DATE:
July 16, 2024
17
TO:
Board of Supervisors
SUBJECT
Title
FIGHTING BACK AGAINST CORPORATE HOMEBUYERS AND WALL STREET LANDLORDS (DISTRICTS: ALL)
Body
OVERVIEW
In recent years, an alarming trend has emerged where large corporations and Wall Street investors are increasingly buying up residential homes, driving up prices and exacerbating the housing affordability crisis. This practice not only puts homeownership out of reach for many aspiring buyers but also undermines the stability and diversity of communities. As corporations outbid individuals and small mom-and-pop landlords, the dream of owning a home becomes increasingly elusive, leading to higher rents and displacement of long-time residents.
The housing in our neighborhoods should be homes for people, not profit centers for Wall Street hedge funds. Yet, San Diego is ground zero for a growing trend of giant financial corporations buying up housing and driving up rent and home process.
This trend has sharply accelerated since the pandemic when low-interest rates fueled a Wall Street frenzy, with private equity giants buying up homes and apartment buildings to squeeze for profit, leaving tenants and local communities left to pay the price. According to the Federal Trade Commission, rental prices are up nearly 20% since 2020, with the largest increases among low-to-middle tier apartments rented by lower-income residents. Rising shelter costs are responsible for two-thirds of the inflation pressure that is driving up the cost of living. This is due, in part, to the increasing use of algorithms by corporate landlords to unfairly set rental prices.
Corporations Limiting Homeownership Opportunities
Investor home sales hit an all-time high in the fourth quarter of 2023, with 35.2% of California homes being sold directly to institutional investors, more than any other State is the Country. This alarming trend is projected to increase with institutional investors forecasting a 10-fold increase in cor...
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