Los Angeles, Riverside and Sacramento counties. It started buying up hundreds of homes in the capital region in 2012, The Sacramento Bee previously reported.
A company representative did not immediately respond to a request for comment on Newsom’s remarks.
State Sen. Jesse Arreguín, D-Berkeley, the incoming chair of the Senate Housing Committee, said after the governor’s speech that he welcomed and strongly supported any effort to deal with corporate ownership of housing “because it is making our state unaffordable.”
At least one bill is currently pending in the Legislature that could place the limits on investor ownership that Newsom is looking for.
Assembly Bill 1240, introduced last February by Assemblymember Alex Lee, D-San Jose, would prohibit corporations that own more than 1,000 single-family homes from buying and then leasing any more properties. A company that does could be sued by the Attorney General’s Office, face fines and be ordered to sell the property, under the measure.
That would apply to at least four companies, according to data from the California Research Bureau. The bill passed the Assembly and is currently in the Senate.
State apartment and Realtors associations have come out against the bill along with the National Rental Home Council, which argued the measure was seeking to legislate an issue that wasn’t borne out in actual statistics.
Newsom’s suggestion is a rare moment of agreement with President Donald Trump, coming on the heels of a social media post from the president Wednesday that he was planning to immediately take steps “to ban large institutional investors from buying more single-family homes and I will be calling on Congress to codify it.”
Like California, major investors are estimated to own a fraction of the nation’s homes. The Urban Land Institute, a Washington, D.C.-based research organization, said in a 2021 report that large investment companies owned less than 3% of all single-family rental homes in the United States.
Trump said he would provide more details on his proposal in a speech in Davos, Switzerland later this month.
After the governor’s speech Thursday, Lee said he was glad the issue was being recognized both by Newsom and Trump.
“Now having some of the most prominent political leaders and voices in the fray,” he said, “is going to help us a lot.”
The Bee’s Lia Russell contributed to this story.
This story was originally published January 8, 2026 at 11:26 AM with the headline "Gavin Newsom calls for California to limit home buying by large investors."
