Schiff Bill Would Block Big Investors From Buying in Disaster Zones, but Eaton Fire Properties Are Not Covered

U.S. Sen. Adam Schiff introduced federal legislation this week that would temporarily bar large institutional investors from making offers to purchase property in disaster areas, a response to corporate land buying that has reshaped Altadena in the 14 months since the Eaton Fire. But the bill would not apply to properies impacted by the Altadena or Pacific Palisades. wildfires of 2025.

The measure, S.3961, would prohibit investors who own 75 or more single-family homes from making offers on any property in a federally declared major-disaster area for six months after the declaration, according to the bill text filed March 2. Schiff is pushing to include the bill in a bipartisan housing package under consideration by Congress, the Los Angeles Times reported Tuesday.

Because of its timeline, the law apparently would apply only to future disasters — not to the January 2025 Los Angeles County firestorms that destroyed thousands of homes in Altadena.

The distinction frustrates local advocates who have tracked corporate purchases in the community since the fire.

“Six months is not enough of a breather for people to deal with all the issues and decisions they have to make,” said Melissa Michelson, co-founder and lead organizer of the Altadena Not for Sale movement, in the Times.

About 60 percent of all property purchases in Altadena’s fire-damaged area were made by investors as of August 2025, according to Altadena Not for Sale. A separate Redfin analysis of the third quarter of 2025 found that about 44 percent of vacant lots sold in Altadena went to investor buyers, up from essentially no such lot sales in the same months of 2024, LAist reported.

In January, Altadena Not for Sale found that eight companies had bought 76 properties in the community — about a quarter of all Altadena properties sold in the first year since the fire.

Schiff’s press release cited a higher figure: of 289 properties sold in Altadena after the Eaton Fire, 168 — nearly two-thirds — were bought by limited liability investors and private equity firms, according to the senator’s office.

Schiff, who formerly represented Altadena and Pasadena in the U.S. House before winning election to the Senate in 2024, framed the legislation as a response to nationwide patterns of post-disaster corporate buying.

“Across the country, Americans have witnessed giant corporate landlords and Wall Street firms buying up droves of lots in the wake of natural disasters with artificially low offers that take advantage of vulnerable families,” Schiff said in a statement, according to his press release. “I’m proud to introduce legislation to help restrict giant corporate investors from purchasing properties in impacted areas. It’s time we crack down on this predatory practice, and I urge my colleagues to include this legislation in the bipartisan housing package currently being considered by Congress.”

The bill would amend the Robert T. Stafford Disaster Relief and Emergency Assistance Act by adding a new Section 431, titled “Prohibition on Solicitation by Institutional Investors.” The draft text defines “institutional investor” as any individual or entity that owns, directly or indirectly, at least 75 single-family homes in a taxable year. It would bar such investors from making purchase offers through the mail, interstate wire or any other type of solicitation or method of contact during the six-month window.

The bill has been referred to the Senate Committee on Homeland Security and Governmental Affairs, according to Congress.gov. It has no cosponsors as of this week.

Lisa Odigie, chair of the emergency housing and stabilization committee for the Eaton Fire Collaborative, said investor activity is displacing fire survivors who cannot afford to rebuild.

“Families who can’t afford to rebuild are being replaced by investors who can,” Odigie said in the Times. “That is not recovery. That is displacement dressed up as a real estate transaction.”

California has separately enacted protections for fire-affected communities. Gov. Gavin Newsom issued executive orders in January 2025 barring unsolicited below-market offers in specified fire-affected ZIP codes, including Altadena’s 91001. The state Legislature later passed AB 851, which codified and extended those protections through January 1, 2027, and authorized civil penalties of up to $25,000 per violation. Willful violations are a misdemeanor punishable by up to six months in jail or a $1,000 fine.

Schiff’s federal proposal targets a different set of actors — specifically large institutional investors — and would apply nationally to any federally declared major-disaster area, not just California.

At the federal level, the bill arrives amid a broader bipartisan push to restrict corporate ownership of single-family homes. President Trump signed an executive order in January 2026 directing federal agencies to avoid supporting most sales of single-family homes to large institutional investors. Sens. Josh Hawley, a Republican from Missouri, and Jeff Merkley, a Democrat from Oregon, have introduced separate legislation to ban large investment firms from buying single-family homes nationwide, CBS News reported.

Michelson said she was disappointed the bill would not help current Altadena fire survivors.

“Why now?” she asked. “Why did Adam Schiff wait so long for this?”

Both the Altadena Not for Sale movement and the Eaton Fire Collaborative have called for stronger protections, including community land trusts, land banking initiatives and nonprofit acquisition strategies to keep rebuilt homes in local hands.

The bill has no projected cost estimate or Congressional Budget Office score. No date has been set for committee action.