September 28, 2020
Press Contact: Fermin Vasquez
Governor Newsom Signs Sweeping Housing Foreclosure Bill Prevent Private Equity Firms From Gobbling Up Foreclosed Properties
Sacramento, CA– In a sweeping move, Governor Newsom has signed State Senator Nancy Skinner’s SB 1079 to prevent corporate private equity firms from gobbling up foreclosed homes which will take on heightened importance in the event of a massive wave of home loan defaults. The bill contains a trio of provisions aimed to mitigate against blight by raising penalties for unmaintained vacant properties, prohibit the bulk sale of foreclosed properties which favored corporations over families, and prevent the transfer of residential property ownership from owner-occupants to corporate landlords. Nearly 70 community based nonprofit organizations supported the measure.
“This is a win for the little guy, and a defeat for Wall Street”, said Paulina Gonzalez-Brito, Executive Director of the California Reinvestment Coalition. “We applaud the leadership of Senator Nancy Skinner, the Legislature, and Governor Newsom for taking a stand against Wall Street and siding with working families and mission driven nonprofits. Corporate landlords are already salivating at the thought of gobbling up thousands of residential properties at foreclosure sales, but this bill would allow tenants, prospective homeowner occupants and local non-profits the ability to compete for the purchase of properties to help those at risk of ending up on the street. This is a clear sign that California has learned from the mistakes of the last financial crisis in 2008.”
This news comes on the heels of a surge in eviction filings by corporate landlords and an imminent economic fallout from the COVID 19 pandemic. Despite the CDC’s moratorium announcement on evictions, equity firms only see dollar signs and are doing everything in their power to profit from the suffering and pain of millions who could lose their homes. In fact, the Wall Street Journal reported that investors are “preparing for what they believe could be a once-in-a generation opportunity to buy distressed real-estate assets at bargain prices.”
The impact of SB 1079 is particularly important given the history in California of the last foreclosure crisis, where landlords squeezed hundreds of thousands of people out of their homes. According to the Public Policy Institute of California (PPIC), between 2006 and 2012, the number of owner-occupied housing units in California declined by more than 320,000, while the number of renter-occupied housing units increased by more than 720,000.
Today’s signing of SB 1079 is a significant step towards stabilizing neighborhoods amidst the continuing housing crisis, particularly in communities of color which are often the most vulnerable to disinvestment, foreclosure, wealth stripping, and displacement.
“The signing of SB 1079 means that our tenant clients will have the opportunity to remain in their communities and create stability for their families. Now more than ever, stability in housing impacts physical, emotional and mental health, and we are grateful that our clients and nonprofit partners now have the opportunity to positively impact the health of their communities.” said Leigh Ferrin of Public Law Center in Orange County.