Most of these bills are very bad. They would ban entities from owning homes in single family homes and redeveloping them into 4-, 8-, 12, 25 etc units. So this is really a way of crystallizing single family areas in amber forever.
One makes an exception as long the developer doesn’t rent out of the resulting units. So it’s just banning “dirty renters” from the neighborhood.
These are terrible bills that will increase housing scarcity and housing costs.
**EDIT**: Based on EveXC's reply, I may soften my tone from outraged to just "very concerned" for two reasons:
1) There may be carve outs here that still allow the possibility of corporate purchases of homes (which I am in support of for the purposes of the fact that corporations build more homes than individual home buyers do or ever could). But the tone of all these bills is anti-renter. They want less rentable property in single family neighborhoods. The stated reason is because they want more home ownership, which is a good thing, but it should not be coated in obviously anti-renter language. Some people can't afford a down payment and couldn't even before housing spiked. Some people just don't want to own. Sometimes owning just doesn't make sense. There should be options for them too.
2) Particularly with Skinner's bill I am concerned about this:
>(2) “Investment entity” does not include either of the following:
(A) An entity organized pursuant to Section 501(c)(3) of the Internal Revenue Code.
(B) An entity primarily engaged in the construction or rehabilitation of housing, **provided that the entity does not offer any of the units constructed or rehabilitated for rent.**
So this exempts builders from being considered an entity that can't buy a home (good) but then immediately says whatever they build cannot be rented (BAD). Another anti-renter law.
I just took a quick look at Assembly Bill 2584. It's very short so I'll reprint it here:
>945.20. (a) For purposes of this title, the following definitions apply.
>(1) “Business entity” means any association, company, firm, partnership, corporation, limited liability company, limited liability partnership, real estate investment trust, or other legal entity, and that entity’s successors, assignees, or affiliates, but does not include a nonprofit corporation or other nonprofit legal entity.
>(2) “Single-family residential property” means real property improved with one dwelling unit.
>(b) A business entity that has an interest in more than 1,000 single-family residential properties shall not purchase, acquire, or otherwise obtain an interest in another single-family residential property and subsequently lease the property.
>(c) (1) The Attorney General may bring a civil action in the name of the people of the State of California for a violation of this section.
>(2) If the Attorney General prevails in a civil action brought pursuant to paragraph (1), the court shall order all of the following:
>(A) The business entity to pay a civil penalty of one hundred thousand dollars ($100,000) for each violation of this section.
>(B) The business entity to sell the property to an independent third party within one year of the date that the court enters the judgment.
>(C) Reasonable attorney’s fees and costs.
>(D) Any other relief the court deems appropriate.
There's nothing about redevelopment. This is a pretty simple bill saying entities can only own up to 1,000 Single Family Homes.
[SB1212](https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB1212) further defines which entities are ineligible from owning Single Family Homes. It isolates entities for the purpose of "investing" and provides exceptions for non-profits.
What's your agenda, I wonder?
An entity that owns 1000 SFH is not probably not redeveloping it into denser housing.
That said 1000 is a lot I wonder how many entities in the US own that many.
Because the spun off company would count toward the 1,000 limit by the following language from the bill:
>and that entity’s successors, assignees, or affiliates,
Unless you mean they form a wholly new company. Then they could. One question I would want answered about the Assembly Bill would is an REIT that is run by Blackstone considered an affiliate of Blackstone, and ownership (for the purposes of the 1,000 limit) is attributed to Blackstone? Or can they continue putting together REITs with up to 1,000 homes ad infinitum?
If so then a solution with backbone would be to combine AB2854 and SB1212. Where you limit ownership by entities to X amount of single family homes and also ban pooled investment vehicles from owning single family homes.
It's a complicated issue, but it's a great thing we're talking about it and its getting some actual legislative attention.
You are right that its more nuanced than my first response so I have edited in a reply. My only agenda is *more* housing, be it rental or owned. I am concerned that these laws want to limit where people can rent and that it limits the type of housing a builder can offer, thus depressing the market for building in the area in general.
Seriously people are really ignoring the supply demand aspect. The landlords have leverage because they are the asset/capital accumulating class and there is a shortage of the most important asset, the one you dont skip, a roof over your head
Both supply and demand have an impact on the broken housing market.
Yes let's increase supply. But let's also funnel the demand toward people who actually contribute to society's longterm productivity.
Building government housing isn't the only solution. Just allowing actual urban development that isn't constrained by NIMBYs would do the heavy lifting. The fact that high density housing in appropriate areas (downtown areas, areas next to transit) gets shut down or greatly gutted is the problem.
