By Arturo Castañares
Editor-at-Large
San Diego County Board of Supervisors this week asked staff to examine the level of corporate ownership of single-family rental homes in the region and look for ways to protect renters through legislation or even lawsuits.
The proposal by County Supervisor Terra Lawson-Remer directs the County’s Chief Administrative Officer Ebony Shelton to report back to the Board on the percentage of ownership of single-family homes held by corporate landlords and to “explore options for initiating, pursuing, and/or joining litigation against corporate landlords and property firms to address allegations of anti-competitive, unfair, anti-tenant and anti-small home buyer allegations and activities, including but not limited to: tenant harassment, evictions, price gouging, price-fixing, collusion, etc.”
The Board also asked the CAO to “explore and report back within 180 days with options for County policies and ordinances that would bar anti-competitive behavior, price fixing and unlawful rent increases, and safeguard housing options for first-time homebuyers and working families. Including, but not limited to, exploring options barring the County from entering contracts with entities that use anti-competitive algorithmic devices to set rents or ensure occupancy levels in rental properties.”
The staff report highlights that “housing in our neighborhoods should be homes for people, not profit centers for Wall Street hedge funds” and that San Diego is “ground zero for a growing trend of giant financial corporations buying up housing and driving up rent and home process.”
Lawson-Remer’s proposal highlights corporate hedge funds that have bought tens of thousands of units throughout the country, including Blackstone, which purchased nearly 5,800 units in San Diego County in one transaction in 2011.
But the County report does not clarify that all of the units purchased by Blackstone in that one transition were among 66 multi-unit apartment complexes previously owned by the estate of Conrad Prebys, a San Diego billionaire who died in 2016 and held apartment in San Ysidro, Imperial Beach, Chula Vista, National City, Lemon Grove, Lakeside, Spring Valley, Pacific Beach, Ocean Beach, El Cajon, Escondido, Ramona, and Santee.
Lawson-Remer’s proposal did not impact the units purchased by Blackstone.
Supervisor Jim Desmond offered an amendment that expanded the proposal to include townhouses and condominiums, and a "threshold number" of 25 units or fewer that would be considered a small business.
Housing advocates were critical of the sale of the units from the charity foundation to a corporate landlord because Prebys was known for having maintained low rents among his properties.
The Prebys Foundation was funded by the $1.15 billion proceeds of the sale of the real estate assets.
During his lifetime, Prebys donated and committed millions to the Boys and Girls Club, San Diego Zoo, USD, SDSU, Scripps Health, and the Salk Institute.
The proposal was passed this week by a 3-1 vote with Democratic Supervisors Lawson-Remer and Monica Montgomery Steppe, and Republican Supervisor Jim Desmond voting in favor, and Republican Supervisor Joel Anderson voting against it. Board Chairwoman Nora Vargas was absent from the meeting.
County CAO Ebony Shelton has 90 days to report back to the Board with the research on property ownership and legal options, and 180 days to report back with policy and legislative options the Board could pursue.
Lawson-Remer, who was first elected in 2020, is facing a re-election challenge from former San Diego Mayor Kevin Faulconer. The two will face off in the November 5th election.
Correction: a previous version of this article incorrectly stated that Prebys had funded the Foundation before the sale of the real estate assets. The story has been updated.
