June 24, 2026

Todd Jones Explains Why Interest Rates—Not Corporate Investors—Are the Real Inventory Problem

Watch the Interview

Or view the full segment on our dedicated CBS coverage page

The Interview: What Todd Jones Told CBS Los Angeles

Recently, I was featured on CBS Los Angeles discussing the 21st Century Road to Housing Act and its real impact on Los Angeles' housing market. The segment covered what's actually causing our inventory crisis—and spoiler alert: it's not what most people think.

For 21+ years, I've worked in LA real estate and watched inventory dry up despite billions in investment and multiple housing bills. So when CBS asked me to explain what's really happening, I didn't sugarcoat it.

The Real Problem: Interest Rate Lock-In (Not Corporate Investors)

The Conventional Wisdom Is Wrong

You've probably heard that large institutional investors are buying up single-family homes and creating scarcity. That's part of the narrative behind the 21st Century Road Act—and yes, it's a real issue. But here's what the data actually shows:

• Institutional investors control 2-5% of single-family homes nationally

• Even in hot CA markets, they're a minor player compared to owner-occupants

• The bill's investor ban is well-intentioned—but it's not the main reason homes aren't selling

What's REALLY Freezing Inventory: The Mortgage Rate Paradox

The actual culprit is much simpler and much more powerful: homeowners locked into 3%–3.5% mortgages won't move, even for lateral moves.

Think about it:

• You bought your LA home in 2021–2022 at 3% interest

• Today's rate is 7%+

• Even if you want to downsize or relocate within LA, a new mortgage = double your monthly payment on the same house

• Result: You stay put. Your home stays off the market.

This psychological and financial lock-in is orders of magnitude more powerful than investor purchases. It's also invisible in most housing policy discussions—but every LA realtor sees it daily.

What the Housing Bill Actually Does (And What It Misses)

The Bill's Provisions

The 21st Century Road to Housing Act includes:

• Streamlined permitting for residential development

• Ban on large institutional investors (350+ home portfolios)

• Accessory dwelling unit legalization across California

• Federal grants tied to communities that build housing

These are all positive steps. More supply is good. Faster approvals help. But here's the gap:

What the Bill Doesn't Address

1. Interest rate lock-in — No policy levers to unlock homeowners

2. Capital gains tax disincentive — The $250K/$500K exemption hasn't changed since 1997

3. Construction costs — Building 1 new home costs more than buying 3 existing ones

4. Builder financing constraints — Project financing is tight despite population demand

The Capital Gains Tax Solution Nobody's Talking About

Here's the most actionable insight: raise the capital gains exemption.

Current law (since 1997):

• Single filers: $250,000 exemption on primary residence sale

• Married filers: $500,000 exemption

Real-world impact:

A couple sells their LA home for $1.2M. Original purchase price: $600K.

• Capital gain: $600K

• Taxable gain: $100K (after current exemption)

• CA state tax on that $100K: ~13.3% = $13,300 in state taxes

But here's the psychology: sellers compare the net proceeds against the hassle of selling in today's market. Update the exemption to $750K/$1.5M, and you shift the equation. Sellers say: "I can afford to move now."

More sellers = More inventory = Lower prices = Easier for buyers

This single policy change would unlock more inventory than a corporate investor ban ever could.

What Buyers and Sellers Should Do Right Now

If You're Selling

1. Don't wait for the bill to pass — Current inventory shortage = your advantage

2. Price strategically — With rate lock-in, your home is scarcer than it looks

3. Update your home — Fewer sellers mean choosier buyers; good presentation matters more

4. Consult on timing — Capital gains tax changes are possible; get advice before listing

If You're Buying

1. Lock in today's rates — Don't assume rates will drop (they might, but the cost of waiting is high)

2. Expect modest price relief in 2-3 years — Once the bill's supply effects appear

3. Understand rate lock-in psychology — In a low-rate market, sellers have negotiating power; that's changing

4. Act on inventory when it appears — Good homes still move fast in LA

If You're Investing

1. Single-family rentals are safer than buy-to-flip — Bill doesn't ban landlords, only mega-portfolios

2. ADU conversions become valuable — Legalization + rent growth = strong long-term play

3. Watch capital gains tax changes — They'll affect exit timing

The Bottom Line

The 21st Century Road to Housing Act is a step forward. Faster permitting and more housing supply are always good. But LA's real problem isn't corporate investors—it's rate lock-in and outdated tax policy.

Until we address those, even a perfect housing bill will take 3-5 years to move the needle. The faster solution? Update capital gains tax exemptions now. Unlock sellers. Unlock supply. Unlock affordability.

What's your situation? Thinking about buying or selling in LA? Let's talk strategy.

Todd Jones is a Los Angeles-based real estate agent with 21+ years of experience and over $330 million in closed transactions. He specializes in Los Angeles residential real estate and has been featured on CBS Los Angeles, discussing housing policy and market trends. Todd works with buyers, sellers, and investors across Los Angeles County and is known for data-driven market analysis and candid expert commentary. Call (310) 882-5565 or visit toddjonesrealtor.com.

Featured Image: CBS Los Angeles Interview | Todd Jones Real Estate Expert

DRE #01481426 | Equal Housing Opportunity