“People live in homes, not corporations.” 

That didn’t come from a leftist on the campaign trail but from President Donald Trump. 

Between defending the killing of Renee Nicole Good and disparaging the anti-ICE protests in Minneapolis, the president announced Wednesday (opens in new tab) on Truth Social that he was “immediately taking steps to ban large institutional investors from buying more single-family homes.” He called on Congress to codify the policy without details about how it would be implemented or whom it would affect. 

“[The] American Dream is increasingly out of reach for far too many people, especially younger Americans,” the president wrote.

Republicans were quick to cheer the announcement (opens in new tab), but the news caught Democrats in California flat-footed. A day after the president’s declaration, Gov. Gavin Newsom followed suit during his final State of the State address, imploring lawmakers to “tackle” the “urgent” issue.

“These investors are crushing the dream of homeownership and forcing rents too damn high for everybody else,” Newsom said. “I think it’s shameful that we allow private equity firms in Manhattan to become some of the biggest landlords here in our cities in California.”

It was a whirlwind reversal for state Assemblymember Alex Lee of San Jose, who has spent the last two years trying to get a corporate landlord ban passed, only to be blocked by lobbyists and his colleagues in the Democrat-controlled Legislature. 

The two bills introduced by the self-described Democratic Socialist aimed to prevent any company that owns more than 1,000 single-family homes from purchasing more properties and converting them into rentals. Neither bill passed the state Senate. 

Lee said he is in early discussions with the governor’s team about next steps after Thursday’s speech. Newsom said he understood that efforts were already under way to codify the ban, adding that reining in “monopolistic behavior” would require more oversight, enforcement, and tax-code changes.

“His approach sounds different from mine,” Lee told The Standard. “I’m not worried about the methodology as long as we land on the same outcome.” 

Lee said his party’s about-face — and the unlikely alignment of Trump, Newsom, and himself — proves just how potent the topic has always been. If anything, Trump’s public leadership on the issue should serve as a wake-up call for Democrats.

“The populist and morally correct position cannot be ceded to the right,” Lee said. “Most Americans have a healthy skepticism toward unchecked greed. If we don’t stand up to price gouging and fucked-up housing practices in a state where half of the people are renters, then we are really out of touch.” 

Corporate homebuyers such as Invitation Homes, a publicly traded real estate investment trust (whose stock took a slight dip (opens in new tab) after the president’s announcement), bought more than 10,000 houses in California when the subprime mortgage crisis led to a wave of foreclosures, according to an analysis (opens in new tab) by residential appraiser Ryan Lundquist. 

In 2024, the Dallas-based company agreed to pay $3.72 million in civil penalties and refunds to resolve allegations that it illegally raised rent on hundreds of homes. Critics argue that investors like Invitation Homes have exacerbated the state’s housing crisis by hoarding supply. The company did not respond to requests for comment. 

Observers who have opposed the ban on corporate landlords paint it as a misguided attempt (opens in new tab) to address the issue of housing affordability, arguing that increasing supply is a much more effective way to make homes cheaper. 

“This topic has hit a nerve with consumers, but it’s still largely disconnected from the housing market,” Lundquist said. “If politicians aren’t doing anything else to promote housing affordability, then this just gives off the appearance of doing something.” 

A 2023 study by Freddie Mac found that large investors in the single-family-home rental business likely own less than 4% (opens in new tab) of the country’s total housing stock. But a 2024 study by the U.S. Government Accountability Office identified Atlanta, Jacksonville, Florida, and other markets where the share was as large as 25% (opens in new tab).

California’s high home prices have limited the mass buyout of properties by institutional investors. There are only three companies that own more than 1,000 single-family homes in the state, according to the State Library’s California Research Bureau (opens in new tab).

Still, Lundquist believes the issue is worth addressing on its own merit. “Investment funds might not be active in the single-family market today, but what happens in the next 50 to 100 years if they keep buying 1% more?” he asked.

When Lee’s ban was first floated in 2024, the National Rental Home Council slammed the legislation as an “attack” on housing providers. This time, with Trump making the call, the organization, which advocates for landlords of single-family homes, took a more measured tone. 

“We appreciate the administration’s focus on ensuring Americans have access to a diverse mix of housing options,” said an NRHC spokesperson. “We look forward to engaging the White House and other policymakers in this important discussion.”

Correction: A previous version of this story misstated the amount of companies that own more than 1,000 single-family homes in California.