City Council Launches Study on Corporate Homebuying Impact

Los Angeles officials are taking a closer look at whether deep-pocketed investors are shutting out would-be homeowners.

The Los Angeles City Council voted last week to study how large institutional buyers, including investment firms and property management companies, are reshaping the city’s housing market and potentially squeezing out individual buyers, LAist reported. The new Housing Department study approved will seek to determine the effects of institutional investors on tenants, homeowners and small landlords.

The vote follows a Los Angeles Housing Department report released in October that found large landlords steadily expanding their share of the city’s housing stock between 2018 and 2023. The study raised concerns that rapid acquisitions by large organizations may be contributing to displacement and limiting opportunities for first-time homebuyers.

Council member Monica Rodriguez, who pushed for both the earlier report and the new study, warned at the Wednesday meeting that the “mass consolidation and monopolization” of housing by large investors is pushing homeownership further out of reach for young adults and families, according to LAist.

The housing department’s October analysis found that the biggest ownership shift was in two- to four-unit buildings, which are properties traditionally associated with mom-and-pop landlords. Large organizations increased their share of those buildings by 29 percent over the six-year study period.

Single-family homes are also increasingly being snapped up by corporate buyers. More than one in five of those properties sold in Los Angeles during the period went to organizations rather than individual buyers, according to the report. Both President Donald Trump and Gov. Gavin Newsom have proposed regulating housing purchases by institutional investors.

Three major operators cited in the report have faced legal scrutiny.

K3 Holdings, identified as the fastest-growing property owner in the study, agreed to pay $2.2 million in 2023 to settle allegations it targeted longtime Latino tenants for displacement in Koreatown and Highland Park. Wedgewood Homes paid $3.5 million in 2021 to resolve claims that it harassed and evicted tenants before flipping homes. Invitation Homes, one of the country’s largest single-family rental operators, paid $3.7 million to settle claims tied to illegal rent increases at roughly 1,900 California homes.

City Council President Marqueece Harris-Dawson said that when he took office in 2015, corporations were buying eight out of every 10 homes listed in parts of South Los Angeles, crowding out working-class buyers in neighborhoods once considered affordable.

The new study aims to measure how those buying patterns are affecting tenants, small landlords and aspiring homeowners and determine whether the city should intervene.

— Chris Malone Méndez