When adopted on January 1, 2021 the stated purpose of Senate Bill 1079 was to address the “problem” of large investors buying and converting foreclosed properties to rentals, to the detriment of maintaining owner occupancy in residential neighborhoods. SB1079 went into effect and sought to increase the supply of affordable housing by giving tenants, advocates and nonprofits up to 45 days after a foreclosure auction to outbid the winning bidder, even by just $1. The idea was to keep professional and institutional investors from flipping properties and driving up the cost of housing. SB 1079 was supposed to be a temporary fix that would expire after five years. Since adoption, allegations of abuse and loopholes in California’s foreclosure auction laws have emerged. More particularly, certain investors and nonprofits exploit the system to acquire and flip distressed properties, often bypassing affordability requirements meant to address California housing problem. The Blight - Loopholes a...
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