New Federal Bill Could Limit Big Investors From Buying Houses — What It Means for San Diego Property Owners

A new federal housing bill called the 21st Century ROAD to Housing Act could limit how many single-family homes large corporate investors can buy. The bill would restrict companies that own 350 or more houses from purchasing additional homes. These companies could keep the homes they already own, but they would be limited from expanding their portfolios by buying more houses. Some exceptions would exist, such as homes that need major renovations or homes built specifically as rentals. However, those properties would generally need to be sold to individual buyers within seven years. The bill recently passed the U.S. Senate with strong bipartisan support and is designed to make it easier for families to buy homes.

Large corporate landlords do exist, with some companies owning tens of thousands of single-family homes across the United States. However, institutional investors still control less than 1% of all single-family homes nationwide, according to housing economists. Even if these companies were forced to sell their homes, experts estimate it would add only about 0.8% more homes to the market, roughly the same number of houses builders add every nine months. The bigger issue facing the U.S. housing market is supply: the National Association of Realtors estimates the country is short about 1.2 million homes needed to meet demand.

For apartment owners and small “mom-and-pop” landlords, the bill would likely have little direct impact. Apartment buildings are not included in the restrictions, meaning investors could still buy and operate multifamily properties freely. Local investors who own a few rental homes would also not be affected because the rule only applies to very large portfolios of 350 houses or more. In fact, smaller investors could face slightly less competition when purchasing homes if large national investment firms are restricted from buying more properties.

In San Diego, the impact would likely be limited. Most single-family homes in the region are owned by individuals or small landlords rather than large institutional investors. Because the bill targets only very large corporate portfolios, most local property owners would not be affected. San Diego’s housing challenges are mainly caused by limited housing supply and strong demand, which continue to drive high home prices and rents. While the bill may reduce competition from a few large corporate buyers, it is unlikely to significantly change housing prices or rental trends in the San Diego market.