Gavin Newsom, Donald Trump Agree on Corporate Homebuying

Gov. Gavin Newsom is taking aim at institutional investors making purchases in the residential market.

Following a similar announcement by President Donald Trump, Newsom is planning to work with local legislators to prevent private equity and hedge fund investors and other corporate entities from purchasing homes in California, the Mercury News reported, citing communications with the governor’s office.

“The fact is that large investors are purchasing homes faster than families can buy them,” the governor’s office said. “The governor believes that working families shouldn’t be competing with large, well-capitalized investors.”

Newsom shared his approach in his State of the State address on Thursday.

“There is another urgent area requiring our attention. That’s institutional investors snatching up homes by the hundreds and thousands at a time, crushing the dream of home ownership, and forcing rents too damn high for everyone else. It’s shameful that we allow private equity firms in Manhattan to become the biggest landlords in many of our cities,” Newsom said.

“Over the next few weeks, we will work with the Legislature to combat this monopolistic behavior, strengthen accountability, and level the playing field for working families. That means more oversight and enforcement, and potentially changing the state tax code to make this work,” he said.

About 3 percent of single-family homes in California are owned by large landlords; publicly traded Invitation Homes is the largest owner, according to a 2024 study by the California Research Bureau cited by the Mercury News. Large institutional landlords own less than 1 percent of total U.S. single-family housing inventory, JPMorgan Chase & Company analysts said in a statement this week, per the Mercury News.

After Trump announced his intentions to take on institutional investors in residential real estate, stock share prices of single-family landlords fell by as much as 10 percent, according to the Mercury News. “At the risk of whistling past the graveyard, we could argue that the dip in the stocks presents a buying opportunity,” JPMorgan analysts said in their report.

Newsom’s announcement is already being well received in the state legislature. Last year, the state assembly approved a bill that would ban large single-family residential property owners from buying and leasing more homes. The measure ended up stalling in the state Senate amid opposition from real estate agents and the California Apartment Association.

“Having the governor’s backing and support is going to be crucial and very helpful,” Assemblymember Alex Lee, who authored that bill, said, vowing to pursue it again this year. Newsom has not endorsed a specific proposal.

State Senator Scott Wiener also supports legislation targeting corporate landlords but shies away from policies that could choke housing production. “There’s been a desire to do something about the gobbling up of single-family homes by institutional investors for a long time,” he said. “It is an issue that we need to deal with.”

— Chris Malone Méndez