California Realtors Propose Legislation to Prevent Bulk Home Sales by Large Firms

Presently titled “Prohibition of Government Sponsored Entity Bulk Sales,” the realtor sponsored legislation seeks to stop the unprecedented shift in the ownership of houses, from homeowners to mega-corporate investors and from “mom and pop landlords” to Wall Street landlords. In the post foreclosure-crisis landscape, Wall Street has provided private equity firms with foundation that has established a new kind of rental housing market — one that harms vulnerable renters and communities in unprecedented ways. By prohibiting “bulk sales”, especially in high-cost areas, our states working families would again have an opportunity to be able to purchase REO properties. The states working-class families and communities of color deserve to once again have the ability to build wealth and gain stability within the communities in which they live.

During a recent Board of Director meeting, the following motion was approved by the California Association of Realtors:

“The California Association of Realtors will “SPONSOR” legislation in 2022 to: (a) Conform to federal regulations, and provide owner-occupants and public entities with an opportunity to purchase Government Sponsored Entity (GSE) backed REO properties for 30 days (e.g. federal “First Look” program); (b) Require lenders to receive and provide written acknowledgment of all offers during that 20 day period to the potential owner-occupant purchaser and public entities; (c) Require financial institutions to respond to offers made pursuant to the “First Look” program prior to considering any offer from investor purchasers; and, (d) Prohibit a GSE from conducting “bulk sales” in California.”

The legislation is being co-sponsored by Habitat for Humanity and the California Building Industry Association in addition to the California Association of Realtors.  The co-sponsors are requesting that the State of California allocate a minimum 20% of total state housing funding to the production of owner-occupied, deed-restricted affordable homes for lower income Californians.