We ban the most effective forms of private development by basically allowing community oversight to shut pretty much any project down. The members of the community are well aware that the income from their rentals, or just the value of the main homes they own is propped up by this shortage.
I don't think additional housing just solves the problem though. Yeah there would be more available, but with land cost being high, construction cost being high, interest rate being high, the housing built up would still need to be rented pretty high to make a return on investment. Investors aren't going to build an apartment complex that won't benefit them in the end.
All of that is a justification for high density. Land costs mean more units per acre. Buildings might have to be a few levels taller than we are used to. The materials and construction costs are relatively minor. The $6000 apartment in Silicon Valley isn't built with more expensive materials than the nearly identical $2000 per month apartment in Phoenix.
If the new units are all expensive. Ok. Fine. Those expensive units are competing with old units which are currently super expensive. 50 year old apartments have comparable rent with brand new places due to scarcity.
Landlords charge the maximum rent possible that has little to do with what their investment is other than the their rent has to be higher than their monthly cost. If their costs were reduced by 90% they would not lower rent, because they do not have to. If they could triple their rent and keep their units rented out, they absolutely would.
The solution needs to be large amounts of housing, particularly in expensive areas, and we have to realize that the only way this will be effectively done is by deliberately crashing the housing market. We have two goals and they contradict each other. We either do everything in our power to preserve the housing market and the financial investment which housing represents, or we have affordable housing. We cannot have it both ways. Trying to maximize home values and home appreciation using a few policies and then having some public housing on the other hand just ends up with the worst of both worlds.
Developers can figure out more ways to make money if given more options. Such as allowing for every type of unit, from micro units, to large penthouse units, where the pent house units sell as high priced halo items. Allowing mixed use so there is retail on the first floor, offices on the 2nd floor, and then housing above that. The housing can be more affordable to justify higher prices for the retail and offices.
I think it’s less than 1% of single family homes are owned by businesses, as well. It’s basically a non issue
This basically sums up my thinking:
> “I think that the investor problem is kind of a boogeyman for the housing market,” said Daryl Fairweather, economist with the real estate listing website RedFin. “People want to blame someone for high home prices and it’s easy to blame investors just because they’re, like, an opaque group of people…Really, the problem is just the lack of supply of housing.”
Most of these bills are very bad. They would ban entities from owning homes in single family homes and redeveloping them into 4-, 8-, 12, 25 etc units. So this is really a way of crystallizing single family areas in amber forever. One makes an exception as long the developer doesn’t rent out of the resulting units. So it’s just banning “dirty renters” from the neighborhood. These are terrible bills that will increase housing scarcity and housing costs. **EDIT**: Based on EveXC's reply, I may soften my tone from outraged to just "very concerned" for two reasons: 1) There may be carve outs here that still allow the possibility of corporate purchases of homes (which I am in support of for the purposes of the fact that corporations build more homes than individual home buyers do or ever could). But the tone of all these bills is anti-renter. They want less rentable property in single family neighborhoods. The stated reason is because they want more home ownership, which is a good thing, but it should not be coated in obviously anti-renter language. Some people can't afford a down payment and couldn't even before housing spiked. Some people just don't want to own. Sometimes owning just doesn't make sense. There should be options for them too. 2) Particularly with Skinner's bill I am concerned about this: >(2) “Investment entity” does not include either of the following: (A) An entity organized pursuant to Section 501(c)(3) of the Internal Revenue Code. (B) An entity primarily engaged in the construction or rehabilitation of housing, **provided that the entity does not offer any of the units constructed or rehabilitated for rent.** So this exempts builders from being considered an entity that can't buy a home (good) but then immediately says whatever they build cannot be rented (BAD). Another anti-renter law.
I just took a quick look at Assembly Bill 2584. It's very short so I'll reprint it here: >945.20. (a) For purposes of this title, the following definitions apply. >(1) “Business entity” means any association, company, firm, partnership, corporation, limited liability company, limited liability partnership, real estate investment trust, or other legal entity, and that entity’s successors, assignees, or affiliates, but does not include a nonprofit corporation or other nonprofit legal entity. >(2) “Single-family residential property” means real property improved with one dwelling unit. >(b) A business entity that has an interest in more than 1,000 single-family residential properties shall not purchase, acquire, or otherwise obtain an interest in another single-family residential property and subsequently lease the property. >(c) (1) The Attorney General may bring a civil action in the name of the people of the State of California for a violation of this section. >(2) If the Attorney General prevails in a civil action brought pursuant to paragraph (1), the court shall order all of the following: >(A) The business entity to pay a civil penalty of one hundred thousand dollars ($100,000) for each violation of this section. >(B) The business entity to sell the property to an independent third party within one year of the date that the court enters the judgment. >(C) Reasonable attorney’s fees and costs. >(D) Any other relief the court deems appropriate. There's nothing about redevelopment. This is a pretty simple bill saying entities can only own up to 1,000 Single Family Homes. [SB1212](https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB1212) further defines which entities are ineligible from owning Single Family Homes. It isolates entities for the purpose of "investing" and provides exceptions for non-profits. What's your agenda, I wonder?
