CA Legislature OK’s SB 1079, Homes for Homeowners, Not Corporations
Senate Bill 1079, which modifies the process for how foreclosed homes are sold at auction so that big corporations don’t have an advantage, has won approval from the California Legislature. The bill, Homes for Homeowners, Not Corporations, by Sen. Nancy Skinner, D-Berkeley, would give tenants, families, local governments, and housing nonprofits an opportunity to buy foreclosed homes before large corporate buyers can snatch them up. If signed into law, SB 1079 would also provide local governments with the authority to fine corporations or other owners that leave homes vacant or blighted, rather than refurbishing, renting, or selling them.
“We can’t afford a repeat of the foreclosure crisis when corporations gobbled up tens of thousands of homes, and significantly reduced home ownership among California residents,” Sen. Skinner said. “SB 1079 will help prevent another housing takeover that transferred massive amounts of wealth from California families to big corporations like Blackstone.”
SB 1079 won approval in the state Senate on a 30-9 vote after getting the greenlight from the state Assembly on a vote of 49-17. It’s now headed to the governor for consideration.
During the Great Recession, an estimated 5 million families lost their homes nationwide. Wall Street firms, sensing an opportunity to make huge profits, entered the single-family home rental market, buying up large numbers of foreclosed homes in so-called “bundled” auction sales. Today, Wall Street owns an estimated $60 billion worth of single-family rental housing in the United States.
Many who lost their homes have never fully recovered, and home ownership, which had long been the primary path for most Americans to build wealth and retirement security, has nosedived. In California, between 2006 and 2012, the number of owner-occupied homes plummeted by more than 320,000, while the number of renter-occupied single-family homes skyrocketed by more than 720,000.
The last foreclosure crisis also resulted in numerous residential properties being left vacant and unmaintained. The takeover of a vacant, corporately owned home in West Oakland by Moms 4 Housing, a group of homeless mothers, brought national attention to this problem.
Under SB 1079, during a foreclosure auction, sellers would be barred from bundling homes together and selling them to a single buyer. Foreclosed homes would have to be sold individually to ensure that people who actually want to live in a home have a fair chance at buying it. Then, after initial bids at a foreclosure auction are received, tenants, families, local governments, affordable housing nonprofits, and community land trusts would have a 45-day window to exceed the highest auction bid in order to buy the property. These provisions of SB 1079 would apply to all homes with one to four units and would sunset in five years.
Also, SB 1079 would incentivize corporations to rent or sell homes rather than leaving them vacant and blighted, because it would allow municipalities to levy fines of up to $2,000 a day on blighted properties.
Sen. Nancy Skinner represents the 9th Senate District and is the Senate majority whip.