Assembly Bill 1240 Targets Single-Family Houses While Corporate Investors Continue Clearing Out Rent-Stabilized Apartments
Carmen, who has lived in her Mar Vista apartment in West Side LA for over 30 years, was served an eviction notice—and there’s nothing she can do about it.
“It can’t be right that we’ve been here so many years and this new landlord, without meeting us, without giving us a reason … is evicting us,” she told Knock LA.
Under California State Law, corporate landlords use the Ellis Act to remove units from the rental market, often leading to redevelopment or re-entry at market rates. This is the real threat of corporate landlords.
While many cities are taking steps to block corporate landlords from buying single-family homes, there isn’t much being done about apartments.
How California’s Ellis Act Allows Investors to Clear Out Rent-Stabilized Apartments
This is the gap between how policymakers talk about the housing crisis and how tenants actually experience it.
While renters like Carmen are being displaced through legal mechanisms like the Ellis Act, state leaders are increasingly sounding the alarm about corporate investors driving up housing costs. The focus, however, has primarily been on homeownership—not on the rental units where millions of Californians already live.
During his January 8, 2026, State-of-the-State address, California Governor Gavin Newsom warned that large investors are distorting the housing market and pushing both ownership and rental costs out of reach for everyday people.
“These investors are crushing the dream of homeownership and forcing rents too damn high for everybody else,” the Governor said.
Momentum has since grown around Assembly Bill 1240, first introduced last June and now advancing through the Senate. The bill seeks to limit the number of single-family homes large corporate investors can acquire for rental purposes.
AB 1240 targets corporations that already own more than 1,000 single-family residential properties, prohibiting them from purchasing additional homes to lease. Violations carry a $100,000 fine per property and require divestment within one year.
Why Limiting Corporate Ownership to 1,000 Homes Still Leaves Most Renters Unprotected
On its surface, AB 1240 sounds like a meaningful intervention. But allowing corporations to hold up to 1,000 single-family homes before restrictions apply leaves a massive footprint untouched—and says nothing about the apartment buildings where most renters live.
The concern over corporate control of housing is not unique to California.
In Las Vegas, Senator Dina Neal expresses worry over the growing “build-to-rent” trend. Senator Neal told NPR that a corporate investor near her district has built an entire neighborhood, specifically to rent.
Mayor Scott Fadness of Fishers, Indiana, a suburb of Indianapolis, also shares concerns. Fadness proposes capping rentals at 10% per neighborhood to protect local homeownership.
“We have neighborhoods today that are now creeping up to 35, 38% of the homes have been purchased for investment purposes,” he said.
These examples show how quickly investor ownership can reshape entire communities—long before any legislative threshold, such as 1,000 properties, is reached.
Assembly Bill 1240 Targets Homeownership — Not the Apartments Where Californians Actually Live
If Assembly Bill 1240 is a response to California’s housing crisis, or more widely, a national housing crisis, this bill falls short of addressing these concerns.
Housing advocates and tenant groups argue that corporate landlords have played an increasingly significant role in California’s housing crisis, particularly in cities like San Diego.
Since 2021, the largest private equity firm, Blackstone, spent over a billion dollars to acquire 5,800 affordable housing units in San Diego alone. Acquisitions like these, combined with rent hikes and rampant eviction sprees, allow corporate landlords like Blackstone to escalate the housing crisis in Southern California and elsewhere.
While single-family homes are a concern, apartment buildings are an even larger concern, and they are entirely ignored in Assembly Bill 1240.
How Corporate Landlords Raise Rents, Force Evictions, and Drive People Into Homelessness
The worst thing about corporate landlords is how they disrupt the rental prices of entire communities, often displacing many people, while also directly causing homelessness within those communities.
The business model of corporate landlords is to increase the value of their properties. Here is how it’s done: When corporate landlords buy up apartments in up-and-coming neighborhoods—those which are already going through a process of gentrification, they do so with the intention of maximizing profits. This sometimes comes with racist eviction patterns, since these neighborhoods are typically in low-income communities of color.
Through high rent hikes, rapid evictions, and neglecting repairs, corporate landlords have the power to turn entire communities of affordable housing into those replaced by much more expensive housing.
What happens to the former tenants? They may try to keep up with the severe rent hikes until they no longer can. But what’s more likely is they’ll be evicted.
Corporate landlords may also use other tactics, such as neglecting repairs, to force those tenants out. At worst, these former tenants become homeless, further increasing homelessness in that community.
Why Popular Anti-Investor Policies Still Miss the People Most at Risk
Many political and government figures have voiced similar sentiments—even President Donald Trump has signed an executive order to limit Wall Street investors in single-family housing.
While these efforts will help homebuyers, it’s important to carefully review the details of any proposed orders, bills, or policies. As for Assembly Bill 1240, it may appear to be a step in the right direction, but it is very small. Most importantly, these efforts completely miss the mark when it comes to those who suffer the most from this housing crisis—those who are trying to stay afloat between rapidly rising rents and wages that aren’t keeping up.