LA to assess 'monopolization' of housing stock

The L.A. City Council voted Wednesday to study how large property buyers may be preventing Angelenos from becoming homeowners.

The vote follows a housing department study released in October that found large landlords, like property management companies and investment firms, owned a growing share of L.A. properties.

Rapid property buys by these organizations may lead to residents being displaced and limit opportunities for prospective homebuyers, the report states.

The new study approved this week will attempt to weigh how much added risk large property owners’ businesses are placing on tenants, homeowners and small landlords.

President Donald Trump and Gov. Gavin Newsom have proposed regulating housing purchases by institutional investors — a group of the very largest corporate landlords.

“It’s shameful that we allow private equity firms in Manhattan to become some of the biggest landlords in many of our cities,” Newsom said at his State of the State address in January.

Trump issued an executive order in January to limit institutional investors’ ability to buy single-family homes.

L.A. City Councilmember Monica Rodriguez pushed for both housing department studies, saying she hopes the City Council will use the research to make policy that helps first-time homebuyers and mom-and-pop landlords to build generational wealth.

“Mass consolidation and monopolization” of L.A. housing stock puts the first attempt at home ownership out of reach for many young adults and families, she said at Wednesday’s meeting.

More on the October report

The Los Angeles Housing Department found that corporations and other large organizations owned a growing share of L.A.’s housing stock from 2018 to 2023.

The biggest change in ownership was the large organizations’ share of two- to four-unit buildings in the city, which increased by 29% over the six years studied. The report raised concerns that these organizations are targeting relatively small buildings that are often associated with small landlords.

When it comes to single family-homes, more than 1-in- properties was found to be sold to an organization and not an individual buyer over the six years studied.

The department also noted that there is some evidence behind concerns that “large corporate landlords may be associated with more evictions, more habitability violations, and overall higher levels of housing insecurity for renters.”

The report listed three companies that each agreed to pay out millions of dollars in recent years after facing allegations of unlawful practices as landlords: K3 Holdings, Wedgewood Homes and Invitation Homes.

According to the housing department report, K3 Holdings ranks as having the fastest-growing inventory of properties over the six-year period. The company agreed to pay $2.2 million to settle a lawsuit in 2023 that alleged they illegally targeted long-term Latino residents for displacement from properties in Koreatown and Highland Park.

Wedgewood Homes takes the top spot in flipped L.A. properties, the study found. That company agreed to pay $3.5 million in 2021 after allegations that the company unlawfully evicted and harassed tenants in order to quickly resell homes.

The housing department found Wedgewood Homes sold nearly 400 homes in the six-year period of its study. The company resold 81% of those homes in less than a year at an average price increase of 33%, the study found.

Invitation Homes is one of the largest owners of single-family rentals in the U.S., the report said, and the company agreed to pay $3.7 million to settle a lawsuit over allegations of illegal rent increases for around 1,900 California homes.

K3 Holdings and Wedgewood Homes have previously denied any allegations of wrongdoing, and court documents show Invitation Homes Inc. did not admit or deny liability in the lawsuit against the company.

LAist reached out to all three companies about the report’s findings. They did not immediately provide additional comments.

Other council members weigh in

At the Wednesday meeting, council President Marqueece Harris-Dawson said he appreciated the effort going toward solving this issue.

“When I first took office [in 2015], eight out of every 10 residential units that went up for sale were bought by a corporation,” he said about the area in South L.A. where District 8, 9 and 15 meet.

Harris-Dawson said because the corporations were buying up properties, working people were squeezed out of the housing market in the once-affordable area.

Councilmember Eunisses Hernandez also criticized corporations and large investors.

“Homes that should be places where people put down roots, raise their kids and build generational wealth are increasingly treated like commodities in an investment portfolio,” Hernandez said.

Councilmember John Lee welcomed the study, but said he blames the consolidation on the council’s own policies that make it harder to be a property owner.

“I don’t even know if we need a study,” he said. “I think we understand why there’s more corporatization of ownership in our city. It’s the over restrictive policies of this council.”