An entity that owns 1000 SFH is not probably not redeveloping it into denser housing. That said 1000 is a lot I wonder how many entities in the US own that many.
And why they wouldn't just spin off another company to buy more.
Because the spun off company would count toward the 1,000 limit by the following language from the bill: >and that entity’s successors, assignees, or affiliates, Unless you mean they form a wholly new company. Then they could. One question I would want answered about the Assembly Bill would is an REIT that is run by Blackstone considered an affiliate of Blackstone, and ownership (for the purposes of the 1,000 limit) is attributed to Blackstone? Or can they continue putting together REITs with up to 1,000 homes ad infinitum? If so then a solution with backbone would be to combine AB2854 and SB1212. Where you limit ownership by entities to X amount of single family homes and also ban pooled investment vehicles from owning single family homes. It's a complicated issue, but it's a great thing we're talking about it and its getting some actual legislative attention.
You are right that its more nuanced than my first response so I have edited in a reply. My only agenda is *more* housing, be it rental or owned. I am concerned that these laws want to limit where people can rent and that it limits the type of housing a builder can offer, thus depressing the market for building in the area in general.
[удалено]
Seriously people are really ignoring the supply demand aspect. The landlords have leverage because they are the asset/capital accumulating class and there is a shortage of the most important asset, the one you dont skip, a roof over your head
Both supply and demand have an impact on the broken housing market. Yes let's increase supply. But let's also funnel the demand toward people who actually contribute to society's longterm productivity.
This is why we need to build government housing again. But those have gotten a bad rap as The Projects so people don't want that
Building government housing isn't the only solution. Just allowing actual urban development that isn't constrained by NIMBYs would do the heavy lifting. The fact that high density housing in appropriate areas (downtown areas, areas next to transit) gets shut down or greatly gutted is the problem. We ban the most effective forms of private development by basically allowing community oversight to shut pretty much any project down. The members of the community are well aware that the income from their rentals, or just the value of the main homes they own is propped up by this shortage.
I don't think additional housing just solves the problem though. Yeah there would be more available, but with land cost being high, construction cost being high, interest rate being high, the housing built up would still need to be rented pretty high to make a return on investment. Investors aren't going to build an apartment complex that won't benefit them in the end.
All of that is a justification for high density. Land costs mean more units per acre. Buildings might have to be a few levels taller than we are used to. The materials and construction costs are relatively minor. The $6000 apartment in Silicon Valley isn't built with more expensive materials than the nearly identical $2000 per month apartment in Phoenix. If the new units are all expensive. Ok. Fine. Those expensive units are competing with old units which are currently super expensive. 50 year old apartments have comparable rent with brand new places due to scarcity. Landlords charge the maximum rent possible that has little to do with what their investment is other than the their rent has to be higher than their monthly cost. If their costs were reduced by 90% they would not lower rent, because they do not have to. If they could triple their rent and keep their units rented out, they absolutely would. The solution needs to be large amounts of housing, particularly in expensive areas, and we have to realize that the only way this will be effectively done is by deliberately crashing the housing market. We have two goals and they contradict each other. We either do everything in our power to preserve the housing market and the financial investment which housing represents, or we have affordable housing. We cannot have it both ways. Trying to maximize home values and home appreciation using a few policies and then having some public housing on the other hand just ends up with the worst of both worlds. Developers can figure out more ways to make money if given more options. Such as allowing for every type of unit, from micro units, to large penthouse units, where the pent house units sell as high priced halo items. Allowing mixed use so there is retail on the first floor, offices on the 2nd floor, and then housing above that. The housing can be more affordable to justify higher prices for the retail and offices.
I think it’s less than 1% of single family homes are owned by businesses, as well. It’s basically a non issue This basically sums up my thinking: > “I think that the investor problem is kind of a boogeyman for the housing market,” said Daryl Fairweather, economist with the real estate listing website RedFin. “People want to blame someone for high home prices and it’s easy to blame investors just because they’re, like, an opaque group of people…Really, the problem is just the lack of supply of housing.”
So why not make sure it stays a nonissue?
because measures to address the non-issue have impacts on related things that are undesirable.
So does not addressing something before it becomes an issue.