Sen. Nancy Skinner, D-Berkeley, introduced today Senate Bill 1079 to reduce the number of vacant homes in California and give tenants the right of first refusal to buy foreclosed properties. SB 1079 would also allow cities and counties to fine corporations that own multiple single-family homes for keeping housing vacant for more than 90 days and give local governments first rights on such vacant properties to use them for affordable housing.
The issue of corporations purchasing homes and leaving them vacant was raised by Moms 4 Housing when the group occupied a corporately owned vacant home in West Oakland.
“Moms 4 Housing shined a light on the fact that while over a 150,000 Californians are now homeless, right now in our own neighborhoods, there are more than 1 million vacant homes,” Sen. Skinner said. “Many of these affordable homes were snatched up during a foreclosure by corporations who then kept the houses vacant or flipped them for hefty profits.”
According to the 2017 Census, the most recent complete data available, there were an estimated 1.1 million vacant homes in California. In the years after the foreclosure crisis, many corporations purchased foreclosed homes, particularly in economically distressed areas, and either kept the properties vacant or flipped them for much higher prices. Some corporations specifically target areas that restrict the creation of new housing, because as the housing crisis continues, homes in those communities deliver bigger profits for the companies.
Under SB 1079, if a home goes into foreclosure, tenants of that property would have the exclusive first opportunity to buy the house at a reasonable price during a 90-day period. If the tenants choose not to purchase the home, community land trusts and nonprofit affordable housing organizations, along with cities and counties, would have a chance to purchase the property before it goes on the open market.
Currently, cities and counties have the right of first refusal to buy a foreclosed home in most jurisdictions, but the local agencies often decide not to make the purchase for financial reasons. The property then goes up for auction where large corporations can buy them.
SB 1079 would also incentivize corporations to rent out or sell vacant homes by allowing cities and counties to pay the lowest appraised value when using their eminent domain powers to purchase corporately owned homes that are vacant for at least 90 days. Local agencies could then rent out the properties as affordable housing or sell them to community land trusts or affordable housing groups to be used as affordable housing.
SB 1079 would also give cities the greenlight to levy civil penalties against corporations that keep homes vacant for more than 90 days. Local agencies would be required to use the funds for homeless diversion, rental assistance, and other affordable housing purposes.
“There is no excuse for a vacant home when so many of our neighbors are homeless,” Skinner added. “And helping tenants buy foreclosed homes rather than be evicted will keep people housed.”
